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Despite a drop in diesel prices stemming from the oil price crash, vehicles fueled by natural gas will remain attractive as they offer big long-term cost savings, trucking and fuel executives said on Wednesday.
Tumbling prices for diesel, now around $2.78 a gallon, have reduced the savings that can be had by switching to trucks powered by natural gas, but the savings that exist are still sizeable.
"We don't have the same level of exuberance (for natural gas trucks) that we encountered 12-18 months ago, but there is still a significant amount of interest from customers who are looking at it through a longer term lens," said Scott Perry, the head of truck purchases at Ryder System Inc..
Cost savings from natural gas have been estimated as high as 40 percent, depending on its spread relative to diesel. Customers tend to prefer natural gas as it is easier to budget for because it is less volatile than diesel, Perry said.
Companies like Ryder allow clients to lease vehicles, so they can avoid higher capital costs associated with trucks with natural gas engines.
Daniel Sperling, director of the Institute of Transportation Studies at the University of California, Davis, said there is some skepticism about the ability of natural gas trucks to displace diesel ones.
That is because from an environmental standpoint new diesel engines and natural gas engines are about the same in terms of emissions and greenhouse gas issues.
Mitchell Pratt, COO of Clean Energy Fuels Corp., which provides fuels and fuel systems for fleets, said 60 percent of all garbage trucks sold now have engines that burn natural gas.
"As you get more economies of scale, you'll see more and more shifting over to natural gas," Pratt said. "I think you are going to see larger and larger penetration of natural gas trucks in the marketplace. The economics are there."
Source: Reuters
