East Coast fleets consider advantages of natural gas
October 2, 2012
HALIFAX, N.S. -- The potential of natural gas as a viable trucking fuel is no longer a curiosity; it has implanted itself into the collective consciousness of trucking industry decision makers and seems unlikely to go away.
HALIFAX, N.S. — The potential of natural gas as a viable trucking fuel is no longer a curiosity; it has implanted itself into the collective consciousness of trucking industry decision makers and seems unlikely to go away.
While the industry has had its flirtations with natural gas before, Alicia Milner, president of the Canadian Natural Gas Vehicle Alliance, says this time it’s different. She said there’s been a structural shift – a decoupling – of the price correlation between diesel and natural gas.
“Natural gas and oil (pricing) used to track together,” Milner said during a panel discussion on natural gas at the Atlantic Provinces Trucking Association’s Transportation Summit. “That has now changed. These two commodities are splitting now because of the huge difference in supply in North America.”
Milner said Canada and the US both sit on a 100-year supply of natural gas. Meanwhile, demand for the fuel is decreasing due to the construction of more energy-efficient buildings combined with increased production resulting from improved fracking techniques.
Canada is the world’s third largest producer of natural gas. Half of our production has traditionally been exported to the US, but they, too, are enjoying unprecedented access to their own abundant supply and now have less need for Canadian imports. For all these reasons, Milner said there’s a lot to like about Canada’s transportation industry adopting natural gas where applicable.
Currently, natural gas costs about 40% less than diesel fuel. It enjoys federal and provincial road tax exemptions, which panelists agreed won’t last forever.
“Could this change? Yes. If we’re successful (in transitioning to natural gas in trucking), we fully expect it will change,” Milner said of the tax exemptions currently granted on natural gas. “We’ve been trying to inform Ottawa to let it first get into the market, give it a honeymoon period and then of course it will have to attract taxes; that’s what pays for roads, bridges, etc.”
By the time natural gas is taxed, Milner said there will hopefully be economies of scale in place to bring down the high initial purchase price of the vehicles.
Current pricing in Canada provides natural gas users with a savings of about 32 cents per litre. So if the federal excise tax of four cents per litre is applied to natural gas, along with a modest provincial fuel tax, the spread will still be significant enough to provide a return on investment, Milner pointed out.
Adding to proponents’ excitement about the fuel is that it can be a renewable resource, derived from the methane produced by trash. While it may seem futuristic, Milner pointed out Gaz-Metro has already inked a deal with the city of Riviere du Loup to supply renewable natural gas.
Truckers themselves now have access to an unprecedented selection of natural gas vehicles, including 11 factory-built highway tractors. Engine choices remain limited for now to the 9-litre Cummins ISL G – which can run off either compressed or liquefied natural gas – and the 15-litre Westport HD, which is only available in an LNG configuration. The ISL G is rated at up to 320 hp, is spark-ignited and doesn’t require a diesel particulate filter (DPF) or selective catalytic reduction (SCR). The Westport HD requires a 5% mix of diesel fuel for ignition purposes and as such, still requires SCR and a DPF.
While the torque and horsepower offerings between those two products cover a fairly broad swath, the industry is eagerly anticipating the 2013 launch of the Cummins ISX 12 G, which will offer up to 400 hp in either CNG or LNG configurations. Meanwhile, for its part, Westport is coming out with a 500-hp rating next year.
Thus far, the Westport engine has been most popular in Canadian on-highway applications. There are about 120 LNG highway tractors in use today, mostly owned by Robert Transport in Quebec and Vedder Transportation in B.C. Both Robert and Vedder have fueling stations installed at their own facilities, but Milner said four truck stops will be offering LNG by 2013: GazMetro in Quebec City; and Shell in Calgary, Edmonton and Red Deer, Alta. (Irving Oil also announced at the Summit its intent to offer LNG at five of its fueling stations in Eastern Canada).
Milner noted both Robert and Vedder enjoyed government assistance to help offset the high cost of natural gas-fuelled trucks, and added regulators in Nova Scotia, Ontario and Alberta have at least shown interest in offering incentive programs of their own. B.C. already has a five-year program in place that will pay $60 million in incentives while Quebec was first to offer funding of up to $15,000 per truck.
Still, that contribution, while welcomed, doesn’t come close to covering the full incremental cost increase for natural gas trucks.
Class 8 tractors with the Westport HD engine typically carry a price premium of $65,000-$90,000, depending on whether the truck is fitted with one tank or two, explained Westport’s Eve Grenon-Lafontaine. (A single 120-gallon/54 diesel gallon equivalent tank has a range of 275 miles). The tanks, at about $30,000 a piece, are the most costly component of a natural gas vehicle. Even so, she said a payback can be achieved in two to four years, depending on the application. She said quicker paybacks are achieved in heavy-GVWR, high-mileage applications. Specifically, Grenon-Lafontaine said an LNG truck running 125,000 miles a year at 5 mpg will provide fuel savings of about $37,500 per year based on the current price spread between gas and diesel.
Adam Whitney, national account executive with Cummins Canada, said the ISL G costs $40,000-$50,000 more than a diesel-powered equivalent. Since these are typically smaller, regional trucks, he used 60,000 miles per year over a six-year period averaging 25 mph for his calculations. He projected a fuel savings of $76,000 over a six-year life-cycle.
Natural gas also adds weight to the vehicle, to the tune of 800-2,000 lbs. Whitney pointed out about 400 lbs of that is recovered with the ISL G engine since it no longer requires the DPF and SCR. In B.C., Vedder Transport has been able to negotiate a 3,300-lb weight exemption for its natural gas vehicles.
There are maintenance requirements on natural gas-fueled trucks, including the use of a specially formulated engine oil for the ISL G. More visual inspections are required of the operator to ensure the high-pressure gas lines are secure. Drivers should be trained on the trucks’ in-cab methane detection system and on fuelling. Filling an LNG truck is more complex, requiring gloves and a mask. LNG is stored at -160 C while CNG is compressed to 3,600 psi.
Each of the panelists acknowledged that natural gas isn’t the perfect solution for everyone, but that it has its place and that manufacturers and suppliers are committed to the technology.
“If you look ahead, over the next two years almost every single truck manufacturer will have natural gas products available,” said Bill Howell of Irving Oil. “There’s a wide gamut of selections for a fleet. It requires a lot of analysis and you need to understand what you’re getting into.”
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