NEW YORK - Companies like Waste Management Inc., the biggest trash hauler in the U.S., are combating high diesel prices by investing in trucks that run on natural gas.
The Wall Street Journal reports that 80% of Waste Management€™s trucks being purchased over the next five years will be fueled by natural gas, even though the vehicles cost about $30,000 more than conventional diesel models. That€™s because each natural gas truck will save $27,000 per year or more on fuel, according to Eric Woods, head of fleet logistics for the company. By 2017, Waste Management expects to be burning more natural gas than diesel fuel.
"The economics favoring natural gas are overwhelming," Scott Perry, a vice president at Ryder Systems Inc., told the newspaper.
Over the past year, about 45% of the price of natural gas has been cut thanks to the "shale gas revolution," notes the newspaper, adding that "vast amounts of natural gas in shale rock formations have been unlocked by improved drilling techniques, making the fuel cheap and plentiful" throughout the United States. In fact, the price gap between natural gas and diesel is unprecedented, which makes natural gas an attractive option to truckers and fleets.
However many fleet operators, notes the newspaper, are concerned about natural gas availably at fueling sites. And even though the U.S. "has loads of natural gas, adoption of natural gas vehicles has been spotty." The newspaper says that less than 0.1% of vehicles on U.S. roads today can burn natural gas.
Some also question about whether natural gas "really has legs as a transportation fuel." Greg Burns, chairman and CEO of PLS Logistics Services Inc. in Pittsburgh, told the newspaper that he polled 100 trucking companies asking about the future of natural gas. Eight in 10 respondents said natural gas, in its densest form as liquid natural gas (LNG), has the potential for highway use. Nearly a third said they are researching it for use in their own companies, but more than half (54%) said the current infrastructure is inadequate. "If you have a long-enough time frame, it's a pretty bullish picture," said Burns.
One disadvantage of natural gas, according to Noel Perry, principal at Transport Fundamentals Inc., is that it isn't as dense as diesel €" CNG is only 25% as dense and LNG is 60% as dense, meaning that trucks would need more or bigger tanks to go long distances, or refuel more often. "That's not a big deal for city buses or delivery trucks that go back to home base each night, where they can refuel. But it's a problem for trucks that drive unpredictable routes or venture out into the hinterland," wrote the newspaper.
The Future of Fuels Report
The U.S. Energy Information Administration (EIA) projects that liquid fuels will dominate the market at least through 2035, representing more than 96% of transportation BTUs in the United States by that time. The remaining 4% of energy will be provided by a mixture of non-liquid alternative fuels, including electricity, natural gas and hydrogen.