Trucks deliver nearly 70 percent of all freight in the U.S. and carry more than $700 billion worth of goods across the country each year.
When oil prices spike, trucking companies pass on that cost to manufacturers and distributors in the form of surcharges, and retailers in turn pass it on to consumers as higher commodities prices. If the price hike is steep enough, consumers cut back on spending and manufacturers cut back on production because of lower demand, and thus a cycle of contraction begins.
University of Maryland economics professor Peter Morici predicted last year that a spike in U.S. gas prices could cost the economy 600,000 jobs — the last thing it needs while it’s finally starting to show signs of recovery.
Fortunately, consumers didn’t tighten their belts when gas prices increased earlier this year, and commodity prices are expected to fall along with prices at the pump. However, with the Middle East still unstable and China surpassing the U.S. in energy consumption, America remains vulnerable to future oil price hikes.
The obvious solution is to replace oil with a cheaper domestic source of energy. The idea isn’t new. The 1992 Energy Policy Act established the goal of having alternative fuels vehicles compose at least 10 percent of U.S. transportation by 2000, and at least 30 percent by 2010. However, last year, alternate fuels consumed in AFVs accounted for only 1 percent of the total consumption of petroleum fuels.
The good news is that the number of natural gas vehicles is expected to grow significantly in the next few years thanks to the abundant and cheap source of natural gas provided by the U.S. shale plays, which Pennsylvania is at the heart of. In anticipation of that growth spurt, compressed natural gas and liquid natural gas stations are sprouting up in the commonwealth and across the nation.
Build it and they will come
Clean Energy is the country’s largest provider of natural gas fuel for transportation. It builds, operates and maintains fueling stations that compress and dispense CNG for light- and medium-duty vehicles and dispense LNG for heavy, long haul trucks.
Harry Gladfelter is the business development manager at Clean Energy Fuels Corp., a subsidiary of Clean Energy in Reading, Pa. He and his team are working on a project they call “America’s Natural Gas Highway.”
“We teamed up with Flying J Truck Stops, and we received $300 million from Chesapeake Energy and BP Capital and another $150 million in private equity to build 150 LNG stations across the United States, roughly about 250 to 300 miles apart,” said Gladfelter.
There are 68 Flying J Truck Stops in Pennsylvania, three of which are slated to dispense LNG in the near future.
The first is at the Carlisle exchange where Route 81 crosses the Pennsylvania Turnpike. The second will be in Mill Hall, east of I-80, and a third in the southern part of the state where Route 70 connects with the turnpike.
While light- and medium-duty trucks can use CNG, heavier, long haul trucks need to carry more fuel because they travel farther (500 to 600 miles per day), have larger engines that use up more fuel, and are on the road longer periods between stops. Liquefying the natural gas allows more fuel to be stored in a smaller space.
The stumbling block for the development of LNG stations was that until recently, the largest natural gas engine available was an 8.9-liter engine, which is suitable for school buses, garbage trucks and medium- and heavy-duty trucks and tractors, but not powerful enough for an 80,000-pound long haul tractor-trailer.
“Cummins Westport has built and is now testing a 12-liter engine that will allow those 80,000 lb. trucks to run on natural gas,” said Gladfelter.
“The company plans to release the engine in the first quarter of next year, which will allow long haul fleet owners to convert to natural gas”.
That engine will be followed by a 15-liter heavy-duty, spark-ignited natural gas engine, which is similar to a gasoline engine. Other natural gas engines work like diesel engines, which are compression ignited. In those types of bi-fuel engines, you lose some of the cost savings, because they need diesel fuel to start the engine.
Fueling the Future
Chesapeake Energy, one of the investors in “America’s Natural Gas Highway,” plans to convert its own fleet of 5,500 vehicles to natural gas by 2014 as part of the company’s “Fueling the Future Initiative.”
“At this point we have over 1,500 vehicles running on natural gas including Chevy Tahoes and Silverados,” said Will Freeman, coordinator of NGV market development at Chesapeake Energy in Harrisburg.
“Since Ford, GM and Dodge are all making bi-fuel vehicles now, it’s possible that we’ll be purchasing those vehicles in the future rather than buying conversion kits.”
Chesapeake is currently operating NGVs in the Cannonsburg area and also near Wheeling, W.Va.
“It’s important that we have CNG stations along the highways near those operations, and we’re now in the process getting those built by contributing funds to Clean Energy and other CNG station developers,” said Freeman.
Anticipating the increase in fleet conversions, Dandy Mini Mart, which has more than 60 convenience stores in Pennsylvania and New York, plans to construct and operate three CNG stations in the Twin Tiers. Drivers with CNG vehicles will be able to fill up for as low as $1.65 a gallon.
The first CNG station is expected to open in Towanda (Bradford County) around Aug. 1. It will also serve as the CNG refueling station for Chesapeake Energy’s NGV fleet and for Endless Mountains Transit Authority CNG buses. The estimated cost for the CNG equipment and installation for the Dandy Towanda station is around $1.25 million.
The second Dandy CNG station will be built in Athens, N.Y., at the end of September and a third will follow in Elmira, N.Y., 45 miles north of Wellsboro.
“We’re trying to increase the demand for CNG vehicles by supporting the market for CNG infrastructure, so we can help push the price down so more CNG fueling stations can be built to help the country move toward a future where natural gas is routinely used for transportation,” said Freeman.