Will natural gas replace diesel for the U.S. trucking industry?

The key is refueling stations -- and meeting up-front costs

  • CNGpump

A vast abundance of American natural gas resources, now accessible thanks to “fracking,” affords a tantalizingly large and economically competitive new automotive fuel opportunity. While not perfect, which almost nothing ever is, its utilization, both for heavy-duty transport and for family vehicles, can potentially afford real economies.

Right now, the largest impediment is a “chicken v. egg” conundrum. Market demand for the vehicles will hinge upon creating a satisfactory refueling infrastructure, which, in turn, must be justified by market demand. Can such development occur incrementally in the marketplace of free enterprise?  If it truly makes practical sense, I believe it can…and should.

First, let’s take a closer look at the present situation. There are two natural gas fuel options: compressed natural gas (CNG) for light vehicles which is stored at high pressure (usually at 3,000 to 36,000 psi); and liquefied natural gas (LNG) for heavy trucks which is cooled to greatly reduce storage volume….

According to Natural Gas Vehicles for America, about 40 percent of trash trucks sold in the U.S. last year were natural-gas-powered. Lower fuel costs relative to petroleum and active use to maximize savings can afford rapid payback of higher up-front costs. The next logical evolutionary development is to initiate an expanding cryogenically cooled LNG refueling infrastructure for long-haul heavy trucks. A positive step towards this objective is an agreement between Encana Natural Gas Inc. and California-based Heckmann Water Resources (HWR). HWR will supply water hauling services to Encana, a big Haynesville Shale player, in exchange for their creation of an LNG refueling station network for HWR trucks. HWR has recently ordered 200 long-haul vehicles from the Peterbilt Motors Corp. of Denton, Texas. They will be powered by LNG and CNG-adapted engines supplied by Westport Innovations Inc. of Vancouver, B.C.

Conversion from diesel to LNG will make HWR the operator of North America’s largest LNG fleet. Encana Corp. Executive Vice President and USA
Division Senior Vice President Eric Marsh characterized the arrangement as “…a major step towards encouraging many companies servicing the energy
industry to convert vehicles to run on affordable, environmentally responsible LNG or compressed natural gas (CNG).” Encana initially dispensed LNG to HWR’s truck fleet using mobile stations, and has now established a permanent facility which is also open to the public at Frierson, Louisiana, about 15 miles south of Shreveport. The station is adjacent to a conventional truck stop, and another company is building a CNG station next door….

Clean Energy Fuels, a company co-founded by T. Boone Pickens, aims to create a network of 150 LNG stations at Flying J truck stops across the U.S. by
the end of next year. The plan is to enable long-haul truckers to reach every major city on natural gas alone….

Clean Energy believes that its business has much to gain as competitors enter the market because it will incentivize more and more consumers to invest in
natural gas vehicles when they know they can fill up at their convenience. And despite negative earnings thus far, Clean Energy’s business does appear to be
on an upswing. Their fuel volume sold in the second quarter of this year was reportedly up 24 percent compared with 2011.

Presently, natural gas used as transportation fuel constitutes only about 0.1 % of total U.S. consumption. Nearly half of that amount is consumed in
California alone. A majority of states use less than 2 million cubic feet per month, and 11 states don’t use any. California received $5.5 million from the
Department of Energy (actually, from U.S. taxpayers) to support a UPS truck demonstration program. Of that money, $4 million went to pay extra costs of
the trucks, and $1.5 million went to Clean Energy of Seal Beach, California for a refueling station.

Do natural gas vehicles make economic sense? Well, under certain circumstances they can. So long as natural gas prices remain low compared
with petroleum and diesel, the cost savings on fuel can offset, and sometimes even outweigh, the added price premiums required for the special CNG and
LNG-adapted vehicles….

For example, using a federal government estimate, let’s assume that a typical American family puts 12,000 miles on a car. At 25 miles per gallon, they will
consume 480 gallons/year, resulting in a cost of about $1,920 at $4 a gallon. Natural gas at an equivalent price of about $2.50/gallon would save the family $720 a year. However, if that savings comes at the cost of a $10,000 vehicle purchase price premium (not accounting for generous taxpayer incentive contributions), then it’s not exactly a great bargain just yet.

The same general consideration applies to high upfront costs of heavy LNG trucks, currently amounting to about $90,000 more than traditional diesel-powered versions. As with CNG cars, this is in part because they aren’t as yet being mass-produced. On the other hand, those trucks log lots more miles
than cars, and the accumulated fuel savings can provide enormous business benefits over the long haul.

Also consider that fuel tanks used for natural gas vehicles are significantly larger and heavier than for petroleum and diesel types, presenting a give-andtake relationship between how much fuel is carried vs. how far they can travel. CNG tanks for cars and light trucks require about 6 times more space than for
diesel, and a typical semitrailer truck must carry 1.7 gallons of LNG for an energy equivalent of one gallon of diesel. They are also heavier, causing
problems for companies whose payloads are already approaching the legal highway limit.

Again on the plus side, natural gas burns cleaner than petroleum or diesel fuel, offering two important advantages. First, this can considerably extend
vehicle life and reduce maintenance costs, offering a major long-term profitability incentive for trucking operators to accept large upfront LNG
vehicle premiums. Also, the cleaner burning fuel reduces combustion byproducts over petroleum and diesel, cutting carbon monoxide emissions by
an estimated 90%-97%, and nitrogen dioxide emissions by 35%-60%. And yes, it also reduces carbon dioxide emissions by an estimated 25%-30%…if
you happen to buy into the climate crisis hype, and tend to worry that this really matters.

So, in the final analysis, what is the future for natural gas vehicles? I certainly wouldn’t bet against them, nor do I advocate spending more taxpayer treasure to make that evolution occur. It appears evident that our nation’s abundant supply of natural gas in combination with practical advantages afforded most particularly for LNG long-haul trucking applications will continue to become more and more attractive over time, expanding the infrastructure and driving down vehicle production costs through economies of scale. The free enterprise marketplace will attract investment, and strong risk-willing competitors will be rewarded, at least so long as government isn’t allowed to insert crony favorites….

Excerpted from Forbes online.  This article is available online at:


Photo credit: Wikipedia.


About the Author: Larry Bell

Larry Bell

CFACT Advisor Larry Bell heads the graduate program in space architecture at the University of Houston. He founded and directs the Sasakawa International Center for Space Architecture. He is also the author of "Climate of Corruption: Politics and Power Behind the Global Warming Hoax."