Report: LNG viable fuel for long-haul trucking

June 27, 2012
ROI for heavy-duty LNG trucks would be three years without government incentives

Use of liquefied natural gas (LNG) to fuel heavy-duty trucks in the U.S. is more viable than use of the fuel for automobiles, according to a new IHS Cambridge Energy Research Associates (IHS CERA) report. LNG heavy trucks would recoup the initial costs of the investment in three years without government incentives, the report states.

Many heavy trucks — unlike cars — repeatedly travel set shipping routes over long distances each year. “These long distances allow truck operators to generate large savings on fuel costs over a short period of time while the high degree of regular traffic over the same routes and the high volume of fuel carried per truck makes supplying LNG economical for retailers,” the report says.

The nature of the heavy-duty trucking fleet makes it possible for operators to take advantage of retail LNG prices that were as low as $1.70 equivalent to a gallon of diesel in April of 2012 compared to diesel, which is expected to average $3.91 per gallon over the next five years.

The price differential makes the higher incremental costs of LNG heavy-duty vehicles — which range from $40,000 to $75,000 more than diesel-fueled trucks — economical, the report says.

Larger trucking fleets are most likely to be the first to deploy new LNG vehicles, since their larger scale gives them greater ability to adopt new technologies and manage operational logistics.

IHS says it expects major fleet operators to gradually increase their purchases of new LNG vehicles in small quantities over the next two to four years.

“Entry of natural-gas vehicles into the heavy-duty truck fleet will take some time — the change won’t happen overnight — but the motivations are there for both operators and suppliers to clear the hurdles that remain,” said Rafael McDonald, IHS CERA director, global gas & LNG. “Natural gas is a cheap and abundant fuel, and its use in the long-haul trucking industry provides a significant competitive advantage.”

 “Liquefied natural gas for heavy-duty trucking cracks the classic chicken-and-egg cycle that plagues new transportation technologies and fuels,” said Tiffany Groode, director of the IHS Automotive Long-Term Planning and Scenarios Service. “The route is known, the mileage is high and economics is the primary decision factor.” 

Though economics is the primary incentive, LNG adoption in heavy-duty trucking also touches on energy security and climate change benefits, the report says. Switching to domestically produced natural gas reduces the need for oil imports and the greenhouse gas intensity of natural gas is 7 to15% less on a well-to-wheels basis.

However, there are still hurdles to LNG adoption in heavy-duty trucking and these will likely temper the adoption of LNG in the near term, the report says.

The obstacles include a lack of LNG retail, uncertainty over future government support, and the need for new training and logistics.

Hardware maintenance, availability of replacement parts and the long-term durability of the cryogenic fuel tanks are also factors that need to be addressed, the report states. The ability of cryogenic tanks to maintain a vacuum for proper tank insulation is important both for minimizing venting and for safety in the event of a vehicle collision.

About the Author

Deborah Whistler

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