With America's Natural Gas Highway (ANGH) taking shape, Clean Energy Fuels Corp President and Chief Executive Officer Andrew J Littlefair has a vision for natural-gas-fueled transportation that will provide a savings of $1.50 per gallon over diesel.
In his keynote presentation, “Clean Energy's Vision for NG Fuel Expansion,” he said the company's experience at the Ports of Los Angeles and Long Beach — fueling over 1,700 natural-gas trucks — shows that it's logistically feasible and economically sensible. He delivered the presentation at World LNG Fuels 2012, which was hosted earlier this year by Zeus Intelligence in Houston, Texas.
“That project worked,” he said. “Those trucks have operated very well, and customers have enjoyed savings of $1.60 or $1.80 a gallon.
“The ports proved to regional trucking firms that LNG (liquefied natural gas) can meet rigorous trucking duty cycles. There's so much product and a lot of potential savings. Even with a lower volume and building a lot of stations, you can save the fleets about $1.50 a gallon with LNG. Other fuels cannot say that, and that's why we're so excited about LNG.”
He said that a diesel truck costs $35,000 less than an LNG truck, but with NG fuel at $2.60 per gallon instead of $4, a simple payback can be achieved in 10 months at 200,000 miles, 13 months at 150,000 miles, and 20 months at 100,000 miles.
“There's a $28,000 incremental cost, but I'm very proud of our friends at Westport and Cummins for driving prices down,” he said. “The first trucks were carrying a $65,000 incremental cost.
“Diesel trucks have small efficiency gain, but there are terrific cost savings with NG (natural gas). If you're doing 200,000 miles based on the numbers, you have a 10-month payback — and that's without any government incentives. You're going to see this incremental cost come down. In the refuse business, the natural gas ISL G engine is cheaper than the diesel version. It's just the delivery system, the fuel system, that costs more.”
In January, the route plan for the first phase of 150 new LNG fueling stations for America's Natural Gas Highway was unveiled. The company has identified 98 locations and anticipates having 70 stations open by the end of 2012 in 33 states.
Many of the fueling stations will be co-located at Pilot-Flying J Travel Centers already serving goods-movement trucking through an exclusive agreement with Pilot to build, own, and operate natural gas fueling facilities at agreed-upon travel centers. Pilot-Flying J is the nation's largest truck-stop operator with more than 550 retail properties in 47 states.
“It gives us access to corridor trucking lanes,” he said. “They sell eight billion gallons of diesel a year, so our concept is that we want to work with somebody who knows trucks, truckers, and fuel.”
Truck engines
Scheduled for completion during 2012 and 2013, the 150 first-phase stations coincide with the expected arrival of new natural gas truck engines well suited for heavy-duty, over-the-road trucking. Engine manufacturers and original equipment truck manufacturers such as Cummins-Westport, Kenworth, Peterbilt, Navistar, Freightliner, and Caterpillar are expected to have Class 8 trucks available in engine sizes allowing for varied road and driving requirements.
“We've got the fuel,” he said. “You all know we've got plenty of natural gas. I believe we have the engines coming to the market. I've met with lot of people, and I think it's all coming together. As we talked to shipper fleets, we figured out they want to be sustainable. And they want to save $1.50 a gallon, and they're interested in talking to their contracted carriers about using LNG.”
Littlefair said that the ANGH stations are in addition to the station building planned for the company's traditional markets in transit, refuse, airport/taxi/shuttle, and local/regional trucking — activity that accounted for 63 station projects in 2011.
“Over time, we want to build more urban networks, and that's going to be important for medium-duty trucking, and that's going to be more CNG (compressed natural gas) than LNG,” he said. “A lot of trucks operating in urban environments will be CNG. By putting our anchor stations in airports and building around it like we've done in New York and California, we'll be able to beef up for medium-duty trucking.
“We have done CNG for a long time, and it's great fuel. For the right application, it's cheaper than LNG. We did the first seven trash trucks. Waste Management believed it should be LNG. We told them, ‘Don't do that.’ They did it for a while and came back. So for refuse applications and transit applications, it's CNG. For heavy-duty applications, most of it will be LNG.”
He said CNG loses up to 30% of fuel storage due to “heat of compression” during filling and requires extra storage to meet range requirements. A CNG truck can weigh up to 900 pounds more than an LNG truck with equal fuel storage. An LNG truck weighs about the same as a diesel-fueled counterpart with equal fuel storage.
CNG fuel storage is more expensive than LNG (about $20,000) due to higher cost of tanks, racks, and mounting systems, he said.
Fuel tanks
CNG storage tanks are bigger and bulkier than LNG, requiring space behind the cab and on the frame rails for mounting. He said that early anecdotal evidence is coming in that CNG tanks in heavy-duty road conditions are experiencing damage from road conditions and debris.
In July 2011, in a major alliance supporting the transition of trucking from diesel to natural gas fuel, Chesapeake Energy Corporation, the nation's second largest natural gas producer, committed an investment of $150 million in Clean Energy to help fund the development of ANGH. In September 2011, a group of international investors committed an additional $150 million, and in December 2011, another $150 million was invested, bringing the total investment in Clean Energy in 2011 for fueling station infrastructure development and other capital projects to $450 million.
Clean Energy is the largest provider of natural gas fuel for transportation in North America, with operations in CNG and LNG vehicle fueling, construction and operation of CNG and LNG fueling stations, biomethane production, vehicle conversion, and compressor technology.
Clean Energy fuels over 25,000 vehicles at 273 strategic locations across the United States and Canada, with a broad customer base in the refuse, transit, trucking, shuttle, taxi, airport, and municipal fleet markets.
Clean Energy del Peru, a joint venture, fuels vehicles and provides CNG to commercial customers in Peru. It owns and operates a landfill gas facility in Dallas, Texas, that produces renewable natural gas, or biomethane, for delivery in the nation's gas pipeline network, and plans to build a second facility in Michigan.
“Biomethane allows us to be renewable,” he said, “and you can make some money doing it.”
Clean Energy also owns and operates LNG production plants in Willis, Texas, and Boron, California, with combined capacity of 260,000 LNG gallons per day and that are designed to expand to 340,000 LNG gallons per day as demand increases. NorthStar, a wholly owned subsidiary, is a leader in LNG/LCNG (liquefied to compressed natural gas) fueling system technologies and station construction and operations. BAF Technologies Inc, a wholly owned subsidiary, is a leading provider of natural gas vehicle systems and conversions for taxis, vans, pick-up trucks and shuttle buses. IMW Industries, Ltd., a wholly owned subsidiary based in Canada, is a leading supplier of compressed natural gas equipment for vehicle fueling and industrial applications with more than 1200 installations in 24 countries.
“We have 45 people on the ground in Bangladesh, serving and fueling natural gas stations, and 100 in China,” he said. “We see the IMW business as a very good one. I think there's a lot of growth potential. We see that as a way for us maybe to play in the CNG business around the world where we may not be that well suited to do what we do in North America.”