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Ontario Commits Up to $270M to Boost NatGas Truck Fleets

The province of Ontario in Canada at year-end committed $200-$270 million to clean transportation, including its commercial trucking industry, for technology investments that will reduce the carbon emissions from heavy-duty trucks, and natural gas vehicles (NGV) comprise one of the major focuses for the program.

It's part of the province's Climate Change Action Plan, which includes cap-and-trade. Timing and the conditions for the provincial government funds, however, are still undetermined.

"Third-party economic experts have confirmed that our plan is both the most cost effective and best at reducing emissions compared to carbon pricing alternatives," said a spokesperson for Ontario's Minister of Environment and Climate Change. "Reinvesting all cap-and-trade revenue will also allow us to support up to $8.3 billion in projects that fight climate change like home and business retrofits."

Ontario’s climate plan includes $125 million to $170 million for a green commercial vehicle program, and another $75-100 million towards a low-emission fueling network, budgeting a range $200 million to $270 million overall.

As a result, the Ontario Trucking Association (OTA) issued a report, "Natural Gas as an Alternative Fuel for Canadian Truck Fleets: A Roadmap Toward Implementation," in December as a means of helping government officials outline a heavy-duty NGV truck program.

OTA's report examines two broad areas where investment dollars are needed from Canadian fleets -- vehicle and station costs, along with ancillary costs. This is where the rubber meets the road as far as fleets making the transition to NGVs, according to the report.

"Ancillary expenses can make up to 10% of the overall cost of switching to NGVs, so without assistance and funding in these critical areas, fleets can easily become frustrated, making a successful conversion to natural gas less likely," OTA President Stephen Laskowski said. "Trucking companies are in the business of moving freight, we are not fuel transition experts."

Ontario provincial government assistance is critical to making the transition to more NGV trucks "seamless," Laskowski said.

OTA has called on the provincial government to fund up to $60,000 per NGV to offset the cost differential of a diesel engine. And OTA also is urging the Ontario government to provide carriers the same incentives that are being given to fuel suppliers to build stations, particularly fleet operators seeking to build their own fueling stations.

NGV truck and infrastructure costs for a 20-truck fleet are estimated at $3.4 million with ancillary costs of $325,000, according to an OTA analysis. The association is urging more analysis of the ancillary costs, such as fleet transition evaluation, facility upgrades, driver training and other change management expenses.

The provincial push for cleaner truck operations is an outgrowth of Ontario's five-year climate change action plan released last June, calling for assistance to businesses and individuals to transition to a low-carbon economy. Overall, the plan's specific programs and initiatives are estimated to have a five-year total cost of C$8.3 billion to reduce greenhouse gas emissions by 9.8 million tons by 2020, or 15% below 1990 levels.

Meanwhile, in the United States in late December, American Natural Gas (ANG) added to its network of NGV fueling stations with the purchase of Questar Fueling Co. and its 11 stations spread around six western states. Financial terms of the deal were not disclosed, but with the separate acquisition of Constellation CNG LLC also in December, ANG now owns and operates 40 fueling stations in 13 states.

The Questar compressed natural gas (CNG) stations include one in Arizona, two in Kansas, four in Texas, one each in Colorado and Utah, and two in California, one of which is currently under construction in Fontana, CA.

Noting that customer demand is prompting his firm's growth, ANG CEO Drew West said the company's growing national footprint has ANG "situated better than ever to support fleets in broader, more extensive adoptions of CNG. There was never a more important time to invest in alternative fuels."

ANG’s anchor tenants include some of the nation's largest fleets: Anheuser-Busch, Frito-Lay, Swift Transportation, and Central Freight Lines.

Separately, Landi Renzo USA reported that is has gained U.S. Environmental Protection Agency certification for its CNG version of Ford's 6.8-liter V-10 engine, and similar certification from the California Air Resources Board is expected in the first weeks of the new year. Landi Renzo is a qualified vehicle modifier for Ford products.

Landi's U.S. officials noted that the newly certified engine was developed by some of the world's leading alternative fuel engineers and is available exclusively through its operations as a heavy duty CNG system. Globally, Landi Renzo now distributes CNG and LPG/propane vehicles in more than 50 countries through 17 subsidiaries.

In the liquefied natural gas (LNG) transportation fuel space, globally the marine ferry sector is transitioning more to natural gas. Norwegian and French companies made announcements in December for new LNG ships in Europe.

Norway's LMG Marin indicated it plans to design the first LNG-fueled ship for use in the Mediterranean for Italian shipowner Caronte & Tourist. The LMG 290-DEG design vessel is to be 436 feet long (133 meters) with a capacity for 290 cars and up to 1,500 passengers. It is slated to be built at the Sefine Shipyard in Turkey.

France-based Brittany Ferries plans to have a new LNG-fueled cruise ferry. Brittany has a letter of intent for a 607-foot (185-meter) vessel built by Flensburger Schiffbau in Germany for a launch in 2019. The new LNG ship is slated to operate between Portsmouth in England and Caen in northwest France.

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