IHS Cambridge Energy Research Associates (CERA) issued a report Thursday that said liquefied natural gas (LNG) is poised to penetrate long-haul heavy-duty trucking fleets as a result of current low natural gas prices resulting from the U.S. shale boom.
LNG heavy-duty trucks would recoup the initial additional investment required to use the fuel in three years without any government incentives, the IHS CERA report concluded. But it also found that there are hurdles to the transition, and the shift to natural gas by heavy-duty trucks will take time to complete.
The report said that unlike the case for light-duty vehicles, economics for heavy-duty truck applications are favorable for both vehicle owners and LNG suppliers. The heavy-duty vehicles travel set shipping routes over long distances, often racking up more than 120,000 miles per-vehicle annually.
With the long distances, fleet operators investing in the LNG-powered vehicles can generate large savings on fuel costs during a short period, and LNG fuel suppliers can reap the benefits of a high degree of regular traffic over the same routes and the large fuel volumes carried by long-haul vehicles, the report said.
While the economics are a primary incentive for LNG being used in the heavy-duty trucks, the report also pointed out that there are energy security and climate change benefits. "Switching to domestically produced natural gas reduces the need for oil imports, and the greenhouse gas intensity of natural gas is 7-15% less on a well-to-wheels basis," the report said.
Major fleet operators are likely to be the first to move to LNG use because their sheer scale makes it easier for them to adopt new technologies and manage the logistics, the report said, predicting these large operators will "gradually" purchase new LNG trucks during 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," said Rafael McDonald, IHS CERA director of global gas and LNG.
The report cited some well identified barriers, including lack of retail fueling locations, uncertainty surrounding future government support and the need for new training and logistics. Equipment supply and maintenance are also potential issues, including questions about the long-term durability of cryogenic fuel tanks. "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 vehicle collision," the report said.
IHS's Tiffany Groode, director of automotive long-term planning and scenarios service, said LNG for heavy-duty trucking "cracks the classic chicken and egg cycle that plagues new transportation technologies and fuels. The route is known; the mileage is high and the economics is the primary decision factor."
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