Future is bright for natural gas, but early adopters face “bumps in the road”
August 23, 2012
DALLAS, Texas -- C.R. England is struggling to achieve a payback on a fleet of five day cab tractors running liquefied natural gas on a dedicated run between Southern California and Las Vegas, according to Dan England, chairman of the...
DALLAS, Texas — C.R. England is struggling to achieve a payback on a fleet of five day cab tractors running liquefied natural gas on a dedicated run between Southern California and Las Vegas, according to Dan England, chairman of the 4,800-truck fleet.
Speaking at the Commercial Vehicle Outlook Conference, England said the five Kenworth T800 trucks equipped with the Westport 15-litre HD LNG engine were deployed last October and are currently running a loop for Coca-Cola that takes them 250 miles in each direction. There are LNG filling stations at each end of the route, England explained, with each of the trucks running about 500 miles per day.
The trucks are on a full-service lease with Paccar but “pretty staggering” maintenance costs of about 11 cents per mile (compared to 5-7 cents for diesel-powered vehicles) are eating into the fuel savings, England said.
C.R. England opted for the 15-litre Westport LNG engines because of the elevation changes along the route which may not have been well-suited to the smaller nine-litre Cummins ISL G. England said he’s anxiously awaiting the larger 12-litre ISX 12 G which will hit the market next year and will run on either compressed or liquefied natural gas.
Fueling has not been one of the detriments to the LNG technology. England said drivers have been trained to fuel the trucks, and while they need equipment like gloves, hard hats and masks, they haven’t experienced any problems with the fueling requirements.
A bigger concern has been the higher maintenance costs. England said the LNG trucks require oil and fuel filter changes twice as frequently as their diesel counterparts and valve adjustments have been required after just 60,000 miles compared to 500,000 miles on diesel tractors.
“You begin to see, there are some additional costs associated with running LNG versus diesel,” England said.
There have also been more frequent breakdowns with the LNG trucks. One was placed out of service for two consecutive weeks and of 19 engine-related breakdowns, 10 were related to the LNG system itself, England said.
“We’re not real high on what’s happening with our application right now,” England said. “To get to a break-even point on a 15-litre engine, we have to be out there with a diesel cost of about $4.80 and it isn’t there now, so obviously we’re not breaking even with these 15-litre trucks.”
He said Paccar has been working with the carrier to address issues and that he still feels natural gas is a viable option going forward. He said the 12-litre ISX G will likely be a better fit for C.R. England’s application and he also said engine costs must come down to make natural gas more feasible.
“Quite simply, the cost of these engines has got to come down,” England said. “And it will, with volume it will come down.”
Despite the “bumps in the road,” England said there are benefits to transitioning to natural gas.
“The reason we jumped into it is, we want to be environmentally responsible and save emissions but most of all we want to run these things profitably and get a return on investment,” England said. “Natural gas is still new and evolving and we have no doubt that we’re going to see a pretty good percentage of our fleet five years down the road running natural gas.”
England also threw water on the idea that fuel surcharges will be a thing of the past when natural gas takes hold.
“It shouldn’t go away,” England said of the fuel surcharge. “There are a lot of things to sort through here; we do feel the benefits of natural gas need to be passed along to our customers and ultimately the consumer, but by the same token we feel the carrier oughta be able to benefit from some of the savings we look forward to accruing because of natural gas.”
While C.R. England’s results have been less than spectacular, the technology will continue to evolve, insisted Kennon Guglielmo, chief technical officer, Econtrols, which produces fueling systems and components. He said when broken down to the price per unit of energy (or BTU), diesel currently costs eight times as much as natural gas.
“In the US, anything less than a 2:1 energy ratio between oil and natural gas is not enough to cause a critical mass movement towards natural gas adoption,” Guglielmo said. “Shale play came along and that plots us currently at about 8:1 today. The cost of a BTU of natural gas today is 1/8th the cost of a BTU of oil and that’s what gets you down the road.”
Robert Carrick, vocational sales manager, natural gas with Freightliner, said fueling infrastructure remains the biggest barrier and that too is improving. OEMs already offer a wide range of natural gas products, but fueling them remains the challenge.
“We hear all the time it’s the chicken and the egg syndrome. I’m here to tell you the chicken and the egg syndrome is dead – it’s the chicken and the feed,” Carrick said. “We, and our colleagues in the transportation industry, can build all the trucks you want with natural gas, we can get all the engines we need from Cummins, the tank manufacturers can come up with all the tanks we need to put on these trucks. The problem is there’s no place to feed these chickens, that’s the bottom line.”
Carrick said a compressed natural gas truck running 80,000 miles a year can produce a payback in a year-and-a-half at today’s fuel prices. Daimler Trucks North America (DTNA) has 1,500 natural gas trucks in service, 900 of them grossing up to 80,000 lbs. Carrick said he’s hopeful the US Natural Gas Act will be passed next year, which will result in expanded fueling infrastructure and incentives to offset the cost of the technology. If that happens, natural gas could suddenly surge into the mainstream, he suggested.
“Our forecast internally at Daimler, we think if all these stars align, we can easily be doing 20% of our build as natural gas by 2020,” he said. “That’s certainly a very attainable goal.”
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