Should the government do more to encourage the uptake of nat-gas in the Canadian trucking industry?

by James Menzies

TORONTO, Ont. – Government has an important role to play in establishing natural gas as a viable transportation fuel, including resisting the urge to slap a road tax on the clean-burning fuel.

Jamie Milner, vice-president, market development and customer care with Enbridge, said during the first annual Natural Gas Vehicle Infrastructure Canada conference here that: “Attracting tax can really shut down things quickly.”

He acknowledged a road tax will eventually be inevitable, but would like to see it deferred as long as possible.

“What we’re really trying to do, is make sure we create a period of investment certainty,” Milner said.

He also called on government to be flexible with weights and dimensions regulations, for instance, by allowing natural gas-powered vehicles to carry extra payload to compensate for the added weight of the fuel and hardware a natural gas fuelling system incurs. He also called on governments to draw a correlation between the environmental benefits of running natural gas, and each province’s own GHG reduction targets. He pointed out 27% of the GHG emissions produced in Ontario are attributed to on-road transportation, and natural gas can reduce those emissions by 20-30%.

“Ontario is looking for ways to reduce their GHG, but they haven’t really looked at transportation, except for mass-market electric vehicles,” Milner said. “Governments have lots of instruments at their fingertips that they can use to help. We need a broader clean transportation policy, one that includes commercial vehicles.”

He argued Ontario must embrace and encourage the use of natural gas as a substitute for diesel if the province wishes to remain competitive with other jurisdictions. He applauded the provinces of B.C. and Quebec for providing incentives for fleets that purchase natural gas trucks.

Trucking companies, Milner said, can reduce their fuel costs by about 40% when switching from diesel to natural gas. Enbridge itself runs more than 600 natural gas vehicles (many are bi-fuel), and saves $1 million per year in fuel costs.

Milner said there are currently more than 50 large natural gas-fuelled vehicle models available direct from the OEMs.

“It’s not for lack of vehicle availability,” he said of the slow uptake.

Like others who spoke at the conference, Milner said there is plenty of evidence that natural gas will remain significantly cheaper than diesel for years to come. He predicted a “stable pricing environment” for natural gas right through till 2030. Even if natural gas doubles in price, he said, it will remain cheaper than diesel.

At current prices, carriers can reduce their fuel spend by 40%. Milner worries about what will happen if LNG takes hold in the US – where 200 refuelling stations are in the process of being built – and not here in Ontario.

“Part of this is, does Ontario want to be non-competitive with the US? No. Competitiveness is very important,” he said. “It’s like economic stimulus when you free up that kind of money in an economy.”

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