3 Ways To Play The Natural Gas Engine Rollout

Seaking Alpha ^ | Oct 27 2013 | Kapitall

[thackney]

The trucking industry is responsible for more than 68% of total freight moved in America, according to a report by the American Trucking Association. In 2012, 9.4 billion tons were transported by truck. Industry-wide total revenue generated was in excess of $642 billion.

In other words, a lot of economic trade is carried on the back of an 18-wheeler.

The problem is figuring out how to fuel the engines capable of hauling all that freight, while still ending up with a positive bottom line.

Profit margins for trucking companies average less than 5%, with fuel costs taking up more than half of operational expenses. Fluctuating diesel prices have a big impact on quarterly earnings reports and efforts have been made to improve fuel efficiency like using speed governors and fuel additives.

The advent of new technologies has brought to light the feasibility of natural gas engines. And this isn't a far-fetched concept. The natural gas engine infrastructure is being developed right now.

Truck stop chain TravelCenters of America (TA) has partnered with Shell (RDS.A) to add liquefied natural gas (LNG) fuel lanes at 100 different facilities across the United States. Clean Energy Fuels (CLNE) has partnered with private truck stop giant Pilot Flying J to embark on a mission to provide as many as 150 facilities with a natural gas solution.

As oil prices have recently been up around $100 a barrel and diesel prices have topped $4.00 a gallon on average nationwide, natural gas starts to look like an extremely cheap form of fuel.

And oil and natural gas prices are not exactly correlated, so a move in the price of one commodity won't necessarily impact the price of the other.

[DaveA37]

Why not develope an engine the would run on natural gas for cars and light trucks as well? Propane has been used for these type vehicles for some time so why not natural gas?

[DaveA37]

Why not develope an engine the would run on natural gas for cars and light trucks as well? Propane has been used for these type vehicles for some time so why not natural gas?

[thackney]

That has been done for quite a while.

The problem has been refueling. People don’t won’t to buy a natural gas vehicle without a reasonable way to refuel. Companies to don’t want to build natural gas fueling stations without a sufficient market of natural gas cars to pay for the investment and make a profit.

Honda has been selling a natural gas powered civic since 1996, if I remember correctly. Now that more stations are getting built, some other of the majors are coming out with natural gas fueling options.

Also, there is a manufacture that sells home refueling stations. They costs thousands and refill slowly overnight.

It is a growing market, but a slow growing one.

[Venturer]

Most large trucks today are Diesel, and they carry two fuel tanks that hold between 50 and 200 gallon each, so it is normal for a Semi to carry say 300 gallons of fuel when filled.

Now Diesel is not really explosive like gasoline, but it will and does burn fairly easily.

A Semi in an accident with two Natual Gas tanks holding 300 gallons of Natural gas would be a bit like a bomb IMO, and would probably take a haz mat endorsement on the CDL permit just to drive.

[wita]

CNG has been in use for years, just slow to grow. Till now the demand has not been there because of price and availability, of vehicles and fuel.

[thackney]

A Semi in an accident with two Natual Gas tanks holding 300 gallons of Natural gas would be a bit like a bomb IMO, and would probably take a haz mat endorsement on the CDL permit just to drive.

You are not correct. There has been quite a growth in using CNG as well as LNG for trucking. The risk is not as you imagine.

The LNG will not burn until it is heated up to a vapor, then diluted to a 5~15% concentration with the air. In the case of a leak, the gas begins to rise while it is being diluted since it is much lighter than air. So it is very difficult to get a significant accumulation on the ground in an ignitable concentrations. You can ignite the front edge of a leaking cloud, but it burns as it mixes with air and becomes a rising flame, it is not an explosion.

The CNG doesn't have to vaporize first, but needs the same dilution before ignition. The tanks are designed around 4~5,000 psi so they are difficult to rupture. They have been used on our roads for decades without the problems you imagine.

[eartick]

I am still hopeful for natural gas conversion to a diesel type product that has been produced in Lousiana Lake Charles area and now another plant being retrofitted in the Houston area.

Has proved to be commercially viable.

Believe this is the future.

[cicero2k]

It’s the LNG that’s relatively new. I watched them build a new LNG facility in Las Vegas across from the car rental center.

The trucking industry has yet to adopt LNG only vehicles as far as I know, probably ‘beta’ tesing in local deliveries in an area like Las Vegas.

With enough local delivery penetration and acceptance, will interstate distribution become widespread, in Las Vegas case up and down I-15.

[thackney]

I am still hopeful for natural gas conversion to a diesel type product

I am as well. Shell has been in that business for years with two major commercial operations outside the US. They are now discussing building a plant in the US. The economics are more difficult here than in Qatar and Malaysia where the other plants exist.

Shell announces Gulf Coast site for potential multibillion-dollar plant
http://freerepublic.com/focus/f-news/3070759/posts
9/24/2013

that has been produced in Lousiana Lake Charles area and now another plant being retrofitted in the Houston area.

Do you have a link to those? I am aware of a test/pilot plant built in around Houston and assembled farther out by Synfuels International. It has not proved to be economic for commercial production but they still do seminars and are trying to find investment to build outside the US.

Natural Gas to Gasoline [MIT Review]
http://freerepublic.com/focus/f-news/3059392/posts

[Bogey78O]

It takes a lot to bust a cng vehicle tank. These make the propane tanks you see on a grill look like a soda can.

[Venturer]

Well: It’s not the first time I have been wrong.

Thanks for straightening me out.

[thackney]

The trucking industry has yet to adopt LNG only vehicles as far as I know

UPS Announces Construction of 13 New LNG Stations
http://www.trucktrend.com/features/news/2013/163_news131009_ups_announces_construction_of_13_new_lng_stations/#ixzz2jDGKnmUZ
October 10, 2013

UPS ANNOUNCES LNG TRUCK FLEET EXPANSION POWERED BY WESTPORT HD SYSTEMS
http://www.westport.com/news/2011/ups-announces-lng-truck-fleet-expansion-powered-by-westport-hd-systems
FEBRUARY 22, 2011

More examples available. With Clean Energy Fuels building the nationwide LNG refueling on many of the major highways, this option has been opened up to far more trucking.

click map for more info

[lacrew]

This already exists...you can even convert your existing car to LNG for around $5k. There is one ‘open to the public’ refueling point in my city...at the gas company’s office. Buying fuel there is not ‘cash and carry’ though...its more similar to a subscription to the gas, where you prepay for a year’s worth....so its not nearly as convenient as gasoline.

There are some logistical issues dealing with refueling a high pressure vessel....is John Q. Public going to be able to do this, without killing themselves, etc. But it is done. A coworker’s brother lives in Portugal, and has been on LNG for years - apparently its relatively common there.

I do see great possibilities with this. Fleets especially. A local Frito Lay factory is about to build a fueling point for its trucks.

[thackney]

Keeping in mind that business predictions on the internet are worth what you paid for them...

http://www.nanalyze.com/2013/09/lng-trucking-with-clean-energy-fuels-clne/
September 25, 2013

While Goldman states that only 3% of all vehicles currently run on natural gas, their report estimates that only 7 years from, now 20-30% of all truck hauling fleets will run on natural gas. By 2018, the report estimates that 25% of all diesel truck stops will offer liquefied natural gas (LNG) re-fueling.

[PapaBear3625]

It’s the LNG that’s relatively new. I watched them build a new LNG facility in Las Vegas across from the car rental center. The trucking industry has yet to adopt LNG only vehicles as far as I know, probably ‘beta’ tesing in local deliveries in an area like Las Vegas.

In NG-mode, the engine still needs a little bit of diesel in the mix, so the truck needs a diesel tank. So all LNG trucks will be dual-fuel.

The conversion to LNG is a bit costly, so it makes the most sense to apply it to a commercial vehicle that uses a lot of fuel per day.

[mad_as_he$$]

In my area there is exactly ONE LNG refueling facility in a 100 mile radius. Diesel every mile. Easy choice.

[thackney]

Sorry, I forgot the graph in the last post, I won't keep adding more.

[cicero2k]

What is the approximate price ratio BTU/BTU for LNG/Diesel?

[thackney]

In NG-mode, the engine still needs a little bit of diesel in the mix, so the truck needs a diesel tank. So all LNG trucks will be dual-fuel.

That is only true for compression ignition engines. There are spark plug engines fueling on LNG with no diesel. Westport is a major supplier of these.