Low fuel prices hampering the switch to natural gas for trucks

Low diesel fuel prices are slowing the switch to natural gas by commercial and government fleet operators, even as many expect regulatory requirements to drive natural gas truck sales in the long run, according to a report by Trucks.com environmental expert John O’Dell. The report is posted online and was published ahead of the Green Truck Summit, the alternative fuels and advanced technology conference held annually in conjunction with NTEA’s Annual Work Truck Show in Indianapolis IN.

Trucks.com chief executive officer Jeremy Anwyl, who previously testified before Congress about fuel-efficiency mandates, cautioned that as long as government mandates push against the market, the results could be economically hazardous.

“This is the type of thing we would expect to see when government mandates are not aligned with market forces,” Anwyl said. “CNG (compressed natural gas) is being sidelined because it’s no longer the better financial option. Suddenly when diesel prices are low, spending $30,000 to $50,000 to convert trucks to natural gas eats into profit. We see a similar situation developing in the consumer marketplace, where low fuel prices have triggered a large shift to larger, less-fuel-efficient vehicles, while vehicle fuel efficiency is being mandated to increase.”

Even with the added cost of filtering diesel to reach emission standards, keeping fleets using diesel is more economically viable than investing in natural gas fleets or converters and the natural gas refueling stations to serve the vehicles, according to the report.

Despite short-term barriers, the report found, many fleet operators and technology developers continue to bet on the longer-term promise of alternatives to diesel.

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