New Relationships – and New Engines – Rouse Truck Market
A fundamentally conservative business – American trucking – is entering a period of change as natural gas takes its place beside diesel as a viable fuel option. Relationships like those between GE and Clean Energy Fuels, which provide both fuel and financing, are helping make it happen.
Late Breaking – Clean Energy for UPS is Texas: Clean Energy Fuels disclosed early Wednesday a multi-year bulk fueling agreement to supply liquefied natural gas to two private UPS stations in Mesquite and Houston. And, under a separate agreement with UPS, Clean Energy will open three of its America’s Natural Gas Highway stations located in Texas: Amarillo, Mesquite and San Antonio, to support UPS’ over-the-road fleet.
item updated November 13
That’s the word from two men prominent on the money side, president and general manager Dan Clark of the transportation finance business of GE Capital, and Ryan Edwards, who heads the organization’s transportation natural gas initiative. Both say they’ve experienced a spike in inquiries since GE and Clean Energy last month announced a strategic alliance to speed the conversion of heavy-duty trucking fleets.
The idea is for operators to commit to natural gas fueling contracts with Clean Energy, and then apply for loans and leases, including fair market value leases, from GE Capital to deploy natural gas trucks. The goal is cost parity with diesel.
‘Better Than We Expected’
“We think this alliance will help to open up the natural gas market for long-haul operators,” Clark said in last month’s joint release. “The alliance will support the parties’ mutual goal of reducing the financial impact of transitioning to natural gas and lowering the industry’s environmental footprint.”
“There‘s been a dramatic increase in the activity level since the announcement,” says Edwards.
“It‘s better than we expected,” says Clark.
Both told F&F last week that the new 11.9-liter ISX12 G from Cummins Westport, with available 400-horsepower, has boosted the market. Clark likens today’s over-the-road situation to the refuse industry some six years ago, prior to the advent of the 8.9-liter Cummins Westport ISL G. At that time, natural gas market penetration was “negligible,” he says, whereas today, for new trucks, it’s around 60%.
More than 20,000 ISL G engines have been shipped, Cummins Westport told F&F Tuesday.
More Natural Gas Engines, More Natural Gas Trucks
They note too that Cummins is working on a 15-liter spark-ignition engine. The 15, says Edwards, “will really fill the void.“
“This market‘s evolving,” he says. “Every day the footprint expands.”
“You‘re dealing with a technology shift.”
The GE Capital executives see the fastest uptake on the West Coast, where port initiatives, Clark notes, have given the natural gas truck business a head start. Edwards sees dedicated logistics firms getting on board first, and a “west-to-east migration” geographically.
“The dots across the country are starting to get connected,” says Clark.
Infrastructure Is Key
But, “The industry is one that is not prone to quick change,” he says of trucking. “The key is to get the infrastructure up to where there’s a confidence level” – hence the GE-Clean Energy cooperation. It’s all because natural gas, Clark says, “just shouts to being the fuel of the future.”
GE and Clean Energy have a deepening relationship on what Clark calls “the industrial side” – LNG production – as well. The two companies said late last year that Clean Energy would use GE’s Micro LNG plants to produce fuel for its America’s Natural Gas Highway network for natural gas fueling at more than 100 truck stops (production sites are being nailed down in the Midwest and Northeast).
Clean Energy and several GE units more recently teamed with Ferus Natural Gas Fuels to form Eagle LNG, which will build its first plant, also based on GE’s Micro LNG offering, in Jacksonville, Fla. Target markets besides trucks include marine and rail. Clean Energy has supplied LNG for GE’s dual fuel locomotive development work in Erie, Pa. too (F&F, June 18).
Jim Harger is chief marketing officer at Clean Energy Fuels. Greg Roche is national accounts and infrastructure VP. Don Horning is trucking sales VP.
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Source: Fleets & Fuels interview