When Saving The Planet Saves Money - Global Trade Magazine
  April 20th, 2015 | Written by

When Saving The Planet Saves Money

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HOW LNG AND CNG CARRIERS CAN BOOST YOUR BOTTOM LINE

Diesel was the fuel for trucking fleets in 1980, when United Parcel Service (UPS) launched the first “rolling laboratory.” To reduce emissions, UPS experimented with alternative fuels and technologies, and implemented environmental and economic solutions within fleet.

In 1989, decades before natural gas fueled boardroom conversations, UPS began running “rolling laboratories” of compressed natural gas (CNG) delivery vehicles. In 2000, the company expanded to liquefied natural gas (LNG) in their heavy duty fleet. Between 2013 and 2014, UPS added approximately 1,300 LNG tractors to a base of 113, and built 13 new refueling stations, supporting LNG fleet operations in more than 35 states.

Now, UPS has one of the largest privately held CNG fleets and LNG fleets in the nation. The rewards? Increased environmental benefits (there are more benefits than just carbon), approximately 25 percent to 35 percent lower fuel prices (as fuel costs vary) than imported petroleum, and a near divine reputation for global environmental stewardship.

Michael Britt, director of Maintenance and Engineering at UPS, says the UPS natural gas experience has been very positive. “We’re pleased with our performance and price point,” he says, though he adds UPS is not ready to rest. “It’s very important to continue to improve these products. … Often, the engineers are happy with the status quo. We want them to do more. We understand our responsibility of being good stewards to the planet and whenever we have an opportunity to move forward we do.”

When UPS implemented LNG “rolling laboratories” in 2000, Britt was the operator in charge of operations in California and UPS was a founding Interstate Clean Transportation Corridor (ICTC) fleet partner. UPS developed LNG solutions suited to ICTC’s clean transportation corridors and public LNG stations, connecting California, Las Vegas and Utah. “That corridor is very, very hot and there’s some snow in the north,” Britt says. “Despite the temperatures, we were able to have LNG.” What UPS learned, it shared. “We didn’t want to keep what we learned private. We wanted other companies to pick it up. The more (technology) sells, the cheaper it becomes,” Britt says.

UPS has decades of LNG lessons to share. A domestic fuel source is more secure. “If you have natural gas and your own pipeline, you’re in good shape in terms of fuel supply and the cost,” Britt says.

“You’re not affected by events in places like the Middle East.” Natural gas powered trucks also use far less oil. At first, “we were draining the oil at 10,000 miles,” he continues. But while diesel engines were black, natural gas engines were clean. Now, natural gas engines have a 60,000-mile oil interval and receive scheduled maintenance up to five times less frequently than diesel engines. LNG tractors have no route limits, as they are quieter than diesel.

And driving sustainability engages employees. On a recent trip to Hong Kong, Britt interviewed a driver. “He was just happy to be part of cleaning the environment. It was one of the first things he said.”
So if natural gas offers so many benefits, why doesn’t everyone convert?

Conversion to natural gas is a significantly larger up-front investment and payback can lag. “A natural-gas tractor used to be 40 percent and is now 30 percent higher (than diesel),” says Ike Brown, vice chairman and president, NFI Intermodal at NFI Industries, a supply-chain solutions provider and transportation company. “A diesel truck that costs $100,000 is $140,000 for natural gas.” Tanks cost $30,000 and though prices are falling as manufacturers emerge, Brown says “a natural-gas truck might never come down to the cost of a diesel truck.” Mileage is also key. “A truck doing less than 100,000 miles per year is not economically feasible,” Brown says. “Trucks doing 120,000 miles per year can expect payback in four to five years.”

Cost should not be a barrier, says Tony Kritzer, director of Investor Communications at Clean Energy Fuels Corp., a natural-gas provider operating 535-plus natural-gas stations. “There are no limitations based on the size of fleet. It’s a matter of willingness,” says Kritzer, who adds financing programs are available and the company’s “prices are engineered so payback comes in a reasonable amount of time.”

A trickier barrier is the lack of national natural-gas infrastructure. Operations in California, near Chicago and in Texas “have more options” than other areas of the country, Brown says. However, stations can be custom built. When NFI was without access to natural gas–despite running a project above the Marcellus Shale, a significant natural-gas deposit–Brown says “our partner had to build us a station.” Stations can be built on routes or in yards used daily for refuse companies and public transportation.

Infrastructure is coming along America’s Natural Gas Highway. Companies like Clean Energy Fuels are building LNG fueling stations along the Interstate Highway System of large metropolitan areas.

“While we’re a long way off from having natural gas on all four corners, we are building along dedicated trucking routes,” Kritzer says.

Clearly, natural gas is no longer experimental. As infrastructure and demand for sustainability and lower fuel prices grow, it may not even be “alternative” for long.

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