Natural Gas-Powered Vehicles Gain in Popularity/Long Term Potential is Bright Thanks to Low Shale Gas Prices

Natural gas vehicles (NGVs), that is cars and trucks that run on either compressed natural gas (CNG) or liquid natural gas (LNG), are already in use around the world, especially in municipal fleets and buses. The U.S. Department of energy reported more than 23 million NGVs worldwide and 175,000 in the U.S. by year-end 2022. A large percentage of all new public transit buses run on natural gas, and a high percentage of the roughly 8,000 new trash trucks sold annually in the U.S. run on CNG.

Natural gas is an attractive fuel for vehicles, not only because it enjoys a highly developed production and pipeline infrastructure, but also because it is economically and environmentally friendly. While initially costing substantially more per vehicle than standard fuel equivalents, natural gas engines save 30% or more on fuel costs, making the investment potentially very worthwhile over the long term, especially for commercial vehicles that drive long total distances each year. Emissions are significantly lower overall and have much lower concentrations of polluting particles and harmful gases. Recognizing the possible economic benefits, UPS has put natural gas trucks in service to haul its packages, including test trucks running on compressed natural gas, liquefied natural gas or propane. GE, FedEx, AT&T, PepsiCo, Budweiser and Waste Management have converted parts of their fleets to natural gas as well.

As for LNG, Shell Oil is helping to install LNG filling units at dozens of Travel Centers of America and Petro Stopping Center truck stop locations on Interstate highways in the U.S., aimed at the long-haul truck market. Shell is interested also in greater use of LNG for trains and ships in America.

Some proponents, including Clean Energy Fuels, a company that installs natural gas fueling stations, believe natural gas is a viable alternative for diesel fuel for semi-trailer trucks. Unlike switching to electric batteries or fuel cells, natural gas-powered trucks that travel primarily on major highways would not need as many new fueling stations. Clean Energy Fuels had more than 570 LNG and/or CNG fueling stations in 2022, across the U.S. and in British Columbia, Canada.

There are detractors who say that natural gas is as bad a pollutant as crude oil. However, the U.S. Department of Energy sponsored a “well-to-wheel” study which found that total emissions related to natural gas were 6% to 11% lower than gasoline. Another report by the nonprofit Center for Climate and Energy Solutions found that LNG reduces lifecycle carbon emissions by 13% compared with gasoline, and CNG lowers them by 29%.

Up until recently, cost was a factor when considering trucks powered by natural gas, since they were as much as $80,000 more expensive than diesel models. However, costs are dropping, and more filling stations were opening, making it possible for 18-wheel trucks to operate with one tank (as opposed to the two that used to be necessary for the long trips between refueling stations). New LNG heavy trucks are expected to go for $30,000 to $40,000 more than diesels, which can be made up in fuel costs savings within one year for heavily used trucks.

Truck manufacturers are taking notice of the trend. New natural gas engines are hitting the market such several engine options from Cummins Westport, Inc. Heavy duty truck manufacturers Navistar and Volvo are producing 13-liter and 14-liter LNG-fueled engines.

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Natural Gas-Powered Vehicles Gain in Popularity/Long Term Potential is Bright Thanks to Low Shale Gas Prices, Business and Industry Trends Analysis

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