DC Velocity - April 2012

technologyreview COMMENTARY

Trucking Associations (ATA). If a motor carrier were to use LNG-powered rigs, the price for the truck would climb at least another $50,000 per unit and maybe as much as $90,000, depending on the additional features.

Aside from a lower cost per gallon, LNG has another advantage. It’s considered to be a “green” fuel in that it emits less carbon dioxide than oil fuels. It also produces fewer pollutants and particulate emissions than other hydrocarbon fuels.

The biggest hurdle has been the lack of a nationwide infrastructure of fueling stations. Kedzie says it’s a classic “chicken and egg” situation. He notes that companies are reluctant to build out the infrastructure until enough truckers use LNG, and truckers aren’t willing to commit to using LNG without a refueling network in place.

In an effort to spur creation of an
LNG market, legislation has been
introduced in both houses of
Congress to provide tax credits for
LNG-powered vehicles as well as the
refueling infrastructure. Given the
fact that the credits would cost the
U.S. treasury $5 billion in lost rev-
enue at a time of a looming federal
deficit, the legislation faces an
uncertain future.

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CHARTING THE FUTURE

Although LNG’s proponents have been pushing for the government to create a market for LNG-powered fleets, it’s already there for shippers with fixed routes willing to sign a contract that incentivizes the carrier to deploy the vehicles. Dillon Transport Inc. of Burr Ridge, Ill., has begun offering just such a program in Texas and Ohio for Owens Corning, which generates enough steady business for Dillon to justify dedicated service.

Phil Crofts, director of marketing at Dillon, declined to provide specifics about the deal. However, he said Dillon was prepared to offer other shippers a fixed price to move goods on an LNG truck.

“We would feel comfortable offering a customer a guarantee that the fuel surcharge would not go up for a year,” he said.

Other truckers may be willing to offer a similar arrangement to shippers. Such an arrangement would give the shipper the assurance of having a firm line item in his transportation budget for one year.

“Once shippers understand this, they will be requesting the major carriers to do this and get a break on the fuel charge,” says Crofts.

In a volatile oil market with diesel fuel prices seemingly headed higher, there’s clearly a business case to be made for moving freight on LNG trucks. But shippers need not wait for the government to dole out subsidies. They can reach out to willing motor carriers, commit shipments to an LNG carrier in exchange for a contract guaranteeing a fixed rate, and save freight dollars right now. ;