Making the business case for natural gas

AT today’s prices, an owner-operator who uses 20,000 gallons of diesel per year can save $1.50 per gallon by switching to natural gas and achieve a payoff in one year, according to Jim Harger, chief marketing officer for Clean Energy.

Harger detailed “The Business Case” for using natural gas in heavy-duty trucks during a presentation made April 30 during the National Tank Truck Carriers’ 65th Annual Conference in Austin, Texas.

“You can be a solution provider to your clients,” he said. “Many of the shippers you work for are looking for ways to meet sustainability objectives. You can provide them with at least a 25% reduction in carbon compared to running a diesel truck. And if you use biomethane from one of our landfills, you can get down to a 90% reduction by using 100% biomethane.

“A lot of tank fleets haul fuel for refiners. Refiners have to buy low-carbon footprints, not just in California, but nationwide. This truck you run on natural gas could mean an annuity, and those carbon credits could be sold back to your customers. It’s a way for you to gain additional business and further reduce capital payback.”

Different markets

He said compressed natural gas (CNG) is viewed as a light-duty and medium-duty fuel, with some heavy-duty use, primarily for transit and trash. But when a truck starts running in excess of 250 miles per day and is burning more than 50 gallons of fuel, that is viewed as more of a liquefied natural gas (LNG) business. He said 75 of Clean Energy’s 400 stations offer LNG while the rest provide just CNG.

Harger pointed that customers have various reasons for selecting natural gas. “There are some consumers in California that run about 10,000 to 15,000 NG vehicles fueling our public stations,” he said. “They’re not doing it because they’re environmentalists. They’re doing it because they get unrestricted access to the car-pool lane. When you’re in Los Angeles and save an hour a day, that is the equivalent to adding six weeks of vacation to your schedule.”

Clean Energy is the nation’s largest alternative transportation fuel provider, with over 700 fleet customers, 28,000 NG vehicles, and 400 stations. The company fuels 6,500 transit buses and operates in three dozen airports. He said it will build 50 stations this year strictly for the solid-waste industry.

He said that because the Port of Long Beach has a “terrible ozone issue and cancer rates are probably 70 times more than the acceptable average,” the company was able to attract Kenworth and Freightliner, who bought the first 100 trucks there.

“We had never had an OEM build a natural gas truck,” he said. “Today, there are 1,000 trucks in the port, we have six OEMs in the marketplace, and you can buy a natural gas truck from a local dealer all because of this local program, the Clean Air Action Plan, at the Ports of Long Beach and Los Angeles. We proved to the on-road trucking firms that natural gas can meet rigorous trucking duty cycles.”

Choices increasing

He said all six of the truck OEMs that are now part of the program—Freightliner, Kenworth, Peterbilt, International, Volvo, and Mack—offer an under-66,000-pound truck with a Cummins Westport spark-ignition 8.9-liter ISL G and an under-80,000-pound truck with a Cummins Westport 11.9-liter ISX12 G. Peterbilt and Kenworth offer an over-80,000-pound truck with a Westport HPDI (high-pressure direct injection) 15-liter engine, with a Cummins Westport ISX 15 G spark-ignition engine coming in 2015.

“Unlike the ISL G, the HPDI technology requires DPF (diesel particulate filter) and SCR (selective catalytic reduction),” he said. “You have a lot of weight and three systems. It’s a lot of technology, but if you’re running greater than 80,000 pounds, it’s a good fit.

“The ISX 12 G is certified up to 80,000 and available in 350 horsepower today and will be available with up to 400 hp. This is what we’re betting on. You will see a lot of infrastructure to support this product. You can pre-order one for delivery later in the year. A 13-liter natural gas engine from Volvo comes out next year. Cummins’ 15-liter ISX G engine will be available in 2015.”

He said the CNG/LNG issue creates a “lot of confusion for folks.”

With CNG, natural gas is delivered by a gas-company pipeline to the fueling station. The gas stream is dried, compressed, and stored at 4,500 psi and dispensed to the vehicle at 3,600 psi and at a similar speed to gasoline (5-8 gallons per minute).

“The faster you fill the vehicle, the more heat you gain with gas,” he said. “At a fast-fuel station, when the gas cools off inside the cylinder, you’re going to lose 22% of the available volume. You can go back and fill up the available space, but that’s going to affect hours of service.”

Gas cylinders

The natural gas is stored in cylinders onboard the vehicle. He said gallon-to-gallon, CNG fuel tank systems weigh four times as much as the LNG system.

“CNG time fill is the best application,” he said. “We fill as much as 160 trucks in a single night, all at the same time, because we do it over time. It’s complete fill because we can dissipate heat over time in a three- to six-hour fill period. It’s the lowest-cost installation and the best value.”

Fast fill involves high heat gain during fueling and over 20% loss of storage, with 10% loss at less than 500 psi tank pressure. It costs twice as much as LNG to provide the same amount of fueling lanes dispensing at the same speed.

“There’s a large capital investment—$5 million for four lanes dispensing at more than 10 gpm each, with one-half acre of land,” he said. “There are some complications with that. At the low end, Cummins has gone on record that they don’t want fuel storage to go below 500 pounds because the engine will be starved. So you’ll have less horsepower and torque if you go below 500 pounds, so that really becomes unusable gas. So in total, there’s a 30% loss with fast fill.”

 He said the reality of CNG stations is that the majority are not truck-friendly, with 95% of them designed for light duty. Most provide two to three gallons a minute, “and that’s not acceptable for a tractor-trailer.”

LNG environment

LNG works best in operations where the truck is running five to seven days a week.

“The reason is LNG is liquid stored in cryogenic tanks, and over time the gas will go from liquid and boil to vapor gas, and at 250 pounds, that would start venting off the tank,” he said. “You don’t want to lose fuel, so you have to manage fuel temperature. If you’re running a dump truck in a municipal district, you probably don’t want to be running LNG.”

Harger said Clean Energy super-cools the LNG at the plant that produces 100,000 gallons a day.

“We move it in our cryogenic tank trailers,” he said. “We deliver into vertical tanks at our stations, which hold up to 18,000 gallons. We dispense into customer vehicles at 12-15 gallons a minute.”

LNG fast-fill fuel stations can be expanded without utility constraints.

“It’s stored at two times the energy/volume of CNG, so vehicle fuel tanks don’t have to be as large,” he said. “With space where space is limited, this becomes more of an option.

“If you don’t use it, you lose it. It has a seven-day shelf life. If you park the vehicle and have a full tank of fuel, it will change liquid to gas. You as the operator will have to go out and start the engine, burn out that vapor, run it for three to four minutes and bring the pressure back down in the tank, and the clock starts again. But if you’re running every day and fueling, any vapor that will be in tank will be collapsed by fuel.”

Higher taxes

Harger said there is a higher federal excise tax and sometimes state excise tax, as well, for natural gas in comparison with diesel fuel.

“The federal government taxes us at 41 cents a diesel-gallon equivalent, compared to 24 cents for diesel,” he said “I appreciate you talking to your Congressman and Senator to get this put into balance. I don’t want a special privilege—I just want to pay my fair share. Then there are 26 states that we’re in one-on- one combat because they tax us on a liquid gallon. We pay a 70% penalty typically to diesel fuel. There are three states where a bill is on the governor’s desk for action. The worst state is Ohio, where we pay 46 cents a gallon compared to 26 for diesel.”

He gave these notes on natural gas fuel tank storage capacity and weight impact:

• LNG tanks have a vapor space that reduces effective storage volume in converting from nominal to effective.

• 1.7 gallons of LNG = 1 DGE = 1 gallon of diesel on an equivalent energy basis.

• CNG tanks have heat of compression during fueling and residual fuel at low pressure in converting from nominal to effective.

• Diesel weight includes diesel tank, equivalent amount of diesel fuel + DPF + SCR + urea storage with solution. DPF + SCR + urea Storage with solution is 550 pounds (industry standard).

He said that to solve the chicken-and-egg problem related to the development of natural gas fueling infrastructure, Clean Energy three years ago entered into a joint-venture partnership with Pilot Flying J to build exclusively on their truck stops. Last year, Clean Energy started building 70 fueling locations.

“The 12-liter engine was supposed to be out last summer, so it’s about a year late, but there is strong coverage of NG stations spread every 250 to 300 miles,” Harger said. “This year, we’re building 80 but infilling in metropolitan areas to address distribution centers and production plants. By year end, there should be 150 in our network. Within three years, there should be over 500 fueling stations nationwide, all LNG.”

To encourage fleets to order trucks with 12-liter nat gas engines and open America’s Natural Gas Highway (ANGH) network, Clean Energy is providing financial incentives to reduce the CNG/LNG truck cost. There is a 25-truck commitment per site at 40,000 gallons per month and a multi-year fuel commitment of three to five years that’s negotiable.

“The goal is provide a fleet a one-year-plus payback from fuel savings,” he said. ♦

Find the NTTC Annual Conference Report archive with articles from 2011 to present

TAGS: Green Trends
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