C.A.T. stands by decision to go with CNG, despite falling diesel prices

TORONTO, Ont. — Having advised his company to invest heavily in 100 natural gas-powered trucks just months before oil and diesel prices experienced their precipitous declines, Hugo Brouillette opted not to wear a tie to the PIT Conference this week.

The vice-president of asset management for C.A.T. said he didn’t want to invite any additional choking hazards into his life, beyond what already existed back at the office.

But with all joking aside, when addressing the PIT audience, Brouillette still seemed comfortable with the decision. The trucks are still on order and should be in service by August, once the fuelling network connecting Montreal, Que. to Laredo, Texas is completed. The public-access fuelling stations are being built by Gain Clean Fuel in: Coteau du Lac, Que.; Mississauga, Ont.; Scranton, Penn.; Charlotte, N.C.; and Laredo, Texas.

Despite the rapidly shrinking spread between the price of natural gas and diesel, Brouillette stands by the decision. Not only is diesel expected to once again spike in price – eventually – but the company also has had its fill of reliability problems associated with the latest emissions systems on today’s diesel-powered trucks.

When it first looked at CNG, only an 88 diesel gallon equivalent tank package was available, making it impractical for linehaul. Now, the company can get 165 DGE tanks while maintaining the payload it requires for its US-bound loads, providing it with an acceptable range of 600 miles. The tanks add about $50,000 to the cost of the trucks, some of which the company is hoping to recover in the form of provincial incentives.

“The reason we chose CNG was because of the low cost (of CNG), there’s less technology on the engine and it’s easy to use for the driver,” he said.

It’s a big commitment. With 350 trucks in the fleet, C.A.T. is effectively changing over more than a quarter of its fleet to CNG. In doing so, it will lower its carbon footprint by 17%, Brouillette said.

Louis Mellet, director of business development with Ryder System, said low diesel prices are the “800-lb gorilla in the room,” but added in the right application, natural gas can still deliver an acceptable payback – even with oil prices at $65 per barrel with incentives, or $75 per barrel without. That’s based on a tandem axle day cab running 100,000 miles per year with a 123 DGE tank package.

Mellet said the ISX12 G engine is proving to be very reliable – as long as it’s kept within its approved GVWR limit of 80,000 lbs.

“Everybody is very comfortable with the 12L and its performance,” he said.

Many fleets are continuing to add natural gas trucks to diversify their asset portfolio and protect against a sudden rise in diesel prices, he added.

With 500 natural gas vehicles on the road accumulating 30 million miles, Ryder has learned a few lessons along the way. Mellet said one of those lessons is to hone in on and work with a limited number of fuelling providers. And if your volumes will allow, ask for dedicated lanes at public fuelling stations so your trucks don’t end up having to queue up behind other vehicles, extending fuelling times.

“You have to have the ability to leverage your size and scale onto one or two vendors if you have a big fleet,” Mellet said. He also suggested working with fuelling partners that will ensure back-up storage on-site and quality fuel.

“It’s really critical if you’re thinking about this, that you really think through who you’re going to partner with and leverage your scale onto one or two partners,” he advised. “We foresee lanes that will be dedicated to customers, that will not be directly affected by outside traffic.”

While lower diesel prices have curtailed interest in natural gas, technology continues to improve – especially related to the tanks. Ryder has worked with a partner to take 800 lbs out of a standard tank package over the last year.

For now, without the availability of a 15-litre engine capable of gross weights in excess of 80,000 lbs, Mellet acknowledged Canadian fleets are facing some headwinds. However, he said it’s still a good fit for fleets such as C.A.T., which run primarily north-south hauling lighter payloads.



James Menzies

James Menzies is editor of Today's Trucking. He has been covering the Canadian trucking industry for more than 18 years and holds a CDL. Reach him at james@newcom.ca or follow him on Twitter at @JamesMenzies.

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