Werner Enterprises Tests Natural Gas Engines; Paper Transport Reports Favorable Results

This story appears in the Sept. 17 print edition of Transport Topics.

COLUMBUS, Ind. — Trucking’s experiment with natural gas engines continues to expand, as another major truckload fleet said it was testing the fuel, and a medium-size fleet already reported significantly favorable results in regional and local shipping.

Steve Phillips, senior vice president of operations of Werner Enterprises, said the fleet has three trucks that use natural gas — one with liquefied natural gas (LNG) and two with compressed natural gas (CNG).

Phillips said it was too early in the testing process to report results, but that Werner is looking for significant economic benefits.

“This has to have a return on investment for us to jump into natural gas,” Phillips said on Sept. 12 at the ACT Research Co. seminar here.

Werner, which ranks No. 11 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire fleets, has about 7,300 trucks.

Also at the seminar, Jeff Shef-chik, president of Paper Transport Inc., Green Bay, Wis., said his firm has been using CNG since February 2010.

“We started researching natural gas . . . because there were no hybrid options for Class 8. We were looking for an environmental and sustainable solution for our customers,” Shefchik said.

PTI started with two Freightliner tractors with Cummins ISL-G engines. It added five more by the end of 2010, and then 10 more the next year. Since then, the 360-truck company has also added a Kenworth tractor with a larger ISX-12G.

Shefchik said he uses the trucks for distribution in the local metropolitan area, and for running the 200 miles between Green Bay and Chicago.

Shefchik said the natural gas trucks make PTI more appealing to shippers.

“We just won a dedicated carriage contract for 15 trucks and 99% of that is because of our CNG engines,” he said.

So far, most of the carriers experimenting with natural gas engines have been among the industry’s larger firms, such as UPS Inc., Ryder System, Swift Transportation Co. and C.R. England Inc.

Stock analyst Jeffrey Kauffman of Sterne Agee said the natural gas information was noteworthy.

“I think natural gas in trucking is going to take off faster than expected. It’s gaining momentum and finding markets. No, it’s not going to be 100% adoption, but I think that eventually a majority will be in it,” Kauffman said.

He also agreed with ACT general manager and founder Ken Vieth that fleet managers will have to find new ways of measuring performance and profitability. Vieth said that old measurements, such as miles per gallon, do not capture the promise of natural gas.

Shefchik and Phillips said after their presentations that a big question about natural gas vehicles is their resale value.

“No one knows because there are no used natural gas trucks for sale now,” Shefchik said. “You’ll just have to look at the price of diesel in five years. Will it still be $4 a gallon, or $5? It’s really all about the price.”

“This is a huge concern for us,” said Phillips, adding that Werner sells its older trucks directly to used truck buyers. He said Werner currently has a young fleet with the average tractor age fluctuating between 2 and 2.5 years.

Shefchik said early adapters of natural gas may have to resign themselves to running the vehicles until they have no residual value.

Though natural gas fueling infrastructure remains another obstacle for larger industry adoption, James Harger, chief marketing officer of Clean Energy Fuels, said it was continuing to grow.

He said Clean Energy plans to open 70 natural gas pumping stations at truck stops by the end of this year and at least 80 more in 2013.

Harger said the company will offer a choice of CNG or LNG. The gas will be stored above ground as LNG, which must be kept at about minus 260 degrees Fahrenheit to remain liquid. LNG can be quickly converted to CNG if a customer requests it.

Despite the positive environmental buzz surrounding natural gas, Jason Mathers, a project manager for the Environmental Defense Funds, cautioned against labeling the fuel.

“It’s mainly a matter of relative effect. Natural gas is less carbon-intensive than coal for electric power plants and also has less mercury,” he said. That also applies for a comparison with ultra-low-sulfur diesel, he said.

But Mathers said the concern about natural gas is that when people deal with it, it can leak into the atmosphere.

He said because natural gas is lighter than air, when it escapes, it floats to the top of the atmosphere and becomes a greenhouse gas.

“The leakage issue is significant. The leaks are damaging,” Mathers said.