ACT Expo 2018

American Power Group (F&F Strategies)

February 10, 2012 in CNG, LNG by Rich Piellisch  |  No Comments

Diesel-Methane Price Spread & EPA Rule Change
Spell Dual Fuel Opportunity: 40 Engines Targeted

The confluence of an “unprecedented” price spread between diesel and natural gas and a more liberal U.S. EPA engine approval regime has Iowa-based dual fuel specialist American Power Group ready to tackle the American trucking sector in a big, big way: 40 engine families are to be offered.

“Diesel engines aren’t going to go away anytime soon,” says Lyle Jensen, APG president and CEO. And with far less costly natural gas evidently here to stay, APG is promoting a relatively cheap way – about $13,000 now, plus fuel tanks – to run on a 50-50 mix, with only eternal modifications to the diesel engine.

“We bring an economical and diesel-powered option to the fleet owner,” he says. Power and torque are maintained, standard diesel oil may be used, and fuel costs drop.

Back-of-cab LNG tank installation on tractor converted to dual fuel operation by America Power Group for Australia'€™s Wesfarmers.

“We’re displacing 50 to 53%” of the diesel, he says.

“We maintain the same efficiency, and same miles per gallon at 25 to 30% less net fuel cost based on this price spread.”

“We don’t think we need to apologize for a 50-50 mix,” Jensen told F&F. “If I can sell ten times as many 50-50 mixes to the aftermarket, it’s good.”

Jensen points to EPA’s April 2011 rule change allowing approvals of older engines modified to run on the natural gas-diesel mix (approvals as opposed to full certifications), and APG’s first approval, secured in September, for 2004-2005 Caterpillar C15 engines.

The C15 is just the start. “We plan on rolling our 40 engine approvals in the next two years,” Jensen says.

“Four out of the 40 will be done by March or April.”

APG describes a third-generation digital, “non-invasive” design, whereby methane is introduced through the air intake/turbocharger. The system uses Impco regulators, Bosch throttlebody controller, and Woodward Governor read-only ECU. APG has tapped Agility Fuel Systems to help with fuel system installations, both CNG and LNG.

The APG system allows a “seamless” return to full diesel operation if natural gas is not available. And, the APG hardware can be removed and transferred to other approved engines at the end of a vehicle’s life.

APG says that more than 1,000 of its systems are already in operation in North and South America, Africa, India, Egypt and Pakistan, and Australia. There, the hauler Wesfarmers is something of an APG poster child, as it’s been using Volvo D16 engines modified for dual fuel operation to haul 120,000-lb triple trailers – “a great proving ground for us,” Jensen says.

With Wesfarmers satisfied, “we really feel good now about the durability,” he adds. Drivers are even reporting less need to downshift, he says, as the advanced flash point of the diesel-methane mix improves drivability under load.

ROI of a Year, and Maybe Less

Beyond the Cat 15, APG is targeting engines including the Cummins ISX, various Detroit Diesel models, Mack E-7 and MP 7, and more Caterpillar years and models. Jensen hopes to add one or two per month until the 40 engine families are approved, and then continue as more engines become eligible: “a perpetual source of engines coming as each model gets two years older.”

APG has supplied its systems for converting Petrohawk engines for oil production to bi-fuel, but Jensen says his focus is the highway market, with “tens of millions of trucks to address rather than tens of thousands” of oilfield engines.

There is “a theoretical addressable market of $5 billion,” he says. To address it, APG is developing a strategy combining a network of certified installers and training of fleet customer mechanics. “We’re aligning ourselves with 40 customers that have the targeted engine types,” Jensen says.

He predicts that as volumes develop, the system price will drop to $10,000 or less, making for ROI of less than a year, even counting the natural gas fuel tanks.

Caption: Back-of-cab LNG tank installation on tractor converted to dual fuel operation by APG for Australia’s Wesfarmers.

Caption: Rail-mounted CNG cylinder installation on tractor converted to dual fuel by APG for Wis-consin’s Paper Transport, Inc.

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