Economics of Natural Gas “Overwhelming”

The combination of pricey diesel fuel and unreliable sources of foreign oil is leading more and more American companies to turn to domestic natural gas to power their truck fleets.

According to the Wall Street Journal, America’s abundant supplies of natural gas, which have already changed the market for electricity, are changing the transportation industry as well.

Never before has the price gap between natural gas and diesel been so large, suddenly making natural-gas-powered trucks an alluring option for company fleets, rather than an impractical idea pushed mainly by natural-gas boosters like T. Boone Pickens, the Texas oilman.

The Journal’s Rebecca Smith singled out Houston-based Waste Management Inc. as an example of this trend.

This year, the nation’s biggest trash hauler has a new defensive strategy: it is buying trucks that will run on cheaper natural gas. In fact, the company says 80% of the trucks it purchases during the next five years will be fueled by natural gas. Though the vehicles cost about $30,000 more than conventional diesel models, each will save $27,000-a-year or more in fuel, says Eric Woods, head of fleet logistics for Waste Management. By 2017, the company expects to burn more natural gas than diesel.

“The economics favoring natural gas are overwhelming,” says Scott Perry, a vice president at Ryder Systems, Inc., one of the nation’s largest truck-leasing companies and a transporter for the grocery, automotive, electronics and retail industries.

Read more HERE.

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