Alternative Fuels — Bridging The Gap

Successful Dealer Staff May 21, 2012

With a growing number of supply options, is now the time to explore alternative-fuel vehicles?

Adoption of alternative-fuel vehicles in the trucking industry has faced some strong headwinds in the last five years. In addition to significantly higher vehicle costs, the nation’s fledgling infrastructure – particularly for liquefied natural gas – has held fleets back from considering such options. As of this month, only a handful of public and private LNG fueling stations are on the national grid.

The slow buildout has led to small pockets of North America where LNG trucks can operate in local return-to-base applications, such as the one Southern Counties Express established in the ports of Los Angeles and Long Beach in 2007. In February, North American energy producer Encana opened an LNG fueling station in Frierson, La., to serve Heckmann Water Resources, which purchased 200 LNG trucks for use in the hydraulic fracking industry.

“It’s been a lot of talk up until this point. Now it’s starting to be reality.”

– Mark Hazelwood,

Pilot Flying J executive vp

Meanwhile, nearly every major truck manufacturer now offers at least one LNG-powered truck in its equipment lineup. As the number of vehicle options grows, equipment costs drop and diesel prices continue to soar, more fleets are forced to at least consider the option of alternative-fuel options in certain operations.

Incentives also are in the works to spur investment in alternative fuels. President Obama announced plans in March to increase and expand the tax credit for advanced vehicles up to $10,000 to help offset higher equipment acquisition costs. Navistar will provide natural gas-powered International trucks at the same purchase price as a diesel model if a fleet agrees to fuel up at Clean Energy Fuels locations.

But in order for LNG trucks to take hold industrywide, a larger rollout of LNG fueling stations is required, particularly for fleets in over-the-road operations.

Establishing corridors

In recent months, there is a surge in optimism for a larger network of LNG stations, as collaboration among truckstops, LNG suppliers and natural gas producers such as Encana and Chesapeake Energy is taking shape.

“It has gained much more attention with hard assets being deployed,” says Mark Hazelwood, executive vice president for Pilot Flying J. “It’s been a lot of talk up until this point. Now it’s starting to be reality.”

Shell has announced an LNG pilot program in western Canada, where the company has formed a joint venture with Flying J to create a corridor between Edmonton and Calgary by installing LNG fuel stations at three Flying J locations along the route. The first station will be installed later this year, and the corridor should be completed by mid-2013.

America’s natural gas highway

LNG truck fueling coast-to-coast and border-to-border

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