Business Trends

 

11 20 2013

11 20 2013

More Truckers Using Natural Gas

The nation’s growing supply of natural gas is changing the transportation industry. The clean burning fuel that is cheaper than diesel is starting to be used by trucking companies in the U.S.

UPS and FedEx are among the shipping giants that plan to start using natural gas for at least some of their rigs, The Wall Street Journal reported. Other companies planning to shift include Lowe’s and Procter & Gamble.

Sparking interest in natural gas, which can fuel trucks in a compressed or liquefied form, is its lower cost and cleaner impact.

“It’s cleaner than the average truck running today,” said Steve Palmer, vice president of transportation for Lowe’s. “It’s a long-term play that could save a lot of money.”

Compressed natural gas runs around $1.50 more per gallon than diesel. Liquid natural gas is half the cost of diesel, according to Engineering News-Record. David Steiner of Waste Management told WSJ that he expects to save $15,000 and $20,000 a year per vehicle by converting to the fuel source.

Taking it slow

While many truckers are quick to adopt the new technology, others are waiting for it to grow. Several trucking companies, including Con-way, Schneider National, Swift Transportation and Werner Enterprises, are experimenting with the new vehicles, but holding their investments until more powerful engines hit the market, according to WSJ.

The companies are also waiting for more infrastructure to emerge that supports the fuel source. Fueling stations and repair centers are needed for cross-country trips. However, currently only 618 compressed natural gas and 42 liquid natural gas stations exist, according to the U.S. Department of Energy.

For some, fueling might not be a problem. Stations are clustered along the West coast, Rockies, upper-Midwest and East coast. There’s also a large cluster of stations in Oklahoma and Texas, with many more scattered throughout the South. Those who make trips to remote areas, however, may need to wait before considering the option.

As energy developments continue to catch the eye of leading corporations, smaller trucking companies are similarly intrigued by their prospects. While some might wait for the costs to decline or for infrastructure to improve, others may take advantage of Section 179 tax benefits and purchase this year. Under current legislation, small businesses can receive Section 179 tax breaks for some job-related purchases. The benefits, however, are set to end at the start of 2014. Those who can’t afford a purchase should consider equipment financing to take advantage before the deadline.

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