Booming natural gas production isn’t just giving the truck industry extra loads to haul. Low natural gas prices are providing trucking companies with an opportunity to begin shifting their fleets from diesel power to run on the cleaner and more stably priced alternative fuel.
The adoption of natural gas-powered trucks has been slow, however. FedEx and UPS have trumpeted adding compressed natural gas-powered trucks, but the share is miniscule compared to their total fleet. Willingness to invest in new equipment has slowed as the industry exercises capacity discipline, though the major hindrance is a lack of a national fueling system.
Now that fueling network is taking shape. Chesapeake Energy, a natural gas producer, will invest $150 million to help Clean Energy Fuels build 150 liquefied natural gas fueling stations along major national trucking corridors. The two-year build-out is the first phase of Chesapeake’s billion-dollar initiative to drive demand for the fuel.
Until that network goes online, the most activity is among regional carriers. Saddle Creek Transportation, for example, has 40 compressed natural gas-powered trucks, and will add 40 more by the end of the year and 20 more in early 2013.
Saddle Creek President Mike DelBovo said the Lakeland, Fla.-based company bought Freightliner models after it became clear diesel would be their biggest fleet cost, and the carrier needed new equipment. Through a 10-year partnership, Clean Energy has built fueling stations for the trucking company in Florida and Atlanta, and there are plans to add stations in Charlotte, N.C., and Dallas.
“I don’t know if we will ever buy another diesel engine,” DelBovo said. “The cost of fuel is a lot more predictable. We are able to offer (shippers) a more stable budgeting outlook and can give them back money from fuel surcharges.”
About 25 percent of Saddle Creek’s fleet will be compressed natural gas-powered once the last order of trucks arrive. The nine-liter engine trucks, capable of hauling up to 80,000 pounds, can drive more than 500 miles without needing a refueling. But he said the current size engines aren’t ideal for all regions, particularly those with higher grades, such as the Rocky Mountains and even the hilly areas of North Carolina.
Natural gas-powered engines are getting bigger, along with the fueling networks. With diesel at more than $4.10 a gallon and CNG under $2 a gallon, now’s the time for carriers to begin talking with their shippers about getting onboard.