Have we reached the tipping point with natural gas?
February 14, 2012
February 14, 2012
There’s been so much talk over the past 12-18 months about natural gas being the fuel of the future for the trucking industry, you had to expect an explosion – in the figurative sense – was imminent.
That explosion may have happened over the past few weeks.
First there was Navistar International announcing a partnership with American gas supplier Clean Energy that effectively addresses the two primary barriers standing in the way of the widespread adoption of gas-powered trucks: the cost of the trucks (they’re $30-$50K pricier) and availability of the fuel. In short, the two companies formed an alliance under which they’ll provide fleets with gas-powered International trucks at the same purchase price as their diesel equivalents, provided fleet owners agree to fuel up at Clean Energy fueling stations.
Clean Energy will essentially offset the incremental cost of the technology and then charge a premium on the gas for a period of five or six years, but all the while the fleet will still enjoy fuel prices significantly lower than diesel.
For its part, Clean Energy has committed to build hundreds of natural gas fueling stations on well-travelled highways throughout the US and eventually it vows to have a natural gas station every 250 miles. This program is feasible for Canadian carriers running south and at the announcement, I received assurance that Canadian fleets would not be excluded from the offer.
Jim Hebe, the outspoken sr. vp of North American sales operations with Navistar, told a group of us truck writers the night before the announcement that if the program doesn’t change the trucking industry, he’d “Pack my shit and go home.” I didn’t see him packing his bags after the program was launched. It could be a real winner. For one, Challenger CEO Dan Einwechter had this to say about the program in an exclusive interview with him you can read in the March issue:
“The International announcement last week with Clean Energy in the US, I found that very intriguing. They took a problem and found a different way to approach it and that will help, I believe, get that to the next level. Six months ago I would’ve still said I’m not really sure (about natural gas). Now I would tell you, boy that looks pretty intriguing.”
Just days after Navistar’s announcement, Shell revealed plans to build a natural gas corridor between Edmonton and Calgary, which will set the stage for the roll-out of a broader network of natural gas fueling stations across North America. Shell’s plan doesn’t offer a solution to the high cost of gas-powered trucks, but the company did promise to offer up gas trucks for one-week trials so fleets can gain some comfort with the technology.
It’s another forward-thinking initiative that should go a long way towards nudging natural gas closer to the mainstream. There’s good reason to consider natural gas as a potential fuel for the trucking industry.
For one, we’re sitting on vast quantities of the stuff – at least 100 years’ worth – and new fracking methods are making it possible and cost-effective to extract natural gas from previously untapped depths.
There’s no other way to look at it; we’re sitting on a goldmine and, as natural gas advocate T. Boone Pickens said at the Navistar announcement, we’d be foolish to let the opportunity unused.
Still, lest we get too enthusiastic, there is a potential fly in the ointment for natural gas. As Dan Einwechter pointed out to me in the same interview I previously referenced, gas is cheap in part because there’s no road tax on it. If the trucking industry suddenly transitioned to gas, you can bet the feds would move quickly to tax natural gas in much the same way that they do diesel today.
It’s a reasonable point. One we need to pause to consider before we go leaping headlong into natural gas. Still, the price gap between natural gas and diesel is significant and expected to remain that way for the foreseeable future.
It very well could be that we’ve reached the proverbial tipping point and that natural gas is ready to take off as the fuel of the future for the North American trucking industry. What do you think? Will gas-powered trucks be the norm in the next 5-10 years? Let’s hear some prognostications, people.
James Menzies is editor of Truck News magazine. He has been covering the Canadian trucking industry for more than 15 years and holds a CDL. Reach him at email@example.com or follow him on Twitter at @JamesMenzies. All posts by James Menzies