- Pressroom Homepage
- Media Contacts
- Areas of Expertise
- News Releases
- IHS Media Experts
- Broadcast Studios
- Multimedia
- Corporate Profile
- Daniel Yergin | The Quest
- Describing IHS
- IHS CERAWeek 2013
Natural Gas Vehicles Poised to Penetrate U.S. Long Haul Trucking Fleet, IHS CERA Report Says
Even without government incentives operators can recoup costs of vehicle in just over three years
Category:
Thursday, June 21, 2012 11:00 am EDT
Dateline:
Cambridge, Mass.
"The route is known, the mileage is high and economics is the primary decision factor."
Vehicles fueled by liquid natural gas (LNG) are poised to penetrate heavy duty trucking due to low natural gas prices resulting from the United States’ unconventional gas boom, according to a new IHS Cambridge Energy Research Associates (IHS CERA) report. Unlike light-duty vehicles (LDVs), the economics are favorable to both vehicle owners and LNG suppliers, the report says.
Heavy duty vehicles—unlike LDVs—repeatedly travel set shipping routes over long distances (up to 120,000 miles per year). These long distances allow truck operators to generate large savings on fuel costs over a short period of time while the high degree of regular traffic over the same routes and the high volume of fuel carried per truck makes supplying LNG economical for retailers, the report says.
“Liquefied natural gas for heavy duty trucking cracks the classic chicken and egg cycle that plagues new transportation technologies and fuels,” said Tiffany Groode, director of the IHS Automotive Long-Term Planning and Scenarios Service. “The route is known, the mileage is high and economics is the primary decision factor.”
The nature of the heavy duty trucking fleet makes it possible for operators to take advantage of retail LNG prices that were as low as $1.70 equivalent to a gallon of diesel (DGE) in April of 2012 compared to diesel, which is expected to average $3.91 per gallon over the next five years. The price differential makes the higher incremental costs of LNG heavy duties vehicles—which range from $40,000-$75,000 more than diesel-fueled trucks—economical, the report says.
The IHS CERA report finds that LNG heavy duty trucks would recoup the initial costs of the investment in three years without government incentives.
Though economics is the primary incentive, LNG adoption in heavy duty trucking also contains energy security and climate change benefits, the report says. Switching to domestically produced natural gas reduces the need for oil imports and the greenhouse gas intensity of natural gas is 7 to15 percent less on a well-to-wheels basis.
Hurdles to LNG adoption in heavy duty trucking do remain and will likely temper the adoption of LNG in heavy duty trucking in the near term, the report says. These include a lack of LNG retail, uncertainty over future government support and the need for new training and logistics. Hardware maintenance, availability of replacement parts and the long-term durability of the cryogenic fuel tanks are also factors that need to be addressed. The ability of cryogenic tanks to maintain a vacuum for proper tank insulation is important both for minimizing venting and for safety in the event of vehicle collision.
Major fleet operators are likely to be the first to deploy new LNG vehicles since their larger scale gives them greater ability to adopt new technologies and manage operational logistics. IHS expects major fleet operators to gradually increase their purchases of new LNG vehicles in small quantities over the next two to four years.
“Entry of natural gas vehicles into the heavy duty truck fleet will take some time—the change won’t happen overnight—but the motivations are there for both operators and suppliers to clear the hurdles that remain,” said Rafael McDonald, IHS CERA director, global gas and LNG. “Natural gas is a cheap and abundant fuel, and its use in the long-haul trucking industry provides a significant competitive advantage.”
####
About IHS (www.ihs.com)
IHS (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape today’s business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS employs more than 6,000 people in more than 30 countries around the world.
IHS (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape today’s business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS employs more than 6,000 people in more than 30 countries around the world.
IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. © 2012 IHS Inc. All rights reserved.
Contact:
Energy & Power; Defense, Risk & Security
Jeff Marn, +1 202 463 8213
Energy Strategy, Renewable Energy
jeff.marn@ihs.com
Jeff Marn, +1 202 463 8213
Energy Strategy, Renewable Energy
jeff.marn@ihs.com