The LNG revolution is nigh
One of the most consistently debated topics in heavy-duty trucking is when the natural gas revolution will finally climb from its bunker and take the hill.
Andrew Littlefair, CEO of Clean Energy Fuels, says go ahead and grab your bayonets.
“It is happening now,” he said while serving as a special Executive Decision guest on Jim Cramer’s Mad Money program Wednesday in recognition of Green Week.
“All the major equipment manufacturers that make engines have announced product,” he adds. “That’s different than it was a few years ago. You have big significant companies like GE and Shell now saying they want to get into the business.”
I’m a semi-regular watcher of Cramer’s Mad Money. You know Jim Cramer. He’s the “BOOYA!” screaming maniac that tells you where to park your money.
It’s like having an 8 year old on a sugar high give you investment advice.
This week, Cramer has dedicated his show to green energy and companies that support the effort. To his credit, Cramer’s been a proponent of natural gas in trucking for a while, and industry players are finally beginning to jump on the “BOOYA!” bandwagon.
One of the country’s largest carriers this week made a major commitment to jump into the LNG pool.
“UPS announced plans to add seven times as many LNG trucks as they had a year ago,” he said of the carriers intent to add 700 LNG trucks and fueling stations.
Littlefair credits Cummins Westport for blazing the trail, and finally hitting the sweet spot in the market that LNG loyalists have been clamoring for.
“That 12 liter engine,” he says. “We really didn’t have the right engine for America’s truckers, and now we do…And next year, you’re going to have a 13 liter by Volvo.”
A quality engine, Littlefair says, will do as much to drive the market toward natural gas as the potential for fuel savings.
“Five years ago, we didn’t have hardly any natural gas refuse trucks,” he says. “In 2008, a good engine came out, and this year 63 percent of all the new refuse trucks being purchased are natural gas. Another 35 percent of all new buses are natural gas.”
Littlefair expects many of heavy-duty trucking’s major players to initiate pilot programs with natural gas trucks with goals of feeling out the fuel and associated equipment without having to make a large investment in the experiment.
“We saw that with the refuse industry,” he says. “These are good operators. They’ve got to get familiar with the 12 liter. You’re going to see about 2,500 trucks entered into it.”
Pressure from customers will also move the market, Littlefair says, as freight clients look to trim transportation costs.
“Proctor and Gamble…they don’t have any trucks. They hire trucks,” he says. “They want the costs low because they pay for the fuel. They’ve already gone out to (request for proposal) and they’ve asked for 10 percent of their fuel budget in 2013 to be natural gas. That’s what you’re beginning to see; these big shippers putting pressure on the truckers because they know they can save money.”
FexEx, another of the country’s largest carriers with 90,000 vehicles and 16,000 heavy duty trucks, is testing six natural gas trucks.
“He’s just make sure it’s going to work,” Littlefair says of Bill Logue, president and chief executive officer of FedEx Freight Corp.
“I believe they’re going to be a big user of this,” he says. “They buy 600 million gallons of diesel fuel a year. So if they can save a dollar and a half, which I believe they can if the trucks do what they will do, that’s big money.”
With Allied Forces like UPS, and a potential tail gunner in FedEx, it sure sounds like LNG has put down their grenades and is ready to storm the gates with Cummins Westport leading the charge. And the invasion could be swift and epic.
Jason Cannon is Online Managing Editor for Successful Dealer. Follow him on twitter at @By_Jason_Cannon.