OEMs Say Sales of Natural-Gas Trucks to Rise With Availability of New 12-Liter Engine Model

This story appears in the July 1 print edition of Transport Topics.

WASHINGTON — Truck makers said they expect the availability of new, bigger engines to spark significantly higher sales levels of natural gas-powered trucks in coming years.

They projected sales of natural gas-powered Class 8 vehicles would rise to about 4% of the total this year and 10% by 2016. That compares with almost 2% last year.

Managers from Daimler Trucks North America, Navistar Inc., Paccar Inc. and Volvo Group said the Cummins Westport ISX12 G, which is now available, will attract business from fleet managers who had been dissatisfied with the industry’s limited options. The managers made their comments during a panel discussion at the Alternative Clean Transportation Expo here last week.

“Natural gas is now a mature market. It’s really a mainstay of Kenworth’s product line,” said Andy Douglas, national sales manager of Kenworth Trucks, a product of Paccar. “We’re no longer pushing a boulder up a hill. We’re rockin’ and rollin,’ ” he said.

Several other natural-gas engines are  in development, and Westport Innovations sells a 15-liter power plant that uses diesel and LNG.

Jim Arthurs, president of Cummins Westport, also was on the panel with the truck makers and said thousands of the 12-liter engines will be sold this year. The company is a joint venture of Cummins Inc., which supplies the basic engines, and Westport Innovations, which adds fuel systems. Last year, the joint venture sold 6,800 9-liter ISL Gs, its only model at the time.

Cummins Westport has landed “serious customers,” including UPS Inc., Werner Enterprises, FedEx Corp., Frito-Lay North America and Wal-Mart Stores, Arthurs said.

UPS Inc. also displayed a few natural-gas trucks. Its chief operating officer, David Abney, said during a keynote address June 26 that his company’s U.S. parcel division will dedicate its entire heavy-duty truck buy to natural gas-powered engines next year.

“Natural gas will have an impact, it can’t be ignored,” said Navistar manager Nadine Haupt. Navistar is concentrating on its core diesel business now, as part of its major restructuring effort, but it still brought a TranStar tractor powered by a 12G to the 100,000-square-foot exhibit hall.

“We’re going at a slower pace now and are in more of a following role,” she said. Leasing companies could become major purchasers in the early stages, Haupt predicted, offering fleets a chance to test the vehicles without buying them.

Volvo manager Ed Saxman said his company is hedging its bets with the most diversified list of options: the 12G now for compressed natural gas, a Volvo-Westport model for liquefied natural gas next year and dimethyl ether, which can be synthesized from natural gas, in 2015.

DTNA manager Brian Daniels said that by 2020, the heavy-duty natural-gas market share could range between 10% and 25%, although he is only expecting 2% to 3% this year. DTNA’s Freightliner brand showed three natural-gas trucks at the expo.

Peterbilt Motors, also a part of Paccar, already has 2,000 orders for natural-gas trucks this year, said manager Bill Kahn, and 30% of the vehicles have specified 12G engines.

The appeal of CNG and LNG as truck fuel is that they can run about 50% of the cost of conventional diesel fuel. Natural gas also is abundantly available from domestic sources and does not need to be imported.

Heavy-duty natural-gas trucks are at least 50% more costly than vehicles with diesel power plants.

“Getting the cost down is critical,” said Erik Neandross, CEO of environmental consulting firm Gladstein, Neandross & Associates.

“We’ve seen this happen with refuse trucks using natural gas,” he said, adding that a $35,000 per truck premium would be a worthy goal, rather than the current $60,000 or more.

Arthurs said natural-gas truck costs will come down with time, volume and competition. But he said he’d prefer it not to be too quick. Having spent large sums to develop the ISX12 G, Cummins Westport now wants to get paid.

“We’ll charge for it for a while, but it will come down,” he said.

Last year’s options for natural-gas engines were the Cummins Westport 9-liter and the 15-liter model from Westport Innovations.

Kenworth’s Douglas said the new 12G should have an interesting side effect — putting a large number of ISL G-powered vehicles onto the used market.

Arthurs said the 9-liter should not be used for gross-vehicle-weight applications larger than 66,000 pounds, yet they often were, and that caused problems.

“The market will be tested this year with 9-liter models as the 12-liter is introduced,” he said. Even if U.S. demand for the used alternative-fuel trucks proves slack, Douglas said, there is good export potential.

Natural gas as a fuel is available in many countries, Douglas said, unlike ultra-low-sulfur diesel — the North American standard since 2006, which can be hard to find. Used ULSD trucks have limited export potential, he said.

LNG trucks are expected to provide most of the growth, the manufacturers said. Within the nation’s current natural-gas fleet, 90% of the trucks use CNG and 10% LNG, the manufacturers agree.

The ISX12 G is important for LNG expansion because the liquefied version of the fuel often is seen as better suited for longhaul shipments of 80,000-pound loads.

Shell Oil, Clean Energy Fuels Corp. and other LNG suppliers have been building out a network of LNG stations to supply larger trucks.