Fleet Management News & Business Info | Commercial Carrier Journal
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44 COMMERCIAL CARRIER JOURNAL | MAY 2014 S P E C I A L R E P O R T : N A T U R A L G A S foreseeable future. A mid-April report by the U.S. Department of Energy predicted a drop in diesel prices by as much as 10 cents per gallon over the coming summer. The retail price of CNG was $1.80 less per diesel-gallon equivalent than diesel in January, according to DOE. As long as the wide price spread between natural gas and diesel remains, there is still a business case to be made for exploring natural gas regardless of diesel price. Of course, fuel costs aren't the only consideration when looking at a conver- sion to natural gas. Although natural gas is a remarkable cheap domestically pro- duced fuel with retail prices ranging from $2.00 to $2.50 per DGE based on fuel type, equipment acquisition costs for new natural gas trucks are markedly higher than those for diesel trucks. In some cases, depending on the specifi cation, natural gas trucks can cost $30,000 or more than a comparable diesel truck. Truck OEMs say there's not much they can do about these higher acquisition costs at the moment. CNG trucks require so- phisticated high-pressure fuel systems, and LNG is a cryogenic fuel that is stored and used at an ultra-cold 1260 degrees Fahren- heit and therefore requires sophisticated, highly insulated storage tanks. While OEMs admit these systems are expensive, they also argue that the economies of scale eventually will mitigate upfront costs somewhat. Furthermore, they say, natural gas trucks used in proper applications can have fast return-on- investment times. Adjusting expectations None of this means OEMs have lost any of their collective commitment to natural gas as an alternative fuel. Nor has it cooled the enthusiasm of fl eets that chose to be early adopters of this technology. "We're still seeing quite a bit of inter- est in natural gas, especially from our larger fl eet customers," says Greg Treinen, Freightliner's natural gas segment man- ager. "With the introduction of the (Cum- mins) ISX12 G in the Cascadia last year, we set a record for natural gas truck sales in 2013. With the way sales and orders are developing this year, we expect to surpass last year's volumes." That said, Treinen admits the indus- try does seem to be experiencing a bit of a "cooling-off " phase at the moment. "Freightliner has delivered on an available product range," he says. "Though the hype surrounding natural gas has subsided, there is still underlying interest. Perhaps in this case, the market is now adjusting our expectations. The reality is that the purchase price is still very high for these trucks, and the purchase process sur- rounding natural gas trucks takes longer than it does for diesel products." Roy Horton, powertrain product mar- keting manager for Mack Trucks, says the industry is still in a learning phase when it comes to natural gas. "In general, demand for both types of fuels continues to grow," he says. As for the "product vs. infrastructure" debate, Horton says Mack does not consider technology or infrastructure as "leading" or "lagging." Instead, he emphasizes that both components have to be in place and performing for natural gas to continue to gain acceptance in fl eets nationwide. That mirrors the view held by Drew Cullen, vice president of fuels and envi- ronmental affairs at Penske Truck Leasing. "The fueling infrastructure will grow proportionally to the adoption of natural gas vehicles by fl eets," he says. Fleet adoption of natural gas as a viable alternative fuel is driven primarily by the economic and environmental benefi ts that the vehicles provide, Cullen says. "The fueling infrastructure improvements will continue as long as the price differ- ence between diesel fuel and natural gas is suffi cient to provide enough savings to overcome the incremental costs of the vehicles, and fl eets are able to realize the environmental benefi ts." Saddle Creek Transportation recently CURRENT NORTH AMERICAN NATURAL GAS OFFERINGS KENWORTH Kenworth off ers the Cummins Westport ISX12 G for the Class 8 T660 on-highway tractor and T800 short-hood vocational chassis, while the Cummins Westport ISL G is available for the W900S and T440 chassis suited for vocational applications such as mixers, plows, water tenders and various fi eld service demands. Customers can specify all of these models to run either CNG or LNG. FREIGHTLINER Freightliner made natural gas available via the Cummins Westport ISX12 G for its fl ag- ship Cascadia on-highway tractor in 2013, with full production beginning in August. Freightliner also off ers regional haul and vocational customers the M2 112 and 114SD natural gas models, both of which feature the Cummins Westport ISL G. Freightliner Cascadia CNG INTERNATIONAL International introduced its TranStar with the Cummins Westport ISL G last May. While Inter- national's current technology thrust is focused on fully integrating selective catalytic reduc- tion emissions systems into its current model lineup, future product plans include additional natural gas products. International TranStar CNG Kenworth T660 NG