Despite the plunge in oil prices that has driven down the pump price of diesel, two of the three means of fueling trucks with compressed natural have remained competitive, according to Jon T. Gabrielsen, president and CEO of Atlanta-based J.T. Gabrielsen Consulting LLC.
“The unsung opportunity all long has been CNG,” said Gabrielsen, author of a report, “Alternatively Powered Commercial Vehicles: Global Markets,” just published by BCC Research.
The 350-page report discusses10 major alternative fuels for commercial vehicles used in North America, Latin America, Europe, the Middle East and Africa (EMEA), and the Asia-Pacific region. The fuels covered include CNG, LNG, LPG, DME, and Biodieel.
Even as diesel prices fell and stayed low, Gabrielsen said that CNG has stayed competitive for the entire time for those fleets that fuel centrally by compressing the fuel with their own compressors from their own natural gas utility-pipe connection as well as for those fleets that run on their own biogas sources— such as those in the waste collection landfill sector, and those engaged in agricultural animal-waste operations.
“Only retail CNG at truck stops became uncompetitive at the lowest [level of] oil and diesel prices,” he said, adding that that segment will “return to competitiveness the soonest, at the lower oil/diesel prices than for most other alternative fuels.”
Per Gabrielsen’s analysis in the BCC Research report, depending on a wide range of variables, such as annual driving distances and the additional initial vehicle costs to outfit for on-board CNG fuel storage and engine use of natural gas, the "added cost per diesel gallon equivalent (DGE) of CNG fuel is $0.36-0.48/DGE for a 3-year payback.
“So conservatively,” he stated, “any time that one can fuel a commercial vehicle with CNG for at least 50 cents per DGE less than with diesel fuel, then one will have at least a 3-year or shorter payback by having equipped [trucks] for CNG instead of diesel.”
Gabrielsen added that “even at the current low oil and diesel prices, self-compressed CNG provides very significant savings for commercial fleets. Even if one must purchase half of the annual CNG usage remotely at truck stop prices for CNG, one will still achieve a 3-year payback. And biogas is probably always a favorable proposition-- no matter how cheap diesel prices are.”
Originally posted on Trucking Info