Pickens, truckers backing plan to convert heavy trucks to LNG
T. Boone Pickens has long been pushing his “Pickens Plan” to wean America off gasoline and diesel and onto natural gas.
in the NewsState of Logistics 2016: Pursue mutual benefit Outsourcing the Indirect Supply Chain Accraply acquires Harland Machine Systems of England Q&A: Abtin Hamidi, chief vice president and co-founder of CargoChief Diesel prices head down for third straight week, reports EIA More News
It’s clean. It’s abundant. It’s made in America. And it’s cheap.
So why isn’t everybody aboard the push to convert at least some of the 8.5 million Class 6, 7 and 8 tractors from diesel to compressed natural gas (CNG)?
That’s the answer that T. Boone Pickens wants to know. The 83-year-old Pickens, one of America’s richest men and a member of what Time magazine called one of the world’s 100 most influential people, has long been pushing his “Pickens Plan” to wean America off gasoline and diesel and onto natural gas.
As founding chairman of Dallas-based BP Capital Management and board member of Clean Energy Fuels, Pickens obviously has a personal stake in such a conversion. He stands to make millions.
Pickens is targeting the trucking industry as the place to make an immediate and lasting dent. The U.S. trucking industry is on track to spend in excess of $155 billion on fuel this year, which would be a record. If even as much as one-fourth of that diesel tab could be converted to an alternative fuel such as CNG, it would make a significant dent on this country’s reliance on unstable sources of important gasoline and diesel.
One of the reasons Pickens is pitching his CNG plan to trucking fleets is because of the infrastructure necessary to transport the fuel. It must be cooled to remain in a liquefied state. That means an entirely new network of transportation and distribution channels. It is easier to convert perhaps a couple of thousand of truck stop locations to handle CNG than it would be to convert a couple million mom-and-pop gasoline stations.
Just last month, Shell Oil and truck stop chain TravelCenters of America agreed to build and operate a nationwide natural gas fueling stations for heavy-duty trucks. The initial plan calls for at least 200 natural gas fueling lanes at 100 TA or Petro truck stops at exits along the Interstate Highway System. The locations will be selected to create “the infrastructure required to allow natural gas powered trucks to travel across the United States,” the companies said.
The Shell-TA plan is an important first step in the creation of a national network for CNG or liquified natural gas (LNG) distribution network for truckers. Such a network would remove what the industry had considered a major impediment to CNG or LNG as an alternative.
The Shell-TA agreement is not the only one in the works. Recently, Chesapeake Energy and Clean Energy began building a network of 150 natural gas stations along heavily traveled trucking corridors, many at Pilot-Flying J truck stops. They expect to have 70 refueling stations in 33 states up and running by the end of this year.
Truckers already have caught Pickens’ attention. Pickens recently attended the annual meeting of the Truckload Carriers of America (TCA) where he spoke to several hundred TL executives on the merits of his plan.
“I cannot get anyone in the trucking industry to sit down with me and say, `Boone, this is a bad idea, pal, and let me explain why.’ Because if somebody did, and it was better for America than this one, well, I would throw in (my weight) with them,” Pickens told the Arkansas Trucking Report recently.
Pickens said he already has met with President Barack Obama and his top political advisor David Axelrod in Reno, Nev., recently. He said he explained the advantages of trying to convert some of the nation’s 8.5 million trucks to CNG rather than the daunting task of converting 250 million automobiles.
“I told him not many people in Washington understand energy,” Pickens said, according to the Arkansas Trucking Report. “You can’t have a five-minute conversation there with anyone because they run out of what they know before the five minutes is up.”
But Pickens has clearly caught the president’s ear. The Obama administration is backing Pickens’ plan to provide a dollar-for-dollar tax incentive to help trucking companies convert from diesel-powered trucks to ones that can run on CNG.
In one of the view measures in Washington that appears to have bipartisan support, the Natural Gas Act (H.R. 1380) in the House and the Senate version (S. 1863) would also provide tax credits for converting and building natural gas fueling stations.
An amendment to the current pending highway bill was defeated recently in the Senate. The amendment actually passed with 51 votes, but that wasn’t enough to reach cloture. Some 45 Democratic senators and six Republicans voted for it. Opposition came mainly from big oil interests, who see their monopoly on fossil fuels eroding if CNG were to become popular in this country.
But the CNG ball is rolling elsewhere. Navistar, an industry leader in Class 8 trucks, recently announced it would start building a full line of heavy-duty trucks powered by natural gas. Major competitors Paccar (builders of the Peterbilt and Kenworth brands), Freightliner and Caterpillar have plans to do the same.
Fleet operators and forward-thinking third-party logistics companies are already toying with the idea of converting parts of their fleets to trucks powered by CNG. Central Freight Lines, an 89-year-old Texas-based LTL carrier, and Georgia-based Saddle Creek Logistics Services are among those carriers already testing or using natural gas-powered vehicles in their operations. Many waste haulers and local delivery companies (such as those belonging to utilities) already have converted some of their trucks to CNG or LNG.
The main attraction is price. Currently natural gas prices are nearly at a 20-year low. Currently, CNG prices cost about $2 a gallon, nearly half the nearly $4 cost of diesel. While no one can forecast what energy prices may do in the future, Pickens is supremely confident that whatever happens, CNG will remain a bargain compared to the cost of diesel.
“We have so much natural gas, we are going to see $5 diesel before we’ll see $3 natural gas,” Pickens told the Arkansas Trucking Report.
That’s the kind of math that is getting the attention of America’s trucking leaders. Stay tuned.
About the AuthorJohn D. Schulz John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. John is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis.
Subscribe to Logistics Management Magazine!Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!
2016 State of Logistics: Third-party logistics 2016 State of Logistics: Ocean freight View More From this Issue