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Page added on April 25, 2013

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Natural gas becomes a fuel for the long haul

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The natural gas boom has already upended the American power industry, displacing coal and bringing consumers cheaper electricity.

Now the trucking industry, with its millions of 18-wheelers moving products like potato chips, underarm deodorant and copy paper around the country, is taking a leap forward in switching from petroleum to cleaner-burning natural gas. And if natural gas remains cheap, consumers may benefit again.

This month, Cummins, a leading engine manufacturer, began shipping big, new engines that make long runs on natural gas possible. A skeletal network of refueling stations at dozens of truck stops stands ready. Major shippers like Procter & Gamble, mindful of both fuel costs and green credentials, are turning to companies with natural gas trucks in their fleets.

And in the latest sign of how the momentum for natural gas in transportation is accelerating, United Parcel Service plans to announce in the next few days that it will expand its fleet of heavy 18-wheel vehicles running on liquefied natural gas, or LNG, to 800 by the end of 2014, from 112. The vehicles will use the new Cummins engines, produced under a joint venture with Westport Innovations.

UPS, like the rest of the industry, still has a long way to go in the conversion, but the company hopes to make natural gas vehicles a majority of its new heavy truck acquisitions in two years. The company is benefiting from incentives provided by various states and the federal government, which offer tax credits and grants for installing natural gas fuel stations and using vehicles fueled by natural gas.

“By us doing this it will help pave the way and others will follow,” said Scott Wicker, chief sustainability officer at UPS. “Moving into LNG is a means to get us onto what we see as the bridging fuel of the future and off of oil. It’s the right step for us, for our customers and for our planet.”

The move could also cut the country’s oil import bill. Right now, about 8 million heavy and medium-weight trucks consume 3 million barrels of oil a day while traveling the nation’s highways. That is nearly 15 percent of the total national daily consumption and the equivalent of three-fourths of the amount of oil imported from members of the Organization of the Petroleum Exporting Countries. Roughly two-thirds of the diesel used as transportation fuel nationwide feeds 3 million 18-wheelers, the main trucks hauling goods over long distances.

In the last four years, the natural gas shale drilling boom has produced a glut of inexpensive fuel, leading producers to argue that the country should wean its commercial and municipal transportation systems from a dependence on imported oil to domestically produced natural gas. It is cheaper, saving truckers as much as $1.50 a gallon, and it burns cleaner, making it easier to meet emissions standards. The domestic fuel also provides some insulation from the volatile geopolitics that can drive up petroleum prices.

Still, manufacturers and fleet owners have been slow to switch, partly because natural gas vehicles can cost almost twice as much as conventional trucks and because only a few gasoline stations have the specialized equipment needed to dispense the fuel.

Now, as name-brand manufacturers and chains like Nike and Wal-Mart have pressed for transportation of their goods by natural gas vehicles and companies like UPS, FedEx and Ryder System have started exploring the option, truck makers have begun bringing natural gas vehicles to the market. Major manufacturers, including Navistar and Volvo, have plans to offer long-haul natural gas vehicles.

Clean Energy Fuels — a company backed by the financier T. Boone Pickens and Chesapeake Energy — has peppered major routes with 70 stations, many at truck stops operated by Pilot Flying J. (The truck-stop company, whose chief executive is Jimmy Haslam, owner of the Cleveland Browns, is separately under investigation for potential rebate fraud.)

Clean Energy has plans to complete 30 to 50 more by the end of the year. Shell has an agreement to build refueling stations at as many as 100 TravelCenters of America and Petro Stopping Centers while ENN, a privately held Chinese company, hopes to build 500 filling stations as well.

That emerging network “really has changed the interplay between the shippers and the contracted carriers,” said Andrew J. Littlefair, Clean Energy’s chief executive. “The whole deal’s beginning to change.”

Though the network is growing rapidly, it has a long way to go. As of May 2012, only 53 LNG fueling stations were in the United States, more than two-thirds concentrated in California, along with 1,047 compressed natural gas stations around the country, according to the Energy Department. In comparison, there were 157,000 fueling stations selling gasoline.

Vehicle use of natural gas in the United States is still negligible but it has been growing. Among fleets whose vehicles travel shorter routes, like transit buses, refuse haulers and delivery trucks, use of compressed natural gas is much further along. Last year, more than half of newly purchased garbage trucks ran on compressed natural gas.

The federal Energy Information Administration last year projected that if enough LNG filling stations were built and economic conditions were right, sales of heavy-duty natural gas vehicles could increase to 275,000 in 2035, equivalent to 34 percent of new vehicle sales, from 860 in 2010. But estimates vary. Citigroup recently forecast that 30 percent of the heavy truck fleet would shift to natural gas by the end of the decade, but some in the transportation industry put that figure much lower.

If the fuel remains cheap, consumers could see a variety of benefits, from cheaper shipping to lower prices at the cash register. Much of the industry has a long way to go, however.

Bend Bulletin



8 Comments on "Natural gas becomes a fuel for the long haul"

  1. BillT on Thu, 25th Apr 2013 2:56 pm 

    “… If the fuel remains cheap,…”
    By the time the switch is made, Natgas will be back to the $9+ levels again and all savings will be gone along with the fraking gas bubble.

  2. GregT on Thu, 25th Apr 2013 3:16 pm 

    “Now the trucking industry, with its millions of 18-wheelers moving products like potato chips, underarm deodorant and copy paper around the country,……”

    This sentence pretty much sums up, how far removed from reality we have become.

    BillT, as usual, is correct.

  3. Plantagenet on Thu, 25th Apr 2013 3:34 pm 

    Obama says the US has 100 year of NG supply.

    Who should we believe….President Obama or “BillT”?

  4. DC on Thu, 25th Apr 2013 3:56 pm 

    More ‘rigs’ on NG nonsense. Diesel was picked for ‘rigs’ for a specific reason. Diesel makes sense for large heavy trucks. You never see a ‘gas’ or propane ‘rig’ because they simply consume too much fuel to to go too little distance. And, if you carry more fuel, your MPG goes down even more.

    So diesel was the only real option. NG, makes even less sense for ‘rig’s than gaz-o-line. That old windbag Pickens is banking on his gov’t handing him a sweetheart subsidy so he can make bundles of fiat currency on a fools idea. I think he gets his inspiration from the corn ethanol boondoggle. He must have looked at that and thought, if those guys can get a subsidy for an idea that make no sense at all, and completely fails to address the root problem, so can I.

    Of course, none of this even touches on the failed model of shipping plastic salad shooters from China all over the continent in the first place.NG ‘rigs’ would spend so much time refueling, any tangible ‘benefit’ of switching would be lost on that alone. All those independent ‘contractors’ that haul all that toxic corporate shyt around and are paid so little they piss in plastic jugs and toss them out the window, wont be thrilled about about have to stop every 150 miles to refuel I bet…

  5. GregT on Thu, 25th Apr 2013 5:33 pm 

    Who should we believe….President Obama or “BillT”?

    Q: How can you tell when a politician is lying?

    A: When his lips move.

  6. econ101 on Thu, 25th Apr 2013 6:30 pm 

    Diesel was regulated, taxed and priced out of the market by peak oil politics, environmentalists and tax/spend liberals. Now it costs more than gas based on its energy content wich speaks to its wonderful eroei. NG will deliver the same torque and drive the truck just as well as desiel.

    Wall mart etc are not switching because of a desire to go green. They know thats nonesense but will sell well to a mislead public. They are in business with T Boone and others and will profit mightly. Yea Green! LOL

  7. BillT on Fri, 26th Apr 2013 2:27 am 

    BTW: Gasoline here in the Philippines is about $5 per gallon and diesel is $4. I wonder why? Gasoline is used by the people. Diesel by the corporations. Do you see the connection? The Philippines promotes industry. The US promotes waste.

  8. econ101 on Fri, 26th Apr 2013 7:33 pm 

    LOL. NG is the better fuel for transport and has been for a number of years. It will remain this way for a long time. Unfortunately the US is under the veil of peak oil political propaganda and the only way many of the “lofo knuckleheads” can see the light is to tell them NG is green. Once they hear that from MSNBC they are sold on it.

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