The Anglo-Dutch company’s Green Corridor project in Canada will make 300,000 tons of LNG a year. It plans to start production at its first small-scale gas liquefaction plant at Jumping Pound near the route’s halfway point next year.
“These trucks are more expensive than the traditional diesel trucks today,” Shell’s Lima said. “You need to have economies of scale to bring these costs down.”
Shell is cooperating with Vancouver-based Westport Innovations Inc., the maker of cryogenic fuel tanks and the only currently available 15-liter gas-powered engine suitable for heavy-duty trucks running on LNG.
The second Canadian maker of gas powered engines is Cummins Westport Inc., which makes smaller 8.9 liter heavy-duty unit. The Vancouver-based joint venture of U.S.’s Cummins Inc. and Westport has designed a motor able to run on either compressed natural gas, CNG, or LNG.
CNG is used for light- and medium-duty vehicles, such as buses and garbage trucks. LNG, which is using a cryogenic technology to chill gas and reduce it to one-six-hundredth of its original volume at low temperature, is offered mostly as a fuel for heavy-duty vehicles.
CNG, which is stored at ambient temperature, requires tanks with thicker walls to hold the pressure and provides less energy per volume. Therefore, long-haul trucks can take more LNG on board in lighter chilled tanks with less time required for refueling per energy unit.
“Drivers have been very receptive to LNG trucks, especially since they drive like diesel trucks,” said Cara West, a spokeswoman at Paccar Inc., which designs and manufactures trucks under Kenworth, Peterbilt and DAF nameplates and where Ferus bought its vehicles. “Dealers are receiving multiple inquiries from customers anxious to learn more about LNG trucks.”
Paccar currently equips some of its Kenworth and Peterbilt models with LNG engines. The Washington state-based maker expects the gas-powered-truck market share in North America to expand to about 20 percent in the next several years, up from about 6 percent now.
With natural gas fuel taxed about 20 Canadian cents less a liter than diesel on equivalent basis, it takes less than five years for a driver to return extra investment benefiting from cheaper fuel, according to the Canadian Natural Gas Vehicle Alliance. Canada has more than 100 LNG powered trucks almost equally split between western and eastern parts of the country operated by Vedder Transport, a milk hauler in British Columbia, and Robert Transport, which operates in Quebec and is expanding the fleet.
In January, President Barack Obama said tax breaks for natural-gas powered trucks will help cut dependence on imported oil in the world’s largest crude-consuming country. “We, it turns out, are the Saudi Arabia of natural gas,” Obama said. The U.S Senate and House have been reviewing the bill to boost greater use of the gas.
“The potential is there, and when you have this huge resource in the U.S., and you’ve got almost 10 million barrels per day imported being used for transportation fuels,” said Theepan Jothilingam, an analyst at Nomura Holdings Inc. At some stage, the U.S. government “will need to give a tax break and encourage both the technology and the execution of this technology.”
Billionaire investor Pickens has been lobbying for incentives to stimulate greater use of natural gas as a vehicle fuel to replace imported oil. Pickens is the largest shareholder of Clean Energy Fuels, a natural-gas supplier for bus and truck fleets, which is building America’s Natural Gas Highway across the U.S. to fuel long-haul trucks with LNG starting from the end of this year.
About 30 percent of U.S. “classic trucks” can be converted to run on LNG, which needs highly utilized vehicles running lots of miles to pay back for the additional engine costs by fueling it with cheaper LNG, said James Burns, Shell’s general manager for LNG in Transport, Americas. “Emissions is a key issue here as well both on local air emissions and green- house gas emissions.”