Natural Gas May Help Lower Fuel Cost For Trucking, ATA’s Moskowitz Says

LAS VEGAS — The abundance of natural gas in the United States provides a significant opportunity for trucking to lower fuel costs and carbon emissions, although several significant hurdles remain, an official with American Trucking Associations said.

Rich Moskowitz, ATA’s regulatory affairs counsel, speaking at the OPIS Fleet Fueling Conference, also said that while the federal government’s heavy-duty fuel efficiency rule will further increase the cost of new trucks, it will offer fleets spec’ing flexibility and savings on fuel expenses.

“Fueling infrastructure remains a significant hurdle to [natural gas] being used widely by the trucking industry,” he said.

Besides the emissions benefits, natural gas is $1.50 to $2 a gallon cheaper than diesel on a BTU-equivalent basis, making it extra attractive for truckers, Moskowitz said.

He praised natural gas investor T. Boone Pickens for bringing attention and investment dollars to natural gas, but said that having only one fueling station every 200 miles along key freight corridors would not be sufficient in the long run.

Moskowitz stressed the need for more competition, noting that at almost every interstate exit there are multiple choices to fill gasoline and diesel tanks.

“We need to make sure other people are getting into the refueling game. If [Pickens] is the only game in town,” prices may not remain as low as advertised.

Weight penalties because of heavier tanks for natural gas, and higher equipment and maintenance-related costs also need to be factored into the overall equation when comparing natural gas with diesel, he said, but the 200-year domestic supply of natural gas makes it too attractive to ignore.

Meanwhile, the federal fuel efficiency rule will require a 3% gain by 2014 and 6% boost by 2017. Though price tags of new trucks will increase by potentially as much as $8,000, a return on investment can be reached within two years, based on government estimates at $3 a gallon diesel, Moskowitz said.

For fleets, another positive aspect of the rule is that truck manufacturers are the ones that have to meet the standard, which can be met through a wide range of existing options such as improved aerodynamics, efficient tires, anti-idling devices, speed governors and other devices.

“The good news is the end user will be able to spec’ out the best options for their needs. You will have the freedom to determine which options work best for you,” Moskowitz said.

During his presentation, Moskowitz expressed disappointment both with the Obama administration’s apparent efforts to slow oil production in the Gulf of Mexico and gridlock in Congress.

He said the administration’s slowdown in permits and lack of lease sales means there will be an estimated 400,000 fewer barrels of production a day coming from the Gulf in 2012 than in 2010, prior to the BP oil spill.

He also disagreed with measures aimed at making the refinery permit process more difficult and the slow approval process on the Keystone pipeline aimed at transporting oil into the United States from Canada. The comment period on the pipeline plan closes Oct. 7 and he encouraged attendees to ensure their voices are heard.

His frustration was not only aimed at the Obama administration. He chided Republicans in Congress, saying that while the “Drill, Baby, Drill” motto is important, they should recognize it is not the entire solution. Likewise, Democrats should not only be interested in conservation policies.

“We also need to develop alternatives,” he said. “The bottom line is that we need to do it all.”