|Navistar’s Multi-Company Partnership That Makes Natural Gas a Reality|
|Friday, 29 June 2012 10:04|
Good environmental citizenship is not always viewed as aligned with the bottom-line demands of running a business. But for companies who can find new ways of working together to bridge marketplace gaps, that alignment can become a reality.
A timely example is natural gas. For years, many environmental advocates have pointed to the potential of natural gas as a clean, environmentally benign option for many uses, including powering commercial vehicles. And recently, as the price of oil has soared, truckers, too, have become more interested in natural gas—particularly because recent advances in extraction technology have resulted in a cheap, abundant supply of the fuel, right here in the United States.
However, two major issues have gotten in the way of truckers adopting natural gas: the higher upfront cost of natural gas vehicles, and the scarcity of natural gas fueling stations.
How to bridge those gaps and make natural gas vehicles a real factor on American highways?
Navistar, the maker of International commercial vehicles and MaxxForce engines, held conversations with Clean Energy Fuels Corp. and Pilot/Flying J Travel Centers, who provide natural gas and the natural gas fueling infrastructure.
The result, announced earlier this year, was an alliance that made it less costly for truckers to acquire natural gas vehicles – and easier to keep them fueled.
If a trucker or truck fleet purchases an International truck that is powered by natural gas, they can offset the higher upfront costs by agreeing to purchase from Clean Energy, each month, the natural gas equivalent of 1,000 gallons of diesel fuel.
For most truckers, that’s a commitment that’s easily made, since the average long-haul truck uses approximately 1,250 gallons of diesel fuel a month.
If a customer makes that commitment, Clean Energy will offset the monthly lease cost of that natural gas-powered truck, so it is comparable to that of an equivalent diesel vehicle.
In addition, Clean Fuels will offer a fuel savings of 60 cents for every diesel gallon equivalent of natural gas, compared with the official price index published every week by the U.S. Energy Information Administration.
What that means, in the words of one Navistar official, is that “the cost to go from diesel to natural gas can be totally mitigated.”
But what about the infrastructure issue?
Clean Energy and Pilot/Flying J are working to address that. They are creating a U.S. natural gas fueling supply network that will stretch from coast to coast and border to border.
This network will be up and running soon, with 70 liquefied natural gas (LNG) fueling stations open in the United States by the end of 2012, and another 100 stations to be added in 2013.
This multi-company alliance will also enable truckers and truck fleets to lock in the cost of natural gas, so they can count on a low operating cost for the lifetime of their new vehicle.
Meanwhile, Navistar already offers two truck product lines, the International DuraStar and WorkStar, that can be powered by natural gas, and is working with its engine technology partners to expand its natural gas-powered product offerings. Other companies will no doubt be coming forward with new product offerings as well.
Thanks to these developments, it’s finally true, as Navistar’s Chairman, President and CEO Dan Ustian has stated, “Natural gas has clearly emerged as the most realistic alternative fuel option for the trucking industry.”
The key lesson from this experience is that good environmental citizenship can also make good business sense — if U.S. businesses are willing to get creative and look beyond the walls of their own company.
Editor's Note: Care about this topic? BCLC is hosting a working meeting on environmental innovation on July 18, 2012.