Fleets can save well over $150,000 in fuel costs over the six-year life of a truck.

The electric vehicle market is turning into a financial nightmare for many of the automakers and suppliers that invested in the technology. Hybrids only comprise three percent of total new car sales, despite there being over 40 different models. And fuel cells are still more science lab experiment than mass-production reality.

But in a different part of the market, the green revolution looks a lot more promising. Commercial truck fleets in the United States are now keenly interested in converting their trucks to nun on natural gas or propane.

Thanks to the precipitous drop in prices for compressed natural gas (CNG) and liquid propane (LPG), fleets can save a fortune by switching over to these fuels. OEMs such as Freightliner and Thomas Built Bus have jumped into the market. International now offers the Transtar Class 8 semi (above) that runs on CNG. A cost calculator on the truck maker's website shows that a fleet can save well over $150,000 in fuel costs over the six-year life of a truck. For fleets that run their per-mile operating costs to the penny, this is a financial windfall.

Natural gas prices are typically $1.50/gallon-equivalent cheaper than gasoline and $2 cheaper than diesel.

Unfortunately, for now, LPG and CNG don't make much sense for American drivers. There is only one mass-produced passenger car available in the US, the Honda Civic Natural Gas. Plus, there simply aren't enough fueling stations to accommodate us. But it's a different story for truck fleets, especially those that constantly run the same routes and return to the same yard every night. Some fuel suppliers will even provide them with a fueling station for free, sort of like getting a phone for free, but having to pay for the minutes.

LPG used to sell well in the US. In 1980 there were about 600,000 vehicles that ran on propane. But as gasoline and diesel prices fell in the 1980s, the financial advantage disappeared and so did that market. But today's natural gas prices are typically $1.50 a gallon-equivalent cheaper than gasoline and $2 cheaper than diesel. And that leads proponents to predict there could be one million commercial vehicles running on natural gas far sooner than President Obama gets to his goal of one million electric vehicles on the road.

Ford says its sales of these vehicles have shot up 350 percent since 2009.

Ford, General Motors and Chrysler now offer commercial trucks that can run on these fuels. Ford is the most bullish, offering 10 different models. It charges $325 to add harder valves and valve seats so a truck engine can accommodate CNG or LPG, but a customer must spend an additional $10,000 or so to add the tanks and fuel system. Even so, for many fleets, which can easily put 100,000 miles on the odometer a year, the payback only takes two years. Ford says its sales of these vehicles, while still small, have shot up 350 percent since 2009.

Natural gas and propane in gaseous form hold less energy than gasoline or diesel, but by using liquid natural gas (LNG) or liquid propane, trucks can pack much more fuel into a tank. Also, new fuel injection systems inject the fuel into the engine in liquid form, not gaseous, providing similar power and driveability to gasoline or diesel. LPG has a 105 octane rating, CNG is at 130. So far, none of the OEMs are modifying their engines to take advantage of this octane boost, so there could be further efficiencies.

They emit 20 to 30 percent fewer greenhouse gasses than their gasoline or diesel counterparts.

Depending on the duty cycle, these trucks emit 20-30 percent fewer greenhouse gasses than their gasoline or diesel counterparts, so there is a significant environmental benefit to using them. Plus, they are mostly made of hydrogen, so they're a great first step towards building a hydrogen infrastructure.

The federal government offers a 50-cent tax credit for every gallon-equivalent used, plus up to $30,000 towards the cost of installing a fueling station. But the fleets still get the substantial savings cited above even without these credits, so there's little danger the market would collapse even if the federal incentives disappeared during any budget debate.

LPG, which is now extracted from natural gas, offers significantly lower initial costs.

So which is it going to be, CNG or LPG? LPG, which is now extracted from natural gas, offers significantly lower initial costs. Since it is stored at a relatively low 250-300 psi, the conversion cost per truck is several thousand dollars lower. And LPG fueling stations are significantly cheaper to install-about $50,000 compared to $400,000 for CNG, which is stored at 3,600 psi.

But big oil companies such as ExxonMobil and Shell are making major plays in CNG, and it enjoys marquee backing from big names like billionaire investor T. Boone Pickens. LPG, by comparison, is largely supported by smaller energy companies without the marquee names.

LPG is also the third most common fuel in the world, after gasoline and diesel.

Outside the US there's no comparison, LPG, commonly called autogas, is far more popular. It is the third most common fuel in the world, after gasoline and diesel. There are roughly 17 million vehicles running on LPG worldwide, mainly in Poland, Russia, South Korea, Turkey and Europe.

But fracking is an American innovation. This is where the prices have tumbled and are likely to stay under petroleum prices for decades to come. So we're likely to catch up quickly with the rest of the world because the savings are simply too big to ignore.


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  • 52 Comments
      Yo G Dawg
      • 1 Year Ago
      Let's talk Economics 101. Diesel is expensive at the moment because the demand by the fleet groups of shipping (boats, trucks, etc.) but the moment a decent portion flip to this 'cheaper' alternative, that price will inflate due to demand. It won't stay cheap for long if the demand continues to rise.
        • 1 Year Ago
        @Yo G Dawg
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          Tweaker
          • 1 Year Ago
          Nonsense. Diesel is taxed $.05/gallon more. No more, no less. Nor is diesel expensive now in relation to gasoline. It has been running 10-20% higher for years now.
      Smartalox
      • 1 Year Ago
      This is hardly news, PACCAR, (Peterbilt and Kenworth) have offered LNG powered class 8 transports for years. The cost of LNG Is about a third the cost of diesel. UPS has hundreds of them in daily service.
      Sacto1654
      • 1 Year Ago
      Also, compressed natural gas can come not only from gas wells sitting over oilfields, but also by tapping in garbage landfills (extracting out methane) and also by mining and processing methane clathrate (often known by the name "methane hydrate") from the ocean floor. Because compressed natural gas when used in an internal combustion engine has a tiny fraction of the pollutant output of gasoline-fueled or diesel-fueled engines, for the next 30 years natural gas will be a fast-growing commodity item. Indeed, don't be surprised that places that used to burn off petroleum gas like Nigeria and much of the Persian Gulf will now liquefy it and ship it to any place that wants it in a big way.
        Pandabear
        • 1 Year Ago
        @Sacto1654
        The problem with CNG is the tank must handle very high pressure and is therefore expensive, and dangerous in accident.
      paqza
      • 1 Year Ago
      While we're on the topic, what about biogas? Upgraded (filtered) biogas is essentially the same as CNG and isn't a fossil fuel. We need to be looking at taking advantage of organic waste (animal waste - already done, human waste, plant/vegetable waste/etc) to generate biogas to help offset the environmental impact of CNG. We can look at the up-front costs and ignore all externalities or actually look at the bigger picture. The goal should be cheap, plentiful, and closer to carbon-neutral. Shifting from gasoline/diesel to CNG/LPG has short-term cost-benefits only if you ignore the environmental impact. Source: I work with biogas plants and it's pretty f***ing awesome to be able to make your own fuel from animal ****/food waste.
      EZEE
      • 1 Year Ago
      And make the dag gum things aero, like in that other article...
      Gary Ivers
      • 1 Year Ago
      The average American does not know there are three grades of propane HD-5 - LPG. is here today and has been here for years ,big oil has tried to lull the public asleep with so called commerical grade propane that comes from refineries with very low and varyable BTU content, and internal contaminent.s. and then HD-10 , a blend of the two . The conversion industry has had some issues with performance or the lack there of,and the hardware has taken the blame .The propane and oil industry have kept there mouths shut on the fuel quality issue , knowing it's not the hardware , but the fuel quality that has caused the problems Good quality HD-5 propane runs and burns clean and big oil is exporting it at record levels and keeping the refinery slop here for us to have to use. The truth needs to be told about what is going on
      Ron Wagner
      • 1 Year Ago
      Natural gas is the future of energy. It is replacing dirty old coal plants, and dangerous expensive nuclear plants. It will fuel cars, trucks, vans, buses, locomotives, aircraft, ships, tractors, engines of all kinds. It costs far less. It will help keep us out of more useless wars, where we shed our blood and money. It is used to make many products. It will bring jobs and boost our economy. It lowers CO2 emissions, and pollution. Over 5,600 select natural gas story links on my free blog. An annotated and illustrated bibliography of live links, updated daily. The worldwide picture of natural gas. Read in 77 nations. ronwagnersrants . blogspot . com
        • 1 Year Ago
        @Ron Wagner
        [blocked]
      • 1 Year Ago
      [blocked]
        Neez
        • 1 Year Ago
        That is the dumbest thing i've ever heard. If you knew anything about trucking, you would know they are always on a time crunch. they get paid per delivery, drivers get paid per mile. The more deliveries you can make in a week, the more miles you can cover, the more money you make. Waiting for a battery to charge is not ideal. Not to mention the enourmous cost of battery packs. Trucks try to top the scales near 75,000-80,000 lbs will full fuel. If a 70kW battery pack weighs around 2,000lbs and only gets you 250miles in a (5000lb) TESLA S, then how big will the battery pack have to be to move an 80,000lb truck at least 250 miles? Pretty freakin heavy. So not only would you reduce the amount of cargo you can carry, but the range would be very limitted, and the battery costs a rediculous amount considering the costs to upgrade batteries on the TESLA S is like $30k to go an extra 100 miles. It's nowhere near feasible to have an electric semi. Now natural gas?? The technology is already here, it just needs the infrastructure to get it into the mainstream. This is not a pipe dream, it's very realistic.
        paqza
        • 1 Year Ago
        Let's be realistic here. These trucks are for long-distance hauling. It's one thing if you have a USPS truck serving a small community at low speeds and another entirely for these kinds of distances here. At this point in time, a fully EV semi isn't a feasible investment due to the cost of batteries, time to charge, maintenance, etc.
      David Peterson
      • 1 Year Ago
      This has been shown to be economically viable by fleet managers, even when the return on investment took years to realize. A net savings is just that - saving. When availability of product catches up to demand the next bottleneck will be infrastructure to fuel these vehicles. It would seem to me with prices at a historic low, someone smarter than me would step up and invest institutional amounts of money to reap the reward of a changing market. I can see a future with consumers able to fill their vehicles from the gas connection that fuels their water heater and furnace. Right now, a view from space shows so much light from flares burning excess gas in North Dakota that it looks brighter than L.A. I read somewhere that this waste would heat 500,000 homes. Imagine how many miles our collective fleet could drive if there were just infrastructure to utilize it. This is what government should be investing our tax dollars in - not subsidies for banks "too big to fail" or allowing billionaires to be taxed less than a minimum wage worker or building ego project stadiums for professional sports teams. But, what do I know? People aren't angry enough to actually do something about our collective dysfunction other than blame some other working stiff for making more money than me. Or immigration. Or unions. Or food stamps. Anything but the guy in the mirror. We get the government we deserve. Painfully true.
      Pandabear
      • 1 Year Ago
      Since when is LPG extracted from natural gas?
        edward.stallings
        • 1 Year Ago
        @Pandabear
        McElroy is a journalist. He does not understand science, physics, or economics. I've read his stuff for years. He is not to bright from any technical standpoint even though he has been an automotive magazine editor and immersed in the stuff for years.
        Marcopolo
        • 1 Year Ago
        @Pandabear
        @ Pandabear Since 1910 when Dr. Walter Snelling discovered the process.
          Marcopolo
          • 1 Year Ago
          @Marcopolo
          @ Pandabear Boy, there are at least 4 people with no knowledge of science ! Ok, I could give the very long explanation contained within The Encyclopaedia of Chemical Science, but maybe Wiki is easier ! " LPG is prepared by refining petroleum or "wet" natural gas, and is almost entirely derived from fossil fuel sources, being manufactured during the refining of petroleum (crude oil), or extracted from petroleum or natural gas streams as they emerge from the ground." In many countries there is huge LPG usage, reliant solely on LPG derived from natural gas. Just because something is not common in the US, doesn't mean it doesn't happen elsewhere ! New Zealand for instance, has very little oil, but powers most of it's taxi and commercial fleet on LPG extracted from abundant natural gas !
          Pandabear
          • 1 Year Ago
          @Marcopolo
          That's extracting LPG from gasoline, or oil, not natural gas. I know there's other process but I don't think most LPG are from natural gas but from crude oil instead.
      edward.stallings
      • 1 Year Ago
      "Plus, they are mostly made of hydrogen" - this is false. Methane has the highest percent hydrogen of any hydrocarbon fuel and it is approximately 25% hydrogen by weight. 25% is not mostly. It is also false to think that this would get us any closer to a hydrogen economy - not going to happen in the lifetime of anyone reading this because of the laws of physics. John leaves out the best part about trucks running these fuels compared to diesel - vastly reduced particulate emissions - real pollution. Anybody that considers CO2 a pollutant is not considering that we barely have enough for healthy plant life. If you have a greenhouse and want to increase yield, you burn propane in there to get some CO2 for the plants.
        axiomatik
        • 1 Year Ago
        @edward.stallings
        John Mcelroy's point about a hydrogen economy is wrong, but it can be said that methane is mostly hydrogen, depending on what you are counting. Measuring by weight is obviously stacked against hydrogen, being the lightest element on the periodic table. However, if counting the number of atoms, methane (CH4) does have a lot more hydrogen atoms than carbon atoms, outnumbering carbon 4:1. This is all a pointless exercise, though, because it has nothing to do with his hydrogen "point", which was incorrect.
      Robt
      • 1 Year Ago
      Payback is much quicker than two years. More like six to twelve months depending on mileage driven.
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