December 3, 2012 10:00 AM, EST
Trends’ Panel Cites NatGas Transitional Concerns

ARLINGTON, Va. — Future trends present risks for the trucking industry as it contemplates a transition toward more natural gas use, but there are also risks if the transition is not accelerated, said a trio of experts who spoke at American Trucking Associations’ Summit on Natural Gas in Trucking here Friday.

ATA Chairman Michael Card, who is also president of Combined Transport Inc., said at the beginning of the summit: “We are truly at the cusp of a potential revolutionary change in the trucking industry” as it moves toward more use of natural gas as a transport fuel.

Railroad locomotives powered by natural gas are expected to debut by 2015-2016, said Laurence Alexander, managing director at Jefferies & Co., a development “that’s going to make life very interesting for truckers who try to compete on the longhaul.”

At that stage, truckers won’t be transitioning to natural gas to double or triple their margins but rather “just to protect” their share of the market, Alexander said.

Although the current U.S. supply of natural gas is abundant and the price is low, future prices could present risks for truckers who abandon diesel, said Jim Turnure, director of the U.S. Department of Energy’s office of energy consumption and efficiency analysis.

“We’re not sure how or when that global market might start to act more like the global oil market,” Turnure said.

The risk for trucking in the future is “who else wants to buy” natural gas, he said, adding that more natural gas use is projected for both the electric power and industrial sectors. 

Alan Krupnick, director for Washington think tank Center for Energy Economics and Policy at Resources for the Future, said that ending U.S. dependence on foreign oil is not the strongest argument for justifying federal incentives for truckers who use natural gas.

U.S. oil production is increasing, he noted, and with federal regulations in place — and stronger ones looming — that cars and trucks become more fuel-efficient and cleaner, he said that the strongest argument is that natural gas is less polluting than conventional fuel.