While most of America’s cars continue to run on conventional fuel, truckers around the country have displayed enough interest in the ongoing natural gas boom that a fleet of new trucks is being built expressly to take advantage of the momentum.
Consider this: four new natural gas-powered truck engines and several corresponding truck models are slated for release over the next three years, while the Honda (NYSE: HMC) Civic Natural Gas remains the sole such consumer car model in the U.S.
Clean Energy Fuels Corp. (NASDAQ: CLNE), for example, aims to blanket all major trucking routes with a network of 150 stations by the end of next year, while Shell (NYSE: RDS.A) and Travel Centers of America (NYSEAMEX: TA) have said that they will offer natural gas pumps at 100 truck stops across the country.
A big reason for this seismic shift is the price of diesel, which now hovers around $4 per gallon—a major contrast to prices of natural gas which, powered by the shale revolution, are at their lowest levels in a decade.
The startup cost is steep; natural gas-powered trucks cost almost $40,000 more to build. However, this isn’t much of a concern since companies can recoup that cost within two years via fuel savings. This is more of a problem for consumer markets, since automakers simply aren’t sure that consumers would be willing to cough up the initial price hike.
Cummins Westport, a joint venture between Cummins Inc. (NYSE: CMI) and Westport Innovations (NASDAQ: WPRT), manufactures engines that are used in Freightliner’s truck fleet. Freightliner Trucks is a division of Daimler Trucks North America. Cummins Westport has produced over 13,000 of its 8.9 liter natural gas engines between 2007 and now, and it hopes to release a 12-liter model in 2013 to take advantage of the rising demand.
Freightliner has sold more than 1,500 natural gas-powered trucks over the past four years, representing roughly 1 percent of overall sales.
Clean Energy has chosen to deliver fuel in the form of LNG, or liquefied natural gas, rather than CNG, or compressed natural gas. LNG trucks end up weighing almost the same as conventional diesel trucks, but CNG trucks weigh far more and have a much larger footprint in order to achieve comparable range. Moreover, LNG pumps operate almost as fast as do diesel pumps, but CNG pumps take much longer. And LNG stations cost about half as much to set up as do CNG stations.
Clean Energy is investing $225 million to set up 70 stations by the end of 2012, with another 80 scheduled for next year. These stations are all to be situated on long-haul routes.
