Fresh from designing three natural gas vehicle (NGV) garage modifications and enthused about the place for NGV in the market, two years ago I wrote an article for our e-newsletter about the opportunity for the trucking industry to switch from diesel to natural gas fueled trucks.

Back then two things had emerged to make natural gas an attractive option. First, due to the advent of “fracking”, natural gas supplies had boomed and provided access to cheap domestic energy. Secondly, crude oil was $100 a barrel and diesel was $3.90 per gallon.

Today a barrel of oil is in the neighborhood of $40 per barrel and diesel is about $2.50 a gallon. The price of CNG (compressed natural gas) has held pretty steady, selling today at $1.94 GGE (gasoline gallon equivalent). With the drop in diesel prices, are CNG trucks still viable?

Truck manufacturer, Freightliner, has a handy on-line natural gas savings calculator, (www.freightlinergreen.com/calculator), where you can calculate the difference in annual fuel cost between a diesel rig and a CNG truck.

Don’t you love the Internet!

Oops, first problem: this calculator was programmed back when oil was expensive so it won’t let you set the price of diesel below $3.00/gallon! Less critical, the price sliders are preset at 25 cent increments so prices like $1.94 have to be rounded to $2.

No problem! This is exactly why iPhone has a calculator App.

The on-line calculator is still good to calculate the annual fuel consumption that I can multiply by current prices with my iPhone calculator. Assuming a single truck fleet with 50,000 average miles traveled per year and diesel at 6 MPG (actual average for a diesel tractor-trailer), CNG would still save $2,870 per year even with the current low price of diesel compared to two years ago

By the way, did you catch the subtle advantage for CNG: price stability. While the drop in diesel prices over the past two years makes diesel look pretty good right now, CNG has remained fairly constant. Consistent CNG prices provide the advantage of being able to confidently budget truck fleet costs and set rates accordingly.

Comparing fuel costs however is just the obvious, top-of-the-mind comparison; we have to consider other financial factors:

First, CNG trucks cost more to buy than diesel trucks. So to encourage the transition to CNG, the government provides incentives to offset the cost difference. But the differential is still about $18,000. So with the current differential in fuel costs, payback on the incremental truck cost would take 6.27 years. Two years ago with higher diesel prices, the payback was about two years.

Now you’re thinking I may as well stick with my trusty old diesel. Oh but wait! There are also diesel investment expenses if you already own a diesel truck, at least in California. California Air Resources Board regulations require older trucks to install and maintain diesel particulate filters and owners of older trucks will have to upgrade to trucks with 2010 model year or newer engines by no later than 2023.

The quest for cleaner air and quieter neighborhoods is as much a catalyst for the logistics industry to improve technologies and strategies as is increasing profits. Here CNG again presents some environmental advantages:

A primary benefit of CNG is it provides the cleaner burning technology: greenhouse gas emissions are reduced by up to 20% vs. diesel
Noise Reduction: On average CNG runs 10 decibels quieter than comparable diesel engines
Domestic fuel source: North America has abundant natural gas reserves, reducing dependence on foreign oil. Domestic natural gas is moved through pipelines while foreign oil comes in tanker ships that add to the carbon footprint.

So looking at the long view, even with low diesel prices, advantages still hold up 2 years later for CNG trucks.

At least until hybrid diesel, plug in electric, hydrogen or hyperloop technologies make sense for long haul trucks. Stay tuned.

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