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Two Technologies Promise Profitability

Alternative fuels and platooning may be the future of transportation

Guy Rini, an electrical engineer who worked with Volvo, Mack, and Bendix’s commercial vehicle systems division, is currently president and owner of GTR Development LLC, based in Winchester, VA.

Rini says if natural gas supply and pricing continue to gain traction, upcharges for hybrid vehicles may prove too costly. “On the other hand, if all the drilling (for natural gas) across the United States becomes an environmental issue for other reasons, and we go back to recognizing that the best energy content is in diesel, ‘hybrid’ is a proven technology and fleets will start using it again.”

Buying a natural gas vehicle commands a substantial upcharge—from $25,000 to $50,000—due to the sophisticated design of engines and rather distinctive fueling systems. Liquefied natural gas trucks require insulated fuel tanks to hold their cryogenic fuel, while tanks for CNG must maintain very high pressure.

Most believe high costs, however, will decline as manufacturers experience economies of scale, with incentives making the return on investment increasingly attractive for buyers.

The best news is the cost of fuel: CNG costs about $2 a gallon compared to diesel at an average of $4 a gallon. A true direct comparison is not possible as natural gas vehicles use more fuel than diesel trucks, so industry sources speak of an “equivalent” price where CNG runs $1 or more per gallon less than diesel.

Yet therein lies the rub: CNG and LNG fueling stations can be hard to find in some regions. In some cases this is remedied by companies who partner up for fuel savings, as natural gas companies require a sufficient number of trucks and demand to build a station. If this threshold can be met, natural gas providers will install a station and even lock in a fuel price as part of the contract.

As Drew Cullen, vice president of fuels and environmental affairs at Penske Truck Leasing in Reading, PA, commented to Commercial Carrier Journal in May, “Fueling infrastructure improvements will continue as long as the price difference between diesel and natural gas provides enough savings to overcome the incremental costs of the vehicles—and fleets are able to realize the environmental benefits.”

Three Produce Transporters Talk Natural Gas
Testa Produce, Inc., which bought its first 10 CNG trucks in 2013, does not have enough natural gas vehicles for its own fueling station, but a nearby concrete company does, says Peter Testa, company president. The two companies worked out a deal where Testa gets the gas for a “locked-in” rate, which then helps the concrete company pay for its fueling station.

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