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LNG: It’s More than the Per-Gallon Price

December 28, 2013 in Companies, LNG by Rich Piellisch  |  No Comments

For Over-the-Road, Says Clean Energy, It’s ‘Total Cost of Service’

The “total cost of service” is more important than simple cost per gallon when it comes to deciding between liquefied natural gas and compressed natural gas, says Clean Energy Fuels. When over-the-road truckers consider such factors as the time it takes to fill, and the cost and weight of CNG tanks as compared to LNG tanks, LNG is the clear winner, the company maintains.

UPS is a Clean Energy customer for LNG-fueled over-the-road trucks…

UPS is a Clean Energy Fuels customer for LNG-fueled over-the-road trucks…

“Our biggest competition,” says Jim Harger, chief marketing officer at Clean Energy, “is misinformation.”

CNG has its place, Harger says, citing smaller vehicles, package delivery, transit buses and refuse trucks as examples. In fact, “It’s our bread and butter,” he says, as Clean Energy operates nearly 400 CNG stations.

But Clean Energy has simultaneously made a huge bet on LNG for over-the-road trucking, now targeting the end of 2014 for a network of 150 LNG fueling stations nationwide.

Faster Fills

“Everybody else sells one fuel,” Harger says. “We sell both.”

Clean Energy (NASDAQ:CLNE) has built more than 90 of its “America’s Natural Gas Highway” LNG stations, and more than 20 of the ANGH outlets are providing LNG to over-the-road customers. “It’s the best fuel for long-haul and weight-sensitive applications,” Harger says.

…and for CNG-fueled package delivery vans.

…and for CNG-fueled package delivery vans.

LNG’s big advantage for the over-the-road market is its similarity to familiar diesel in terms of truck design, weight, and fueling times. Unlike CNG stations limited by compressor capacity, “Our pumps can fuel two dispensers at the same time at 20 diesel gallon equivalents per minute,” Harger says. “The industry’s not happy at five gallons per minute,” he told F&F. “Price comes down to time, and with the recent driver hours of service impact, time is money.”

CNG’s Heat Penalty

Assuming 100,000 miles per year, Clean Energy reckons extra driver time of about 42 hours per year fueling CNG instead of LNG – “You end up spending one week,” he says, standing and waiting. “In this industry, you cannot afford to be sitting at the fuel pump.”

Outsize (and economically unacceptable) investment in extra compression could speed fueling, he says, but because fast CNG fueling generates heat, which effectively lowers CNG fuel cylinder capacity, a truck carrying 100 DGEs of fuel really needs about 135 DGEs worth of CNG tanks to provide the desired 600-mile range, he says.

Lighter Trucks

The heat penalty exacerbates CNG’s up-front cost penalty: CNG fuel cylinders cost more than cryogenic LNG tanks, working out to about twice as much, gallon for gallon, Harger says.

CNG tanks are heavier too: “A 600-mile truck will have a weight penalty of at least 2,000 pounds,” Harger says, meaning less cargo and less revenue.

“Conversely,” he says, “an LNG truck with 600 miles range has a weight penalty of a few hundred pounds.”

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Source: Fleets & Fuels interview

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