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Ryder CEO: With Incentives or Not, NGVs Long-Term Fleet Fuel Solution

Natural gas is a long-term, sustainable solution for fueling commercial trucking fleets with or without federal incentives, Ryder Systems Inc. CEO Greg Swienton, said Thursday on the final day of the alternative clean transportation conference, otherwise known as the ACT Expo, in Long Beach, CA.

The infrastructure and vehicles will be developed to meet an increasing demand, particularly in the heavy-duty trucking sector, but how fast that happens is unclear, Swienton told the meeting of 2,500 conference attendees. Natural gas vehicles (NGV) -- either compressed natural gas (CNG) or liquefied natural gas -- are a good fit for many of Ryder's 14,000 customers who rent or lease trucks on a scale that runs from local mom-and-pop businesses to major national, long-haul fleets, he said.

Swienton said it is "lunacy" to continue to rely on mostly imported petroleum products when the United States has "vast and domestic" natural gas supplies.

"We at Ryder really believe that natural gas is a long-term, sustainable solution for commercial transportation," said Swienton, whose company helped raise the focus on NGVs when it ordered 202 heavy-duty NGV for its national fleet truck and equipment rentals last year (see Daily GPI, April 4, 2011). "This is why we are taking a long-term view."

Companies that have products to move around the nation have "another significant option over time" that Ryder has concluded is a "valuable one," said Swienton. He acknowledged that price volatility has been and will always be a factor. Regardless of the changes in gas prices, he thinks in the long run there is going to be "a meaningful differential" between natural gas prices and the cost of gasoline and diesel.

As for the needed fueling infrastructure, Swienton said he thinks it will "pick up" whether or not Congress passes legislation to create some sort of incentives for using natural gas more in the transportation sector. "I think we would all love if Congress could pass the NATGAS Act and get the infrastructure up, but I think political and economic realities are not going to let that happen. Nevertheless, over time, I think the infrastructure will be there because the economics will support it."

Ryder knows something about fleets and fueling with 200,000 vehicles, 14,000 customers and 800 maintenance shops, half of which supply diesel fuel to the trucks it rents and leases to customers. Ryder's annual diesel consumption amounts to 300 million gallons and it annually spends $1.3-1.5 billion for vehicles.

"The interest [in NGVs] among our customers now is really, really high, " Swienton said. "And they are showing this interest for a variety of reasons. That's why we believe natural gas is a long-term sustainable value proposition." And from Ryder's standpoint, he said the company business model is ideally suited and uniquely positioned to help us serve customers in looking at and select alternative fuel vehicles.

Ryder's customers and potential customers can try NGVs without having to take on a lot of risk, said Swienton, noting they can rent or lease NGVs to "test the technology without individually making a really big bet."

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