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A New Way to Gas Up

November 21, 2013 By Conrad deFiebre, Transportation Fellow

Until the day the last ounce of the earth's fossil fuels is used up -- probably burned to power air-conditioning on an overheated planet -- there may be only one hope for reducing greenhouse gases in our atmosphere: Somehow extracting them and selling the carbon at a profit.

I don't know whether this is a business plan, black humor or tragic economic reality. But these disquieting thoughts bubbled up while considering what is, in the short term at least, a welcome efficient and relatively environmentally friendly emerging shift in power for heavy transportation vehicles from diesel fuel to natural gas.

Natural gas, like petroleum and coal, is a finite resource that when burned releases carbon and other pollutants that had been sequestered for millenia deep underground. But it spews much less of all the bad stuff and it's hugely abundant, particularly in North America, where it promises near energy independence in our time. With new extraction techniques flooding the market, it's also incredibly cheap, offering a 39 percent discount from its diesel energy equivalent, according to the Wall Street Journal.

So it's not surprising that heavy trucks, which make up just 1 percent of the U.S. vehicle fleet but consume 20 percent of the fuel, are fast converting to compressed and liquified natural gas. 

"The take up is just starting," the Journal reported. "About 5 percent of all heavy-duty trucks sold next year will run on natural gas, up from around 1 percent this year, according to industry projections."

Former wildcatter and oil tycoon T. Boone Pickens is among the invisible, odorless fuel's biggest proponents. A company he founded in 1997, reincorporated later as Clean Energy Fuels Inc., owns and operates hundreds of natural gas fueling stations from British Columbia to the Mexican border.

"It's 30 percent cleaner than diesel, cheaper by $2 a gallon," Pickens told FOX Business in August. "We have more natural gas than any other country in the world."

Despite this resource wealth, just a tenth of 1 percent of the natural gas consumed in the United States last year fueled vehicles, according to the U.S. Department of Energy. The trade group Natural Gas Vehicles for America says only 120,000 of the world's 15.2 million natural gas vehicles are on U.S. roads. It's much more commonly used here for heating and electricity generation.

In addition to U.S. taxes on petroleum fuels that are a tiny fraction of those in the rest of the industrialized world, a widespread lack of natural gas fueling infrastructure is a big reason for its slow penetration into American transportation, which now accounts for nearly a third of the nation's carbon dioxide releases.

Another impediment has been the higher cost of natural gas vehicles compared with those powered by diesel, plus lagging motor technology. But a 12-liter Cummins Westport Inc. natural gas engine, the first able to power America's 80,000-pound big rigs, went on the market this year, and Sweden's Volvo AG will introduce a natural gas engine for its heavy trucks next year.

Even Minnesota-based 3M is getting in on the game, starting production of large carbon-fiber natural gas fuel tanks, a field previously dominated by what the Journal called "only a handful" of manufacturers. Along with added capacity from the legacy producers, that should drive down a major cost driver of natural gas vehicles. It also will allow more conversions of gasoline and diesel engines, which the Journal said can be done "relatively easily."

More difficult will be developing a dense nationwide supply chain for natural gas, and adapting to refueling processes that can take all night -- two reasons why few expect many U.S. light-duty cars and trucks to convert soon from gasoline.

But a serious shift is already underway for mid-sized trucks that ply local or regional routes and can refuel at operators' terminals. For years, Minnesota natural gas utility Minnegasco and its CenterPoint Energy successor have featured service vans powered by their own product. On the national scene, Waste Management Inc.'s garbage fleet is fast turning to trucks powered by an 8.9-liter natural gas engine that has been available for several years. Other big companies cited by the Journal as making the switch include FedEx Corp., United Parcel Service, Ryder Systems Inc. and Lowe's Cos.

"It would be a big gamble to flip to [natural gas] if we thought it was going to flip back to diesel being cheaper," Waste Management Chief Executive David Steiner told the Journal. "But as far out as we can see, we think you are going to have lower gas prices and higher diesel prices."

Yes, there are many clear advantages to powering our heavy vehicles, including transit, freight trains and maritime vessels, with natural gas "as far out as we can see." But the biggest gamble of all may be failing to look beyond today's cleanest, cheapest fossil fuel to a barely dreamed-of future that burns none of this stuff whatsoever.

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  • Dyna says:

    November 25, 2013 at 9:28 am

    Hard to tell if this is a fad or not. I’m in the transportation biz, and I’m starting to see volume orders of 100 trucks or more with natural gas engines. Almost every one of these orders is from a big well capitalized company that can afford the higher upfront cost of the natural gas engine and fuel system, has the capital to install a fueling infrastructure, has profits that can be offset with tax credits, and a high public profile that can be boosted with a bit of green cred. And yes, the fuel is half the price of diesel.

    The down side is that for the smaller operators, fueling infrastructure doesn’t exist beyond the major metro areas and interstates- Where I live in southwest MN we don’t even have natural gas available to our houses. And while natural gas is half the price of diesel, it doesn’t give as good a mileage. In fact in city use with a lot of idling, a natural gas engine can consume twice as much fuel as diesel, negating any cost advantage. Then throw in the fact that for safety reasons, a natural gas vehicle cannot be resold and will have to be run to end of life rather than traded for a new one after a few years, and natural gas is a tough sell. That ownership model works for UPS which never trades or sells a used vehicle in one piece and can take a big tax writeoff on vehicle depreciation in a few years. But for a construction company, farmer, etc. that needs to keep a vehicle 20 years or more, natural gas won’t work. Throw in the fact that if natural gas prices rise faster than diesel prices, it will cost more to convert the natural gas truck to run on diesel than it’s worth. Thus the natural gas trucks market penetration is rather limited.