Presidents don’t usually cut ribbons at gas station openings, but the January opening of a liquefied natural gas (LNG) truck refueling stop on the busy I-15 corridor in Las Vegas was different enough to draw President Obama.
The station was the final one needed so LNG-powered semis could make the run from the port of Los Angeles all the way to Salt Lake City. Instead of diesel made from imported crude, Obama said, the trucks can be fueled with domestic natural gas.
The President is asking Congress to provide tax incentives for both LNG-powered trucks and refueling infrastructure to speed that transition, but addition of both vehicles and service stations is already accelerating with private venture funding.
The incentive is economics, with both capital and fuel costs shifting in LNG’s favor.
LNG fuel is running as much as $1.50 per gallon equivalent less than diesel, says Bruce Russell of Clean Energy Fuels, which built the Las Vegas station. For a trucker who buys 20,000 gallons of diesel a year, he says, that adds up quickly.
LNG-powered trucks have been available, but just two years ago they cost $65-80,000 more per rig than conventional diesels. Bipartisan bills to give tax breaks for the difference has not moved in Congress.
Truck Companies Climb Aboard
But Russell said the differential is shrinking as more truck and engine manufacturers offer LNG models, including Cummins-Westport, Kenworth, PACCAR-owned Peterbilt, Navistar, Freightliner and Caterpillar. Now, he said, with the wide fuel price spread, many models can pay back their price differential within the first year.
At the same time, Clean Energy Fuels has partnered with Pilot/Flying J truck stops to install refueling pumps at 150 locations along major Interstate trucking routes by the end of 2013, and plans at least 100 more, Russell said. New locations are opening “weekly,” he said.
“The goal is coast to coast and border to border,” he said, so LNG trucks can go anywhere diesel rigs do.
His company has been trying to expand natural gas use in transportation for a dozen years, he noted, but suddenly “it’s coming together very fast.” Until recently, most of Clean Energy Fuels’ work was providing compressed natural gas (CNG) refueling equipment for municipalities and corporations wanting to convert their medium- and light-duty trucks and buses.
A big step forward for CNG and LNG came when the ports of Los Angeles and Long Beach, trying to improve their air quality, decided to bar all but the newest diesel trucks from the port, phasing in restrictions over 2008-12. Literally thousands of trucks of all sizes service the port, and the decision created new demand for clean-fuel trucks.
Clean Energy Fuels installed two LNG refueling stations near the ports, and then began looking with other private and public entities at the routes out of the ports. For a station in Ontario, CA and the latest one in Las Vegas, Clean Energy Fuels worked with UPS, which is buying LNG rigs in part with stimulus funding channeled through the South Coast Air Quality Management District.
Clean Energy Fuels last year raised $450 million in capital, including from gas producer Chesapeake Energy, that will fund the venture with Pilot/Flying J.
Until now, LNG use has been concentrated in the Los Angeles and Houston areas, Russell said, but soon “we’re going to be all around the country,” focusing on the busiest trucking corridors.
The company says it plans LNG refueling on routes from Los Angeles to Dallas, TX; between Houston, San Antonio and Dallas; Houston to Chicago; Chicago to Atlanta; and along major Midwestern interstates.
Photo Caption: SF Recycling & Disposal, Inc. employee Arturo Vides monitors a liquid natural gas (LNG) hose as he fills a truck tank in San Francisco, California.