Natural gas-powered refuse truck use flourishes in U.S.
It seems that we are at the intersection of wide acceptance of natural gas powered refuse trucks, the quest for cleaner air and the “shale tsunami” that promises long-term price stability for natural gas (NG). This convergence is playing out across the country in large and small municipal waste departments and among private contractors who are buying natural gas vehicles and investing in fueling stations like never before. What was once prompted by environmentalism is now being driven by large savings on fuel.
The significance of U.S. shale gas development cannot be underestimated. According to the recent 11th annual Energy Industry Outlook Survey conducted by the KPMG Global Energy Institute, nearly two-thirds of energy executives now believe the United States can attain energy independence by 2030, eliminating the U.S. dependency on foreign oil.
Given the potential of shale development, energy executives appear more confident as to relative price stability. Most (73 percent) are bullish that the price of natural gas will remain steady between $3.01 – 4.00 MMBtu (Million Metric British Thermal Units) for the remainder of the year. Similarly, 39 percent of respondents expected Brent crude oil to peak at $116 to $125 per barrel in 2013.
Depending on geographic location and proximity to gas lines, the average price of natural gas today can cost $1.50 to $2.00 less per diesel gallon equivalent (DGE) and projections look like this favorable cost trend will extend well into the future. Moreover, refuse fleet operators can get fixed-price, multi-year contracts from suppliers of Compressed Natural Gas (CNG) and Liquid Natural Gas (LNG).
CNG is gas compressed to less than one percent of the volume it occupies at standard atmospheric pressure and put into high-pressure containers for storage and fueling. There are two fueling options – fast-fill, which takes about the same time to dispense as diesel or gasoline; and time-fill also called slow-fill, which requires six to eight hours and is best suited for locally operating fleets where overnight filling is practical.
LNG is natural gas that has been converted into liquid for easier storage and transport. It takes up about 1/600th the volume of natural gas in the gaseous state. It is odorless, colorless, non-toxic and non-corrosive. LNG’s shortcoming is that the fuel must be delivered in tankers and stored in special vertical cylinders whereas natural gas can be tapped from local pipelines and compressed into CNG at a fueling station.
Over the past several years, CNG time-fill has become the most popular for refuse fleets as an alternative to gasoline and diesel, while LNG is proving better suited for Class 8 tractor-trailers needing fast-fills.
Natural gas powered trucks also cost substantially more than their diesel equivalents and require between $1,500 and $3,500 annually, per truck, for maintenance and tank inspections. But, as the popularity of CNG refuse trucks continue to increase, procurement costs are decreasing.
Curtis Dorwart, vocational marketing product manager for Mack Trucks told us about his company’s surge in NG powered trucks: “Mack has definitely experienced strong growth in CNG sales over the past few years. Last year, Mack built more natural gas powered trucks than we did during the 1998 to 2005 time period, when natural gas first started to gain some interest in the refuse industry. CNG is the primary fuel used for refuse trucks today. The engine itself doesn’t know the difference between LNG and CNG. LNG was the fuel of choice during the previously mentioned 1998 to 2005 timeframe, and its use was limited mostly to the west coast. Today, the far dominant player is CNG. CNG fueling is much better suited to a refuse application and there are no boil-off gas concerns as there are with LNG.”
A CNG fueling station, however, is more expensive to build than the average gasoline or diesel pumping station. A CNG time-fill station suited to a local fleet that can fill 15 vehicles can cost upwards of a half-million dollars. Depending on many factors, a fast-fill CNG station can range in cost from $1 to $2.5 million. Refuse fleets are particularly suited to CNG time-fill because entire fleets can be filled after 6 PM for the required 6 to 8 hours filling time running compressors during off-peak electric rate periods.
Bob Wallace, a principal and vice president of client solutions at WIH Resource Group (WIH), weighed in on the current state of NG powered refuse trucks. WIH is a waste management and environmental research, and logistics consulting group that has been retained by both public and private garbage collection fleets to assist them in researching the use of CNG, LNG and biodiesel fuels for collection of solid waste for residential, industrial and commercial customers.
“Everything I’m reading and everything we are involved in and the level of work we are doing across the country indicates a boom in fleet conversions to CNG powered garbage trucks. The bus transit systems all did it 10 plus years ago. Now it’s turning to natural gas for the refuse collection fleets. CNG is now the industry “norm” and LNG is fading out due to the issues with fuel loss and the training required for fueling the vehicles via the conversion process from making a gas into a liquid. A large percentage of both public agencies and private sector fleets are converting right now to CNG,” said Wallace.
“Shale gas has been a big factor, but the bigger thing over the past few years is continual stability in price points for a diesel gallon equivalent of natural gas. We have studies dating back to 2008 on fleet conversions to natural gas before all of these shale discoveries. Then it had a price point with not much of an advantage to convert from diesel. At that time, fleets were converting because it was the right thing to do environmentally, specifically in California where you had EPA and local air-quality districts monitoring diesel emissions. What used to be a ‘clean-green’ thing has boiled down to pure economics, the cost of fuel and return on investment in the fleet and fueling stations. Over the past three years, our customers know it’s the right thing to do, but they’re saving a lot of money on fuel at the same time.”
“For small jurisdictions that are only running five or so truck fleets, it may not make economic sense, or they may not be eligible for grant funding, but many medium sized and large cities are converting their fleets to natural gas.”
“The City of Mesa, Arizona, has already committed to purchasing eight new CNG powered refuse trucks and our studies are underway looking at the entire fleet conversion for their refuse fleet and building two fueling stations. Mesa is in a unique position because they own their own natural gas supply. They are going to be able to fuel their garbage trucks at a very low cost. The flip-side is they are also looking at public-access stations as a way to generate additional revenue for the city. They are talking about doing media campaigns to local beverage distributors, package delivery services and the like to evaluate potential customers to utilize their public access stations.”
“We did a few studies for the city of Tucson, Arizona over the past five years and they held off. It was the economics that drove their decision. This month, however, Tucson unveiled its first CNG powered garbage truck so the lower cost benefit of natural gas is proving the driver. The City of Tacoma, Washington is looking at converting their more than 60 truck refuse fleet and assessing conversion and modifications to fleet maintenance and fueling facilities. Every one of our recent studies for clients also contemplates public access as an additional means to make money for them at their CNG fueling stations. Many cities are also incorporating mandatory NG powered refuse trucks in RFP’s to private contractors as a way of making the transition.”
“We are doing a lot of CNG studies, analysis and projections over the life of the refuse truck verses diesel. We are also looking at building new CNG fueling stations and we’re partnering with another firm looking for grant funding for jurisdictions that can qualify for it. So it’s been exciting times,” Wallace ended.
In searching for a cleaner, less expensive fuel than diesel to power refuse trucks many cities, municipalities and towns across the New York City, Long Island and New Jersey region have already found a better option using natural gas.
According to Tomorrow’s Trucks, Leaving the Era of Oil Behind, a report released in May by the national non profit organization Energy Vision, there has been a rapid rise in the use of natural gas garbage trucks, a 10-fold increase over the last 5 years. “Heavy duty trucks have been among the most polluting and fuel-consuming fleets in the region,” says Energy Vision’s president, Joanna Underwood, “and this shift has eliminated the need for 4.52 million gallons of diesel fuel producing significant fuel cost savings of from $4.5 to $6 million a year.”
The shift away from diesel trucks in the U.S. got underway first on the West Coast, where, by 2003, 23 California communities had 648 natural gas trucks in operation. But East Coast communities did not really begin to use this new fuel until five years later.
Before 2007, only a handful of trucks powered by compressed natural gas (CNG) were used in the Northeast. But in 2007, 38 were ordered, and over the next 5 years, Energy Vision’s report documents that they were being used in 13 communities and the number of trucks rose 10-fold – from 38 to 381. “Many of these communities,” added Underwood, “seeing the value of natural gas, then began to use it in other types of vehicles, such as street sweepers, snow plows and jitneys.”
“Energy Vision’s research confirms the amazing strides New Jersey has made in 5 years from literally no natural gas refuse trucks in 2007 to more than 180 today,” said Chuck Feinberg, Chairman of the New Jersey Clean Cities Coalition.
The use of these trucks has required the build-out of natural gas refueling infrastructure, and a new industry emerged to meet this need. There are now 71 refueling stations in the New York metro region.
“Our research shows that a number of factors have led to the increased use of natural gas garbage trucks,” explained Matt Tomich, co-author of Tomorrow’s Trucks. “The power of example was important. When Smithtown, New York made this shift in 2007, fleet operators and community leaders from neighboring towns on Long Island went to see the new CNG trucks and fueling station as did officials from New Jersey, Pennsylvania and other states. As natural gas engines became more sophisticated, and had more power and torque, interest in using them expanded. And when stricter EPA standards for diesel fuel use required complex expensive new pollution controls for diesel trucks, the price advantage that diesel trucks had had of $50,000 to $70,000 was cut in half. We believe that, at present, the key driver for fleet conversions is the rock bottom price of natural gas fuel. But,” added Tomich, “another very critical driver may be the World Health Organization’s 2012 conclusion that diesel emissions are a ‘known’ carcinogen.”
New York City’s Department of Sanitation (DSNY) is the largest public hauler in the nation and its entrance into the CNG truck arena was closely watched. “DSNY, back in 1989, bought the very first CNG trucks in the country, which were clean but didn’t perform well.” said Energy Vision’s Underwood. But DSNY revisited the new technology, and, by the end of 2012, DSNY had 21 natural gas refuse trucks and 20 natural gas street sweepers. According to John J. Doherty, Commissioner of DSNY, “Because we are encouraged by the progress in compressed natural gas vehicles and engines over the past several years, DSNY is now working with all the key stakeholders to expand the availability of heavy-duty CNG fueling stations in and around NYC. They are paramount to our operation.”
Further CNG progress in the New York area happened in June when Clean Energy Fuels, the largest provider of natural gas fuel for transportation in North America and Covanta Energy, an owner of large-scale energy-from-waste plants, opened a CNG fueling station at Covanta’s Newark, New Jersey energy-from waste facility. The Newark station will supply fast-fill CNG to refuse trucks serving communities and businesses in Northern New Jersey and New York City. It was built as part of a nationwide plan between the two companies to expand CNG fueling infrastructure across the country.
Clean Energy’s vice president Ray Burke explained his company’s current fueling network and how CNG is suited to refuse fleets.” We have built, operate, maintain or supply approximately 360 natural gas fueling locations in 32 states within the United States, as well as in British Columbia and Ontario within Canada. In 2012 we built 70 LNG fueling stations as part of our America’s Natural Gas Highway and plan to complete another 30 to 50 stations this year.
“CNG is extremely well-suited for the refuse industry and other return-to-base fleets such as airports and transit vehicles that fuel their fleets overnight. In addition to the significant cost-savings of natural gas, communities benefit from lower greenhouse gas emissions and less noise. CNG refuse trucks run 23 percent cleaner and are up to 50 percent quieter than diesel engines.”
“It is estimated that approximately 60 percent of new refuse vehicles purchased this year with be fueled by natural gas. Time-fill stations service this market best and we expect expansion of this infrastructure to meet industry demand for cheaper, cleaner and abundant natural gas.
“The ROI timeframe varies by client based on numerous factors, but many of our customers who utilize large time-fill stations report savings of approximately $2 dollars per diesel-gallon-equivalent. This fuel-cost savings translates into an attractive ROI timeframe which is why the industry has adopted CNG so rapidly,” said Burke.
When asked about the downside to CNG for refuse trucks, Burke said, “There can be an increased electricity cost per-gallon attributed to customers running compressors during peak day times, though the industry’s wide-spread adoption of CNG fueling shows that such negatives are outweighed by the numerous positive aspects.”
The City of Phoenix, Arizona has recently embraced CNG in a big way. In May, Mayor Greg Stanton and other community leaders unveiled Phoenix’s new CNG solid waste trucks and a newly enhanced slow-fill fueling station. The city’s Public Works Department already operated 6 CNG solid waste trucks, but by mid-Summer, 20 percent of its solid waste trucks will be running on CNG, making Phoenix’s CNG fleet the largest in the state. By the summer of 2014, that percentage will increase to 30 percent, with a goal to increase numbers by 10 to 15 percent every year.
“Once our fleet is fully converted to CNG, the city will save almost $2 million annually,” said Mayor Stanton. “Lower fuel prices minimize future fee increases for trash and recycling collection, which have not been raised since March 2009.”
Phoenix’s Alternative Fuels Program is one of the largest in the country with nearly 3,600 vehicles or 56 percent operating on alternative/clean fuels.
In order to reduce America’s dependence on foreign oil, reduce emissions and greenhouse gases, federal, state, regional and local governments have established incentives to promote NGVs. These include tax deductions, credits, lower license and registration fees and lower sales taxes.
Aside from fuel savings, consider the fact that NG engines have improved significantly over the past decade, now exceed EPA emissions requirements ahead of schedule and prices for new vehicles are dropping due to a competitive market, CNG has much to offer solid waste fleet operators and the communities they serve.