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Trucker Revolution: America Building Gas-Powered Convoy

Walter Russell Mead, Via Meadia

Looks like we’ve got ourselves a natural-gas powered convoy. Looking to capitalize on the country’s glut of cheap natural gas, many US companies are looking to convert their fleets to run on compressed natural gas (CNG) instead of gasoline. The WSJ reports:

About 5% of all heavy duty trucks sold next year will run on natural gas, up from around 1% this year, according to industry projections. Barriers to wider use are coming down, driven by the relatively low cost of compressed natural gas, or CNG, which sells for about $1.50 less a gallon than its equivalent in diesel fuel, which averaged about $3.87 a gallon this week. […]

The nation’s supply of relatively cheap natural gas is helping spur this shift. So are new natural gas engines that can power heavy-duty trucks that weigh up to 80,000 pounds. The first, a 12-liter Cummins Westport Inc. natural gas engine went on sale in July. Next year, Volvo AB, the Swedish heavy truck maker, will introduce a natural gas engine for its trucks.

Earlier this summer, respected energy analyst Edward Morse predicted CNG’s ascendance, but there are a handful of barriers standing in the way of widespread replacement of gasoline. Natural gas engines are significantly more expensive, and there aren’t a lot of companies offering them. Perhaps even more problematic is the underdeveloped network of CNG fueling stations—an issue that owners of electric cars are already well-acquainted with.

But for companies managing large fleets of trucks, CNG makes a lot of sense. They can eat the upfront cost in order to enjoy the long-term savings, and many already have their own central refueling stations that can be outfitted to pump different kinds of fuel. Car manufacturers are taking notice of these facts and bringing more CNG truck options to market.

America’s trucking industry is the latest sector to gas up on the shale boom.

Via Meadia, 31 October 2013