Will Truckers Ditch Diesel?

[ALS]

Mr. Tech says in a couple of years, one in three Navistar trucks sold will burn natural gas. "This is not a subsidy-driven market."

Rebecca Smith - YAHOO - May 24, 2012

Rising diesel costs last year forced Waste Management Inc. to charge customers an extra $169 million, just to keep its garbage trucks fueled. This year, the nation's biggest trash hauler has a new defensive strategy: it is buying trucks that will run on cheaper natural gas.

In fact, the company says 80% of the trucks it purchases during the next five years will be fueled by natural gas. Though the vehicles cost about $30,000 more than conventional diesel models, each will save $27,000-a-year or more in fuel, says Eric Woods, head of fleet logistics for Waste Management. By 2017, the company expects to burn more natural gas than diesel.

"The economics favoring natural gas are overwhelming," says Scott Perry, a vice president at Ryder Systems Inc., one of the nation's largest truck-leasing companies and a transporter for the grocery, automotive, electronics and retail industries. ... [Read More]

[Jay]

"The economics favoring natural gas are overwhelming," says Scott Perry, a vice president at Ryder Systems Inc., one of the nation's largest truck-leasing companies and a transporter for the grocery, automotive, electronics and retail industries.

For now. If the electric utilities begin converting from coal to natural gas in any number, the price disparity between liquid and dry gas hydrocarbons will come into closer alignment--or even reverse. I'm glad it's not my job to speculate that natural gas prices will remain low.

That said, I wish more cars were available that are designed from the ground up to run on natural gas.

[chilimac02]

retrofitting a power-plant can't be cheap. That will inhibit a switch from quickly occurring or occurring en masse. My father is in the natural gas exploration business, which is also called the "oil business", or "energy business". Those companies have lots of Natural Gas which was drilled, then capped off and not connected to transport lines. If NG prices go up, then they will quickly add supply, so it will swing back down again. That's just how markets work.

Power plants will only invest money when it is cost effective, and producers will only make supply when it is financially worth it.

STILL, I'm happy more vehicles are going to run on NG. It has a distribution system in place, even delivered to many houses already. It doesn't have to be refined, and so is less resource intensive as far as producing a consumable product goes.

[Jay]

I found this interesting article on Zerohedge this morning about the financial aspects of NG drilling:

http://www.zerohedge.com/contributed...-gets-bloodier

The author contends that prices can't remain low because the drillers aren't making any money. Hence the supply will dry up just as demand surges. Would your father have any comment, Justin?

[50 mpg by 2012]

The potential market is enormous. The 3.2 million big rigs on U.S. roads today burn some 25 billion gallons of diesel annually. Almost 7 million single-unit trucks, such as UPS or FedEx Corp. trucks, consume another 10 billion gallons of diesel.

http://finance.yahoo.com/news/trucke...My0zNjYxLTliNz

At 8k gallons/year for the average big rig and 1.3k gallons/year for the average single-unit truck, there are only 2 very obvious options from a fuel cost point of view

better fuel economy ... probably approaching the limits

or

cheaper fuel ... but as Jay suggests ... will NG (compressed or liquid) pricing remain low as demand increases (domestically and worldwide), whether for transportation or power generation or thermal processes.

The only other alternative is reallocation of loads logistically relative to rail (not applicable in some applications).

[rossbro]

Since W M I owns most trash dumps, they should be using gas captured from the dumps. Near Myrtle Beach, the local county dump produces gas that fires boilers to make electricity.

[herm]

Coal-to-gas .. It would not be economically viable here due the low cost of gas, but in China it makes sense.. plus their train network is straining under the requirements to transport coal.

http://www.greencarcongress.com/2012...-20120521.html

"The Bluegas catalytic hydromethanation technology, developed and owned by GreatPoint Energy, directly converts coal into pipeline quality natural gas (99.5% pure methane). By comparison, syngas resulting from conventional gasification cannot be converted to pipeline quality natural gas without further processing.

By adding a catalyst to the coal gasification system, GreatPoint Energy is able to reduce the operating temperature in the gasifier, while directly promoting the reactions that yield methane (CH4). Under these mild catalytic conditions, less expensive reactor components are required, pipeline grade methane is produced, and very low cost carbon sources (such as lignites, sub-bituminous coals, tar sands, petroleum coke and petroleum resid) can be used as feedstocks.

Compared to more conventional approaches to gasification and SNG production, the bluegas process eliminates the need for an external water gas shift reactor, a methanation reactor, and air separation plant. GreatPoint says that its system produces natural gas at the lowest cost in the industry and that its water consumption is half of that of competing gasification systems.

Inherent in the technology is the ability to capture nearly all emissions, including carbon dioxide, which can be sequestered and used for oil production through Enhanced Oil Recovery. The technology is especially well suited for arid regions and where low-quality, concentrated coal resources are available, such as in Xinjiang."

[ItsNotAboutTheMoney]

Originally Posted by rossbro

Since W M I owns most trash dumps, they should be using gas captured from the dumps. Near Myrtle Beach, the local county dump produces gas that fires boilers to make electricity.

Precisely. WM have back-to-base fleets, partly using their own source, so they're less vulnerable to a price shift.

Municipalities can shift buses and other fleets to NG since their risk is reduced by potential pollution benefits and the ability to, ahem, shift cost burden.

But the large transportation fleets and independents have to be more cautious. But, if the fleets start moving over, I'd expect you'd see NG refueling spring up pretty rapidly along the main transportation routes.

[vangonebuy]

All garbage collection is already run in my town on Nat Gas.
About 4 years now.
http://www.smithtowninfo.com/news.cfm
mid page down.

MUCH quieter trucks.
2 stations in town to fill up. But not for the public. I asked.

The only thing I could see better is to teach the drivers to hypermile.
It still is, rev it up and hit the brakes at every house.

Nat gas is clearly a possibility for shorter run fleets.