Nat-Gas Progress Expected Despite Some Slowdowns

This story appears in the Feb. 17 print edition of Transport Topics.

Several suppliers of natural-gas fuel recently have slowed development plans, but industry officials said they believe truckers will continue to embrace the fuel as a diesel alternative.

Blu, a liquefied natural gas supplier, confirmed it has cut its staff by about 20% after scaling down fueling-station construction plans. Also, Clean Energy Fuels Corp., said it has not built its public LNG stations at the pace it projected two years ago.

In addition, Chesapeake Energy Corp. declined comment to Transport Topics on recent reports it has withdrawn from the natural-gas fueling business.

These developments follow an announcement by Cummins Inc. that it has “paused” work on its planned 15-liter natural-gas engine, and Westport Innovations’ move to discontinue its dual-fuel HD15 engine and instead supply its technology for truck makers’ future engines.

However, the Cummins Westport joint venture did launch the ISX12 G last year, seen as the engine that would open the path for more trucking operations to move to natural gas.

Ken Vieth, general manager at ACT Research Co., said those developments reflect a market still in its formative stages, rather than indicating a pullback in interest.

Trucking is “going to move to natural gas because of availability and cost,” he said. “But there are two questions — what kind of engine technology and what kind of fuel will be used?”

In the coming years, fleets will be weighing the benefits of spark-ignited versus compression injection engines and compressed versus liquefied natural gas, Vieth said.

Despite its recent cuts, Blu said it still plans to add 15 to 20 fueling locations this year to its 20 LNG stations already built in the United States.

“This year is a year of trying to let the trucks catch up to us,” Blu CEO Merritt Norton said in a recent interview with Reuters.

“As more natural-gas trucks come online, we anticipate ramping up our station build-out and operating a national network of fueling stations somewhere in the low hundreds by 2017,” the company said in a statement.

Clean Energy has built 115 stations on its interstate LNG fueling network for heavy-duty trucks, CEO Andrew Littlefair said on a Feb. 10 conference call. About 22 of those stations are open, he said.

That’s behind the pace the company announced two years ago, when it said it was aiming to complete 150 stations by the end of 2013.

Clean Energy acknowledged that it slowed down the build-out for that fueling network, citing the longer development and production time for the new 12-liter engine than was first announced.

Nevertheless, the company said it has enough stations in place to allow trucks to fuel with natural gas along most major U.S. corridors.

Including private facilities, Clean Energy owns and operates 317 CNG stations and 154 LNG stations, Littlefair said.

He predicted that orders for heavy-duty natural-gas trucks will climb upward of 10,000 in 2014, which would approach 5% of the total market.

Likewise, NGVAmerica President Richard Kolodziej said he doesn’t expect the halt in development for the ISX15 G or the departure of the Westport 15-liter to slow down the adoption of natural gas in trucking.

Despite recent fueling slowdowns, there are signs of momentum. Fueling provider Trillium CNG expects to expand its network to 77 public-access CNG stations across the country by the end of June, said William Zobel, vice president of business development.

“We’re expanding rapidly,” he said. In a meeting with Transport Topics staff last week, Zobel said the addition of fueling sites to fill in gaps on the map “will go a long way” toward converting the nation’s truck fleets to natural gas.

The market still needs a larger engine for some trucking applications, he said, but the ISX12 G addresses the needs of a large percentage of the marketplace.

Also last week, C.R. England Inc. announced a five-year LNG bulk-fueling agreement with Shell, and outlined plans to replace existing diesel trucks with LNG-powered trucks to service Southern California.

The carrier has ordered 10 Mack trucks equipped with the ISX12 G engine, which are expected to be placed in service in April, said Allen Nielsen, director of fuel. After running those tractors for about six months, C.R. England may order additional LNG trucks and could be operating up to 50 by early 2015.