Natural gas is touted as a cheaper, cleaner-burning fuel than diesel and gasoline — and this has a growing number of medium-duty truck fleets (Class 4-7) considering making the switch to natural gas.
According to Navigant Research, global annual sales of medium- and heavy-duty natural gas trucks will more than double, from 170,200 in 2013 to 398,400 by 2022, primarily driven by fuel-cost savings for natural gas of almost $2 per gallon equivalent to diesel.
But, with an up-front investment from $20,000 to more than $50,000 per truck, what medium-duty applications make the most financial sense for natural gas conversions? What is involved with acquiring natural gas trucks? What should fleet managers expect with order logistics and delivery times? What are the factors to consider with fueling and service infrastructure?
Work Truck spoke with experts at Clean Energy, Freightliner, Cummins Westport, GE Capital Fleet Services, and Ryder to get their advice on these questions and more.
Auditing Medium-Duty Fleets
When identifying ideal candidates for natural gas conversion within a medium-duty fleet, fleet managers should look for applications suitable for natural gas, including regional haul and distribution, pick up and delivery, food and beverage, refuse, and utility, according to Robert Carrick, vocational sales manager — natural gas, Freightliner Trucks.
“One of the key drivers is fuel use,” said Jeff Campbell, director of marketing for Cummins Westport Inc., which manufactures dedicated natural gas engines as a factory-direct option for several truck and bus OEMs. “The higher the fuel use — in terms of both miles and engine hours — the better the business case.”
The converse is also true. The less fuel consumed, the harder it is to justify the investment, especially in the medium-duty market.
“Since medium-duty vehicles generally operate in lower mileage applications and consume far less fuel than Class 8 tractors, there are a limited number of medium-duty applications that generate a compelling business case for natural gas in the current market,” said Scott Perry, vice president of supply management for Ryder System, Inc, which operates roughly 400 natural-gas-powered vehicles, ranging from Class 4 trucks to Class 8 tractors. “But, we expect that advancements in natural gas technology in both the passenger car and heavy commercial markets will both have meaningful impacts on medium duty technologies, in terms of bringing down the cost over time.”
In other words, the lower the incremental cost for the natural gas system, the fewer miles or engine hours required to recoup the investment, which will make natural gas more financially feasible for a wider range of medium-duty applications. But, for now, natural gas is most practical for trucks that perform jobs requiring high-fuel consumption.
“The best applications for natural gas are those where you’re running 80,000 miles or more per year, such as regional hauls; you’re burning 10,000 to 15,000 or more gallons of fuel per truck per year,” Carrick said.
CNG or LNG?
Compressed natural gas (CNG) is natural gas that’s “compressed” to less than one percent of the volume it occupies at standard atmospheric pressure and stored at pressures as high as 3,600 psi. Natural gas that’s cooled to minus 260 degrees Fahrenheit becomes a liquid — that is, liquefied natural gas (LNG) — shrunk to a volume even lower than CNG, allowing for smaller fuel tanks for LNG to achieve an equivalent range to CNG.
But, which is better for medium-duty trucks? It depends on the specific job.
“LNG is best suited for high-mileage applications where the fuel is consumed more quickly so that the fleet is not exposed to fuel venting (a characteristic of LNG),” said Perry of Ryder. “LNG fueling infrastructure is more limited than CNG, which also has an impact on the applications that can be supported. CNG is much more widely available and provides a lower cost per diesel gallon equivalent and overall operating costs under current conditions.”
According to Carrick with Freightliner, CNG has gained greater traction than LNG in the medium-duty market.
“We have only sold a handful of LNG vehicles in straight-truck [medium-duty] configurations. The challenge with LNG in vocational markets is that the trucks are not constantly running like over-the-road tractors are. If LNG fuel is not used, you risk losing it.”
This is because LNG that sits in the tank will eventually get too warm, reverting back into a gas form and expanding, causing it to vent out of the tank. “So, in essence, LNG is a ‘use it or lose it’ fuel. You don’t have that issue with CNG,” said Carrick.
Considering Acquisition Logistics
With some truck manufacturers, natural gas fuel systems are available through the OEM and installed at the factory. In other cases, the OEM offers a gaseous prep engine, with a ship-thru option to an OEM-certified natural-gas-system installer to complete the conversion.
There are a handful of the considerations to determine when deciding which route is best — factory or third-party conversion.
“The availability of factory-converted natural gas trucks is limited and thus the fleet’s OEM [purchase] agreements will drive some of the decision,” said Ken Gillies, manager of truck purchasing and engineering for GE Capital Fleet Services. “Where possible, the factory-converted vehicles tend to increase customer confidence in the vehicle’s overall performance.
But, the aftermarket providers have done an excellent job in developing a product that integrates well with the particular vehicle, and they’ve paid close attention to keeping the look and feel of the conversion components and the installation practices very ‘OEM-like.’ ”
Then there is the impact on order-to-delivery, as well as everything involved in managing the conversion process.
“When the OEM provides the conversion in their build process, the actual production time difference is minimal,” said Gillies. “There can be additional time needed should the OEM be holding orders for a short period of time to enable running multiple units through — with an expectation of two weeks or less. For a conversion performed by a third-party, lead-time runs between two and six weeks. The primary determining factor is parts and schedule availability.”
Since medium-duty trucks will require further upfitting (for body and equipment installation), consider how the chassis will need to move between suppliers before it’s finally delivered.
Getting the truck from the conversion provider’s facility to the next stage upfitter can create logistical challenges and costs. “Any minimizing of distance will help control the total vehicle preparation cost,” Gillies added.
Creating a Fueling Strategy
Considering where and how the trucks will be fueled is the next important aspect to consider. Research should be done to find out if there is sufficient public infrastructure to support natural gas use, or whether it will be worth investing in an on-site fueling system.
As of press time, there are 672 public-access CNG stations and 51 LNG stations in the U.S., according to the Department of Energy’s Alternative Fuels Data Center.
But, for fleets where trucks “return-to-base” at the end of each shift, private onsite fueling might be a more practical option.
“When trucks come home every night, the drivers can park the vehicles in the yard, snap on the CNG nozzle hooked to a time-fill station, and then walk away,” said Peter Grace, senior vice president, sales and finance, Clean Energy Fuels Corporation, a provider of natural gas fuel for transportation in North America.
Time-fill systems are designed to fuel the vehicle over several hours, whereas fast-fill usually takes minutes. The difference between the two systems is essentially the compressor power. More power means faster fill times. But on the flip side, the more compressors required, the higher the cost of the fueling system. That’s why applications that allow for overnight fueling are usually more practical for CNG operations.
Overnight fueling is especially popular with the refuse industry because those vehicles are sitting for hours, so there is no labor time associated with fueling,” Grace said. “At whatever time the fleet manager has decided, the compressors kick on to fill up the vehicles. The advantage of doing that is you can put in a less expensive machine, less expensive compressors, and can fuel up the vehicles over several hours to take advantage of the dead time when the vehicles sit.”
Gillies with GE Capital estimated that a basic compressor and storage system for onsite fueling costs from $500,000 to more than $1 million.
Grace with Clean Energy projected similar cost numbers. “Whereas a large public access station is a $1.5 to $2 million deal, the smaller onsite stations you can get in the $600,000 to $700,000 range.”
But, there are other factors that impact fuel station costs that fleet managers might overlook, said Gillies. “Proximity to a supply line for natural gas must be understood. Then you need to know if the natural gas line is of adequate size and pressure to properly support the station. If the line isn’t up to the task, the cost of developing the necessary volume and pressure is typically the responsibility of the business that is building the dispensing station.”
Gillies continued: “Increasing pipeline capacity is a big (and potentially expensive) deal, so investigate carefully when assessing costs.”
Location is also critical when assessing whether to install fueling systems onsite and whether to make it CNG or LNG, said Grace. “In rural areas, there might not be natural gas infrastructure in place, so the natural gas would need to be trucked in — and that would likely need to be LNG, which can be trucked in and stored in an above ground tank on site.”
Maintaining the Vehicles
If the natural gas conversion was completed at the factory, then the OEM’s dealer network can support the service required. But, what about fleets that service their vehicles onsite?
“Fleet managers must look at what sort of modifications they need to do to their garage or service bays to ensure their shop complies with government standards for working with natural gas vehicles,” said Grace. “The ventilation has to meet certain standards and the heating systems have to be modified because if there is a gas leak, that can create a fire hazard.”
Grace elaborated: “If you have a diesel truck and there is a leak in the tank, the fuel goes down to the floor, right? In natural gas, it goes up because it’s lighter than air. So, if there is a valve leak, the gas is going to go up to the tallest part of the building. You need to look at that to make sure there is no open flame heater up there — and if there is, it has to be modified. And, you need to have methane detection devices that go off if there is a leak.”
Grace said Clean Energy conducts studies and works with clients to determine and make the shop modifications needed to be made for clients to meet standards, and ensure safety.