Phil Crofts expects his investment in natural gas-powered trucks to eventually save his company money.
For now, however, he is happy that it allows him to use an American fuel with fewer emissions while also making his customers happy.
“In the past, the trucking industry has been a rat race to be the cheapest,” said Crofts, marketing director for Chicago-based Dillon Transport. “Now, if you can offer the latest, greatest, cleanest way to carry products, that rings a bell with people. If you service the best-in-class companies, they want to be clean. Another five cents a ton is not going to break them, but if they can get some good public relations for what they're doing to clean up Tampa or Dallas-Fort Worth, companies want to talk about that.”
Dillon Transport recently bought 25 liquefied natural gas-powered trucks and has ordered another 50 for delivery next year. The company has about 400 trucks out of regional yards in Texas and Ohio.
As an early adopter, Dillon is still dealing with several issues the industry hopes to soon work out.
“We've had some problems with the electrical systems,” Crofts said. “The engines also require expensive spark plugs, and we have to change the oil more often with more expensive oil. Also our maintenance facility has to be equipped with gas sensors and no-spark light switches.”
Dillon is using 8.9-liter natural gas engines, which are smaller than the company would have preferred. Larger 15-liter engines also are available, but those are more expensive and more powerful than Dillon needs. The company plans to trade its engines in for better-fitting 12-liter engines when they are available early next year.
“That's going to give us better performance, and we think our mileage will improve,” Crofts said. “That little tiny engine has to work really hard. With the little engine, we're limited to flat areas like Dallas, Oklahoma and Ohio. This bigger engine will let us go over mountains.”
The biggest challenge with natural gas vehicles is the availability of fueling stations across the country, Crofts said.
The natural gas industry is working to fix that problem. T. Boone Pickens created California-based Clean Energy Fuels Corp. with the goal of covering the country's main trucking routes with LNG stations at least every 300 miles. Oklahoma City-based Chesapeake Energy contributed at least $150 million to the effort, and Clean Energy has since partnered with Flying J to build 98 stations.
Royal Dutch Shell Plc recently announced its own plans for LNG stations.
The natural gas trucking industry is poised to grow quickly because the nationwide network of stations is almost complete, the truck engine manufactures are set to release the 12-liter engines and because oil and diesel prices remain high.
“Natural gas is a lot cleaner and dramatically cheaper than diesel,” said Matt Feighner, regional vice president for Clean Energy. “By wrapping your arms around the energy the country already has, you're going to stimulate jobs here or stop or mitigate the unbelievable wealth transfer of shipping our money overseas.”
Feighner said he is encouraged that competitors such as Shell have begun rolling out their own natural gas stations.
“It validates the direction we've taken,” he said. “Clean Energy has been the company to take a lead on this effort. Other companies are now saying they're sure it's going to work, so they're going to jump in.”
Lakeland, Fla.-based Saddle Creek Logistics Services was one of the first trucking companies in the country to add a fleet of natural gas vehicles.
Saddle Creek has about 400 trucks and recently added 40 compressed natural gas trucks with plans for 100 more natural gas vehicles by the end of 2013.
The company chose compressed natural gas instead of liquefied natural gas partially because the LNG engines were not yet available. Compressed natural gas also was less expensive for Saddle Creek's specific needs, said John Pleasants, the company's vice president and general manager of Florida operations.
“Natural gas offers improved reliability and protection from diesel disruptions and the volatility of diesel pricing,” he said. “It also reduces the dependence on foreign oil, replacing it with the nearly unlimited supply we have of natural gas here domestically. It meets our goals and our customers' goals for environmental responsibility.”
Saddle Creek is a regional carrier with yards in the Florida Panhandle and in Atlanta. Most of its deliveries are within 500 miles of those two locations.
By using compressed natural gas, the company was able to have a compressor installed in the yard along an existing natural gas line.
Compressed natural gas-powered trucks cost about the same as trucks with diesel engines, or about $100,000 to $120,000, according to industry estimates. But they require CNG storage tanks, which cost $35,000 to $60,000, depending on capacity.
Because of the equipment costs, Saddle Creek does not expect to save much money using natural gas initially, even though the fuel charge is about $2 per gallon equivalent cheaper than diesel.
“We are in a hurricane area, but because we use natural gas, we are not threatened by a disruption of diesel supplies or of sudden price spikes,” Pleasants said. “Just about all of our customers are looking for sustainability. We are not only doing the right thing, but we are also supplying our customers with what they want.”