Is Natural Gas the Future Fuel of the Trucking Industry?

Posted August 3, 2017 by Administrator in Transportation | 0 comments

The importance of natural gas in the marketplace is growing, especially in the trucking and shipping industry. For the past decade, companies that use large amounts of fuel, such as FedEx, UPS, Southwest Airlines and cruise ship companies have been concerned about the lack of a national energy policy as well as the increasing dependency of the country on imported petroleum.

In 2005, the U.S. Energy Security Leadership Council was formed to develop a long-term, comprehensive policy to reduce U.S. oil dependence and improve national energy security. The Council identified three recommendations for the nation to secure America’s future energy safety.

  1. Produce as much of our own energy in the United States as possible
  2. Reduce energy consumption, and
  3. Develop alternatives to imported petroleum.

The U.S. has a massive supply of natural gas that will meet our needs far into the future. Natural gas has recently received renewed attention as an alternative fuel for the trucking industry.

Natural gas is a naturally occurring hydrocarbon gas mixture that consists primarily of methane. Natural gas is found in natural rock formations deep underground. About 88 percent of the natural gas consumed in the U.S. is found in the U.S. Most of the rest is found in Canada (10.5 percent). A very small amount (1.5 percent) is imported as liquefied natural gas. Since most of our natural gas resources are domestic, the potential economic impact of converting fleets to natural gas is extremely positive compared with importing millions of barrels of oil from overseas, as is currently the case.

Besides the obvious benefit of improving our economy and increasing national security, there are other benefits of natural gas. The U.S. Department of Energy has found that natural gas vehicles emit lower emissions. Natural gas vehicles produce significantly lower amounts of harmful emissions when compared with vehicles fueled with conventional diesel.

Natural gas fueled vehicles have been shown to have reduced emission rates of:

  • nitrogen oxides
  • particulate matter
  • toxic and carcinogenic pollutants, and
  • greenhouse gas carbon dioxide.

Converting even a small percentage of current trucking fleets to natural gas could significantly impact the U.S. in a positive way.

In addition to reducing fewer emissions, natural gas saves money on fuel. Currently, the cost of diesel is above the $4 per gallon mark. Natural gas currently costs about $1.89 per gallon. This is less than half of the cost of diesel. The trucking industry consumes about $53.9 billion gallons of fuel a year. If these trucks all switched to natural gas, they’d save about $108 billion.

Natural gas as fuel for the transportation industry seems too good to be true. It’s inexpensive, and its emissions are significantly lower than those emitted by petroleum. But there is a catch; any methane gas that escapes instead of burning is much more impactful than emissions from petroleum bases fuel. When it comes to air quality, more research needs to be done to understand and find a practical, sustainable solution.

In order to further study and explore solutions, The Environmental Defense Fund is conducting research to measure methane leaks at various stages of refueling as well as operations.

Natural gas is a domestic resource that can reduce fuel costs, decrease our dependence on overseas oil purchases and improve our environment. With continued collaboration and commitment to high performance standards, natural gas will be a win for future generations of shippers and motor vehicle fleets.

Cline Wood represents top trucking insurance carriers across the country. To learn more about the issues that concern commercial truck carriers today, trucking insurance coverage and risk management, contact us here.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

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