Natural gas gains ground for truckers
Increasing numbers making switch
It’s starting to get on people’s radar screens, it really is.
DON WILSON, AMTA
The upfront costs are substantial and refuelling is challenging, but an increasing number of trucking companies are considering making the switch to natural gas.
For several years now, natural gas producers have been trying to find new markets for a product that — because of the recent advent of shale gas exploration — is now cheap and abundant. To promote the use of the fuel for transportation, last year Shell Canada announced plans to start supplying heavy-duty trucks with liquefied natural gas (LNG) at its Flying J Truck Stops in Alberta. Encana has built a compressed naturalgas(CNG) station at Strathmore that not only fuels the company’s own fleet of natural gas-powered vehicles, but also recently opened to the public.
Both companies have touted natural gas as a cleaner, more affordable fuel option than diesel and gasoline, and it appears the message is starting to get through. Don Wilson, executive director of the Alberta Motor Transport Association, said for the first time, trucking companies are starting to seriously consider it as an option.
“I’m amazed at how, all of a sudden, it’s being talked about. Eighteen months ago, there was almost nothing,” said Wilson. “It’s starting to get on people’s radar screens, it really is.”
One of the companies talking about it is Calgary-based Trimac Transportation. Vice-president and CFO Scott Calver said Trimac has 20 LNG heavy-duty tractors, which it deploys in the southern United States. The U.S. is significantly ahead of Canada in terms of building up an infrastructure to support the use of natural gas as a transportation fuel — Shell, for example, will soon be adding LNG fuelling stations to 100 truck stops with Travel Centres of America, while Clean Energy Fuels Corp. has an agreement with Flying J in the United States to supply 150 stations by the end of 2013.
Calver said he believes natural gas is the fuel of the future. Not only is it cleaner burning than diesel, but it can also reduce fuel costs by up to 40 per cent.
But in addition to a shortage of fuelling stations, Calver said there are other constraints keeping Canadian companies from moving beyond the tire-kicking stage. While fuel may be cheaper, the upfront cost of an LNG tractor is about $90,000 more than a traditional diesel-powered one — in part because they are not yet being mass-produced. And LNG tractors are heavier, which causes problems for companies whose payloads are already approaching the legal highway limit.
In Quebec and B.C., provin- cial government incentives are available to help companies offset the purchase of the more expensive LNG tractors. Calver said a similar program in Alberta would speed the development of the sector here. But even more helpful, he said, would be support in terms of tax policy. Currently, LNG is exempt from the equivalent of a road diesel excise tax, but no one knows whether or not that will last.
“If we go and spend $90,000 on a tractor and the government announces the next day that fuel taxes are going to start on LNG, then our payback (on the cost of the tractor) that was going to take two years is now three to four years,” Calver said.
Wilson said he has already met with Transportation Minister Ric McIver to ask that the government hold off on adding any form of road tax to LNG fuel. He said within a couple of years, with the right amount of regulatory support, he expects to see significant movement toward natural gas by companies in Alberta.
Sam Shaw, vice-president of natural gas policy for Encana, agrees.
“Within five years, you’re going to see a market segment develop and be robust in Canada — not only because of the economics, not only because of the environmental side, but really because we have a domestic supply of natural gas,” Shaw said. “I think in the long term, (trucking) businesses are just going to say, ‘yes, this is the way to go.’ ”