While still less than 5% of the total Class 8 market, the number of natural-gas-powered trucks sold this year is expected to increase about 20% over last year. Despite continuing advances in technology, a number of factors are keeping the market from growing as fast as some predictions.
According to Power Systems Research, 2014 sales are expected to be in the range of 10,500 units, up from 2013’s 8,730. However, that’s fewer than expected. Some analysts were predicting sales of 16,000 trucks. A recent Wall Street Journal report blames this on higher capital costs and poorer fuel economy compared with diesel trucks, along with a lack of convenient fueling points.
We could probably add fuel range anxiety and fuel tank weight to the list of concerns, though the former is becoming less of a concern while the latter could be dealt with through a regulatory change.
The Natural Gas Long Haul Truck Competitiveness Act, introduced in late July, would let the Department of Transportation permit natural gas trucks to exceed the 80,000-pound Interstate limit by the additional weight of their tank and fueling system.
Bob Carrick, vocational sales manager for natural gas at Daimler Trucks North America, says the weight disadvantage varies with the tank system installed, but the bill calls for a 2,000-pound exemption.
“We’ve been working on that with Natural Gas Vehicles of America for about four years now, but we think it’s going to pass this year,” Carrick told HDT. “We took a 150-gallon diesel equivalent [compressed natural gas] system and a 140-gallon [liquefied natural gas] system and then compared them to a 150-gallon diesel system, and the way it all shakes out is about 1,800 to 2,000 pounds more to carry the same amount of CNG diesel gallon equivalent as it is for the diesel.”
Carrick says the 500-pound weight exemption the industry got for auxiliary power units set somewhat of a precedent. He’s optimistic the tank weight exemption will pass, too. If it doesn’t pass in its current form, it could be wrapped into the next highway bill.
Even with the weight concerns, the roster of big, high-profile fleets that have already made substantial investments in natural gas trucks reads like a who’s-who of trucking — UPS, FedEx, Frito-Lay, Waste Management, Republic Services and many others, including Ryder Systems.
Ryder’s CNG fleet has clocked close to 27 million miles since launching a natural gas program just four years ago. Scott Perry, Ryder’s vice president of supply management and fleet management solutions, says the company plans to have 1,000 CNG and LNG trucks in operation by the end of 2014 serving lease and rental customers. Ryder also operates natural-gas-compliant maintenance facilities in eight states.
Perry says integrating the natural gas trucks into the fleet wasn’t difficult, and they have proven to have more upsides than down. He says the trucks require little extra maintenance beyond a 90-day inspection interval on the tanks, and they eliminate the cost and complexity of the diesel exhaust aftertreatment systems.
“There were some training requirements for our technicians, and we had to make some modifications to our facility infrastructure, but there wasn’t much over and above that,” Perry says. “We chose to upgrade certain facilities completely to meet the fire and electrical codes for natural gas — they are different for liquid and compressed gas systems — rather than just segregate one or two bays. That would have limited future expansion.”
Customer interest has been high. Perry says Ryder has converted many traditional long-term lease customers to natural gas where the market makes sense, but he says there’s lot of interest in the rental side as well. For a fleet with no natural gas expertise, Perry says renting is a good way to test the waters.
“Those fleets can leverage our network and expertise so that the transition is practically seamless to them,” he says. “It’s still early days for natural gas and it’s not right for every fleet, but a short-term lease or rental gives curious fleets a chance to see how it fits their operation.”
Relief for range anxiety
Development on the fuel tank front has been fast and furious over the past year. Just last summer, we reported that Freightliner was boasting fuel tank range of up to 700 miles with a back-of-cab and saddle tank system capacity of 115 diesel-gallon equivalents. A year later, Carrick says he can build a system with a range of 1,200 miles.
“I can give you dual 45-gallon CNG tanks on the rail and 155 back of cab,” he says. “With capacity of 245 gallons of fuel, you’ve got a range of 1,200 miles.”
There are weight concerns with such capacity. Such an arrangement would weigh close to 5,700 pounds full of fuel, according to data from DTNA’s tank supplier, Agility Fuel Systems. But in applications that are more sensitive to range than weight, 1,200 miles is about what 200 gallons of diesel will comfortably deliver.
Agility offers back-of-cab tank capacity with up to 155 DGE gallons as well as saddle tanks with up to 60 gallons.
Meanwhile, competitor Quantum Technologies offers lighter tanks, but with less capacity. For example, Quantum offers a 123-gallon back-of-cab module weighing 2,363 pounds full of fuel, along with saddle tanks of up to 46.5 DGE weighing 890 pounds. With about 4,100 pounds of tanks and fuel, you’d run about 1,000 miles on the useable fuel.
On the LNG side, for a comparable system of 65 DGE, the tank is about 200 pounds lighter — 885 pounds full of LNG versus a 60-DGE CNG tank at 1,100 pounds full of fuel.
“In the same packaging and same geography on a truck, LNG will get you further,” Carrick says. “But even with the two largest LNG saddle tanks available, you’re limited to 600-650 miles range. We know that for a fact. We have several customers using such an arrangement.”
But that could change. Andy Douglas, national sales manager at Kenworth, says there is lots of competition and innovation under way in the tank side of the business.
“There’s a real market opportunity here, and competitors are stepping in and starting to lower costs and improve ROI,” he says. “It took a little time until we saw a critical mass in the size of the market, but we’re just about there and the market is starting to perform as it should.”
Another way some truck owners are dealing with range anxiety is by opting for dual-fuel systems, through aftermarket conversions or glider kits. These displace some of the diesel fuel with natural gas, but allow the truck to run on diesel only if the natural gas tanks are depleted.
CNG: Beyond local?
In local markets where compressed natural gas is available, fuel availability is no longer a major concern. Major gas utilities often partner with distributors such as Clean Energy and Trillium to provide fueling outlets in their markets. On a scale required for trucking, it’s common for the distributor to sign an anchor contract with a major truck fleet customer to establish volumes. Smaller customers enter the market after a supply beachhead has been established.
Werner Enterprises recently inked a 1.1 million gallon deal with the Metropolitan Utilities District in Omaha and Trillium CNG, thus becoming the anchor fleet for that location — the first of its kind in Omaha. MUD owns the property and supplies the fuel, Trillium operates the station and Werner helps draw in the smaller fleet customers.
In other cases, with large volume accounts, pipelines deliver fuel right to the customers’ facility. Saddle Creek Logistics Services in Lakeland, Fla., is one example. Clean Energy recently announced it was expanding capacity at the company’s Lakeland terminal, and adding filling capacity to meet Saddle Creek’s growing demand. Mike DelBovo, transportation president of Saddle Creek, says he plans have about 200 CNG trucks running from Lakeland by October.
Unfortunately, fueling facilities are few and far between once you get out into the wild.
“We hear of new natural gas installations almost daily, but when you dig deeper, you may find they are not truck-friendly installations,” says Frank Bio, director of sales development - specialty vehicles and alternative fuels for Volvo Trucks in North America. “We define truck-friendly as able to consistently fill at a 15- to 20-gallon-per-minute rate with recovery rates fast enough to fill a row of waiting trucks.”
Trillium CNG has deployed a proprietary fast-fill system it calls a hydraulic intensifier compressor to squeeze every possible cubic inch of CNG into customers’ tanks at a rate similar to a liquid diesel pump.
It’s important to have reserve capacity at these facilities as well, especially at high-volume locations.
“At most of the new stations retailers are building for trucks, Love’s, for example, you’ll get CNG at 14 gallons a minute,” says Carrick. “You can’t get diesel any faster than that. So the new stations, the new infrastructure that’s going in is very, very quick. Just as fast as LNG or diesel and you get a complete fill.”
Traditional slow-fill systems, where you hook up the truck and let the fuel trickle in overnight, are fine for refuse trucks that return to the yard at the end of a shift, but they are completely incompatible with trucks requiring a fast fueling experience.
Some insiders see the growth of highway-accessible fast-fill sites as the tipping point that finally gets linehaul operators into the CNG game.
And LNG, too
LNG is less commonly used than CNG presently, but that doesn’t imply it is not as good as CNG. It has its place in certain applications.
LNG does suffer a cost penalty compared to CNG. There are additional processes involved to liquefy and transport the fuel. It’s a cryogenic liquid delivered by truck rather than pipeline. As well, Merritt Norton, CEO of Blu, an LNG distributor building inroads to trucking, say LNG is taxed at a higher rate than CNG.
“LNG, like diesel, is taxed by liquid volume when it should be taxed by energy content,” he says. “A gallon of diesel contains about 1.7 times the energy content, or BTUs, as LNG, yet they tax the two fuels at the same per gallon rate. The LNG consumer is paying more tax than the diesel user for the amount of energy they buy.”
Norton says lawmakers are aware of the issue and have promised to resolve it, but they haven’t a timetable. The cost spread between CNG and LNG will narrow somewhat, but it won’t equalize the cost. You still have the production and transportation costs.
That said, the cost/benefit of LNG is determined by the on-board storage capacity (range) and the availability of fueling infrastructure.
There are other companies working to improve the LNG fueling infrastructure. Clean Energy Fuels is working with Pilot Flying J to develop “America’s Natural Gas Highway.” Shell and TravelCenters of America earlier this year opened the first of what is planned to be a network of LNG lanes in the U.S.; and Pivotal LNG is working with fleets such as UPS.
Tank-size for tank-size, LNG will get you further down the road than CNG, but onboard storage and therefore range is limited (see above) to about 600-650 miles.
(For those unfamiliar with natural gas, the engines always burn the fuel in a gaseous state. The difference between liquid and compressed natural gas applies only to how it’s transported and stored onboard the truck.)
Norton points out that LNG tank systems weigh less and cost less than CNG tanks, but that’s never the end of the comparison. You also have to consider range, tank space and weight on the truck, fuel availability and a few other things with LNG:
- Service facilities need more elaborate (and more expensive) ventilation and methane detection systems than for CNG;
- Depending on the engine, LNG may require a pump and a heat exchanger to vaporize the liquid before it gets to the engine, which can add cost, weight and complexity;
- The liquid has a limited storage life. It will begin to boil off inside the tank after a period of time if you aren’t using the truck. LNG systems might be better suited to slip-seat operations where the truck runs around the clock.
One application particularly well suited to LNG is the port operations in California. Carrick says they are running about 800 trucks on natural gas at the Ports of Los Angeles and Long Beach. While the savings from using CNG compared to LNG would have been in the hundreds of millions of dollars over time, fueling 400-500 trucks a day on CNG just would not have been possible.
“They are bringing in several trailer loads of fuel each day,” he notes. “If you had a compressor station, the machinery and the storage to accommodate that number of trucks each day would be just monstrous – I don’t know how you could put them on one piece of property. LNG absolutely is the answer there for high-speed fueling of huge number of trucks like that.”
That brings to mind the scene at a typical busy truckstop around suppertime. Who can say when natural gas might become popular enough to drive that kind of volume through a single truckstop?
Nearly every sector in Class 7 and 8 is now embracing natural gas in some form. Volvo’s Bio says the on-highway market has the highest potential for fuel savings, but the greatest dependence on infrastructure — not just for fuel, but also for service.
“It will be a slower growth until the service and fuel infrastructure matures,” he says. “The first opportunities are the major corridors, and providers combining fuel and service with well-trained technicians along those corridors will have a major competitive advantage.”
Bio also expects equipment makers will have proprietary fuel system options designed to provide customer-focused advantages, such as better fuel system fill-rates and weight reductions. He’ll be looking for improved aerodynamics and other fuel-saving features we’re getting today with diesels, as well as natural gas engines with up to 475 horsepower and 1,750 pounds-feet of torque.
While natural gas seems to have almost everything going for it, it remains a small part of the overall Class 8 market. As fueling infrastructure improves, market share is bound to increase, but there’s still the cost.