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42 THE JOURNAL OF COMMERCE www.joc.com JULY 21.2014 TRUCKING MARKET REPORT SPECIAL REPORT THE NEXT BIG technological leap in transporta- tion may not be package-dropping drones, or driverless taxicabs deployed by Uber or Lyft, but heavy-duty, natural gas-powered trucks that can go nose-to-nose with their diesel Class 8 counterparts. The list of trucking companies and vehicle lessors adding equipment powered by lique- fi ed or compressed natural gas is growing. C.R. England and Central Freight Lines recently expanded their LNG and CNG operations. Ryder System and Penske Truck Leasing are buying natural gas vehicles. Transportation operators are looking into expanded use of LNG and CNG in everything from package delivery vans to mega-container ships. But don't get too excited. Even at a more accelerated rate of development, it could be years before CNG or LNG bumps diesel from its prime spot at truck stop pumps. "How many years did it take diesel to replace gasoline (as trucking's primary fuel)? It took decades," James Welch, chairman and CEO of YRC Worldwide, said at SMC3's Connections 2014 conference in Naples, Florida, last month. Still, shifts happen, even if the pace at times seems glacial. "Diesel has become a much more effi cient and better product, but natural gas is the wave of the future," said Welch, whose long-haul company YRC Freight has tested LNG trucks in Southern California, the capital of natural gas fl eet conversion. Without question, natural gas is plentiful. Production increased 27 percent from 2007 through 2013, according to global research fi rm IHS, overwhelmingly because of the rapid development of shale gas through hydraulic fracturing. Consumption is increasing as well, especially in manufacturing and power gen- eration. In 2013, natural gas-fi red power plants accounted for more than 50 percent of new utility-scale capacity, with solar accounting for 22 percent and coal, 11 percent, according to the Energy Information Administration. Coal still accounted for 39 percent of total electricity pro- duction last year, and natural gas, 27 percent. "Given the scale of the change, it is appropri- ate to describe what is unfolding in the United States in terms of shale gas and tight oil as an 'unconventional revolution,' " Daniel Yergin, vice chairman of IHS, said in June 24 testi- mony before the Joint Economic Committee of Congress. Estimates of recoverable natural gas reserves have more than doubled since 2005, Yergin said. Thanks to the often controversial growth in hydraulic fracturing, or fracking, shale gas accounts for about 44 percent of total natural gas production today, compared with 2 percent a decade or more ago, he said. "The lower costs of energy brought about by this abundant growth in natural gas supply is helping to stimulate a manufacturing renaissance and improving the competitive position of the United States in the global economy and further stimulating job cre- ation in the United States," Yergin said. Good news, surely, but is the adoption of natural gas as a fuel for commercial vehicles approaching a tipping point? Not by a long shot. Momentum is building behind natural gas — especially CNG in less-than-truckload opera- tions — but high equipment and maintenance costs, the ongoing need to develop and test new engine technology and the lack of a nationwide fueling infrastructure for trucks are big speed bumps, if not roadblocks, in the route of the natural gas revolution. The potential for savings over diesel exists, but is often uncertain, because it depends on much more than the difference in fuel prices. The potential for new business looms large, too, as carbon-conscious shippers look for trucking operators with "green" fl eets. "The natural gas infrastructure is still being built out, and the stations are not always efficient," Michael J. DelBovo, president of Saddle Creek Logistics Services, said at the SMC3 meeting, where he spoke on a panel on "America's Natural Gas Highway." Saddle Creek is a pioneer in natural gas trucking. In less than three years, the Lake- land, Florida-based logistics, warehousing Fueling trucks with natural gas slashes emissions, but high costs keep CNG and LNG conversions in a lower gear JULY 21.2014 "Given the scale of the change, it is appropri- ate to describe what is unfolding in the United States in terms of shale gas and tight oil as an 'unconventional revolution,' " Daniel Yergin, vice chairman of IHS, said in June 24 testi- mony before the Joint Economic Committee of Congress. Estimates of recoverable natural gas reserves have more than doubled since 2005, Thanks to the often controversial growth in hydraulic fracturing, or fracking, shale gas accounts for about 44 percent of total natural gas production today, compared with 2 percent a decade or more ago, he said. "The lower costs of energy brought about by this abundant growth in natural gas supply is helping to stimulate a manufacturing renaissance and improving the competitive position of the United States in the global economy and further stimulating job cre- Good news, surely, but is the adoption of natural gas as a fuel for commercial vehicles approaching a tipping point? Not by a long shot. Momentum is building behind natural gas — especially CNG in less-than-truckload opera- tions — but high equipment and maintenance costs, the ongoing need to develop and test new engine technology and the lack of a nationwide fueling infrastructure for trucks are big speed bumps, if not roadblocks, in the route of the The potential for savings over diesel exists, but is often uncertain, because it depends on much more than the difference in fuel prices. The potential for new business looms large, too, as carbon-conscious shippers look for trucking "The natural gas infrastructure is still being built out, and the stations are not always efficient," Michael J. DelBovo, president of Saddle Creek Logistics Services, said at the SMC3 meeting, where he spoke on a panel on Saddle Creek is a pioneer in natural gas trucking. In less than three years, the Lake- land, Florida-based logistics, warehousing TRUCKING'S GREEN SPROUTS By William B. Cassidy