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A natural solution?

CALGARY, Alta. - Could natural gas capture mainstream acceptance as a fuel of choice for Canada's transportation industry?

READY TO ROLL: Natural gas-powered trucks, like this Pete Model 384 LNG are already in production. Now, all that's needed is the fuel.
READY TO ROLL: Natural gas-powered trucks, like this Pete Model 384 LNG are already in production. Now, all that's needed is the fuel.

CALGARY, Alta. –Could natural gas capture mainstream acceptance as a fuel of choice for Canada’s transportation industry?

It depends on many things, including whether or not natural gas remains abundant and affordable and if the conversion to natural gas equipment can be made attractive enough to the industry.

Thanks to breakthroughs in development and drilling technology, coupled with discoveries of major new gas sources, there’s plenty of the stuff available.

“We’ve got all this gas,” says Alan Boras, spokesman for natural gas producer EnCana, “so the question becomes, what do we do with it? Our view is to expand the use of natural gas in our economy.”

A gas producer pushing gas may not surprise the least cynical among humanity, but arguments can be made that a move toward natural gas could make business sense.

Natural gas -whether compressed (CNG) or liquefied (LNG) -has been little more than an interesting novelty in the transportation industry. Boras says heating and electric power generation are the major markets for natural gas currently and, while he thinks there are opportunities there, the area with the most growth potential is transportation: of the 250 million vehicles Boras estimates are on North American roads today, only some 100,000 or so are fueled by natural gas.

Depending on where you live and work, moving to natural gas could also be a proactive way to keep a step ahead of The Man. Boras says alternative fuels such as LNG are being pushed in California even as you read this. “They wanted to address some of the air issues around the Port of Los Angeles,” he says, “So they called for the use of LNG vehicles to clean up the air and have far lower emissions compared to diesel and gasoline.”

Boras claims the emissions from natural gas vehicles are 25-30% less than those of conventional vehicles and particulates are way down as well, “so the advantage is you get a very competitive price, you get better environmental benefits and then there’s the economic spin-off.”

The economic spin-off of which Boras speaks is a plentiful, North America-based energy source as an alternative to buying foreign oil. Boras says “the dollars that would go to buy oil would then go into endeavours here, with jobs staying on the continent.”

Ah, but there’s the chicken and there’s the egg, and which came first? Natural gas vehicles and a natural gas infrastructure are unlikely to spring from the ground, fully formed. Existing vehicles may have to be retrofitted, new vehicles created, and places to refuel offered before we’re awash in a natural gas-powered future.

EnCana envisions natural gas corridors along the 401 through Ontario and Quebec in the east and between Edmonton, Calgary and Vancouver in the west -the routes with the heaviest commercial traffic. “We looked at the main transportation corridors where the large populations are in Canada,” Boras says, “and we have approached the federal government with the idea of coming up with a policy that would support development of the infrastructure.”

Such a “pipe dream” would require the establishment of facilities to compress the gas and then fuel up the trucks at key locations along the long-haul corridors. And it would probably have to happen before fleet owners show much interest in converting their equipment over to natural gas.

Still, it’s an idea whose time may come. According to Stephen Laskowski, vice-president of the Ontario Trucking Association, the industry is already looking into various alternative propulsion devices -whether they be hybrid-electric, fuel cell or gas -as well as tweaks such as new tire and aerodynamic technologies. But there are many speed bumps ahead.

“You’ve got to look at it from the carriers’ perspective,” Laskowski says. “They’re in the business of re- turn on investment so if they’re going to spend more on capital pieces of equipment they need to know the return on that. That’s probably the role of government, to shorten that return on investment, especially in the early stages.”

Laskowski says government could help facilitate a natural gas alternative by providing “some type of capital incentive or an operating incentive for the carriers to move toward this type of equipment.”

EnCana’s Boras envisions a couple of possible incentives. “Government funds could go to the cost of converting existing trucks or to the purchase of new vehicles with engines built to run on natural gas,” he says, “and investment could go to people who want to establish the infrastructure, namely the fueling stations along those corridors.”

Boras points out that the natural gas piping network goes to all major cities in the country already, so it’s just a matter of adding “the fueling component and the vehicle -and you aren’t building a whole new vehicle, just changing the powerplant and the fuel that’s used.”

In the meantime, there’s no rule that says natural gas fueling stations have to appear as if by magic at all service centres at once.

“That may be something you do down the road,” Boras says, “but in the shorter term when you don’t have an infrastructure, you look to fleet vehicles that return home every night -taxi cabs, garbage trucks and the like.”

Boras also sees natural gas as a way to lower one’s carbon footprint, which could make it attractive for government participation. “If you convert your home to more energy-efficient appliances, such as your furnace and windows,” he says, “there are government programs to support you. This is the same kind of thing. If the government decides it’s important to do this, then they could come up with programs that would support it.”

And the OTA’s Laskowski points out that “they have (them) for manufacturing equipment today, so certain types of manufacturing equipment that meet environmental criteria receive very favourable tax treatment and that encourages investment. I think that’s what you need with alternative fuels and engines and I think the government does have to step up and take a role here.”

Perhaps governments could just reduce taxes overall, leaving more in the corporate account for owners and operators to do with as fits their priorities.

“I do think there may be some who advocate that,” Laskowski says. “But if you want specific measures and specific actions you need specific approaches within the tax system.”

As for natural gas itself, “we currently have no board position,” Laskowski says. “Typically, every alternative fuel or propulsion system technology has its own unique challenges and the market should decide.”

Boras says the reaction from governments so far has been positive, though no commitment has been made. He says EnCana has been speaking to the federal and provincial governments in Canada as well as the federal and state governments in the US. “It’s one of those cases where people are learning about it, trying to understand what it’s about, what it would take, how it would fit their business and how it would fit government policy. In our view they’re very receptive.”

And of course the Obama administration is all ears when it comes to green things.

“We’re a member of a group that has been active in Washington, talking about the benefits of natural gas, contributing funds and talking to legislators down there about how to expand the use of natural gas in the US,” Boras says.

Government participation or not, a conversion to natural gas is obviously not going to happen overnight, yet Boras is confident.

“Sooner or later you have to replace your trucks,” he says, “and if this concept is up and running and feasible then why not look at it? If you have the facilities in place -for example you return to a central fueling place each night and you want to convert some of your fleet incrementally -it could be very beneficial.”

The OTA’s Laskowski says that if natural gas is going to be a long-term answer, there are short-term issues that have to be dealt with to carriers’ satisfaction before they’re likely to pu
t their money where their trucks are. These include the reliability of the gas network itself, the return a carrier can expect on its investment and what operating challenges there are.

“Even if the tax policy was changed the way we’d like,” he says, “no-one’s going to go out tomorrow and retrofit their whole fleet of vehicles. They’re going to test them and use it as a testing sounding board.”

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