Trucking companies consider conversion to natural gas
Trucking firms in northern Nevada are mulling a possible conversion of their fleets to natural gas.
With cost of diesel fuel hovering near $4 a gallon, and natural gas at around $3 per gallon, several northern Nevada trucking firms are taking a closer look at the lower-cost fuel alternative.
Brad Meyer, president of NevCal Trucking in Sparks, says within the next decade it could be common to find regional transportation companies that have entire fleets powered by natural gas. The benefit, he says, is that companies can hedge against the volatility of diesel fuel prices.
But the infrastructure to deliver natural gas isn’t as widespread as diesel fueling stations, and that fact alone currently prohibits long-haul truckers from using natural gas, trucking industry experts say.
As diesel fuel prices edged north of $3.50 a gallon, trucking firms added fuel surcharges to their invoices to offset the rising costs of fuel. Customers by and large accepted fuel surcharges as the cost of doing business, Meyer says. The real concern is the volatility in diesel fuel prices that affects revenue and budgeting.
“It fluctuates so much and is such a variable. If you are moving cargo from one day to next that price can change and really affect the bottom line.”
Natural gas prices have declined with advances in hydraulic fracturing processes used to extract gas from shale buried miles below the earth’s surface, and truckers aren’t alone among northern Nevada businesses that want to take advantage of falling gas prices. Barrick North America, for instance, last year tapped the Ruby Pipeline that crosses northern Nevada with a 26.5-mile spur to bring natural gas to its Goldstrike Mine northwest of Elko.
But for the trucking industry, there simply aren’t yet enough retail fueling stations available for the conversion make sense, Meyer says.
“It just wouldn’t work right now — but that is definitely the future. I see the day when whole fleets are powered on natural gas. It may be 10 years from now, but there is definitely that day.”
Natural gas isn’t nearly as dense as diesel fuel, so trucks will require more tanks to store one of the two types of natural gas — compressed natural gas (CNG), or super-chilled natural gas (LNG). CNG is only 25 percent as dense as diesel fuel, and LNG is about 60 percent as dense.
Cost per truck is roughly $30,000 to make the switch, with the installation of large storage tanks accounting for much of the expense. Meyer expects those costs to drop as more manufacturers begin making storage tanks for transport vehicles.
The first-wave of natural gas powered rigs is expected to be with fleets that run local routes and can return to a home base for easy fueling.
Jack Colpo, a sales representative for Peterbilt Truck Parts and Equipment Co. in Sparks, expects demand for trucks powered by natural gas to rise. Currently, he says, all tractor sales are for diesel-powered models. Colpo notes that the costs for the engines are roughly similar, but the extra tanks push costs for natural gas vehicles much higher.
“The tankage has to be installed, and the manufacturer of the tractor does not do that,” Cople says. “(The industry) is in the process of changing over — manufacturers have to walk before they run. This year they will start offering tankage.”
Cople doesn’t expect natural gas-powered rigs to ever fully replace diesel-powered tractors, but they will become a viable alternative in coming years. Companies that already have made the switch, he says, include Walmart and UPS.
“A lot of major fleets have made significant investments in natural gas vehicles,” Cople says.
Clint Capurro, owner of Capurro Trucking of Sparks, says natural gas not only provides less-expensive fueling, but provides tax savings as well. Capurro expects his fleet in the future would be a mix of converted trucks and new tractors made to run on natural gas.
“It is clean-burning, there is a lot of it available, and the price is cheap to buy it,” he says.
In addition, Argentum Law, the sister law firm of communications firm Argentum Partners, recently welcomed attorney Stacie Truesdell Michaels to its Las Vegas office.