Followers | 23 |
Posts | 8555 |
Boards Moderated | 2 |
Alias Born | 08/17/2015 |
Monday, November 09, 2015 8:40:41 AM
Nov 5 (Reuters) - Sales of trucks powered by natural gas are sputtering and growth will be far weaker this year than last as tumbling diesel prices prevent drivers from switching over to the cleaner-burning fuel even though it is cheaper than it has been in years.
Sales of medium and heavy duty natural gas trucks are expected to rise less than 1 percent this year after climbing nearly 27 percent in 2014, Power Systems Research, a St. Paul, Minnesota firm that studies engines, told Reuters. It cut that projection from about 4 percent earlier this year.
Lured by lower fuel prices and the desire to please increasingly emissions-conscious customers, the trucking industry in recent years has been adopting natural gas as a fuel source despite far higher costs for the trucks.
But now oil's more than 50 percent drop in the last 16 months is setting back the natural gas truck market by several years.
"Adoption rates of natural gas engines will ultimately depend on the price of diesel fuel," said Jim Downey, a vice president at Power Systems Research, which now thinks it will take until at least 2020 for 4 or 5 percent of U.S. trucks to run on natural gas, not 2016 or 2017 as previously projected.
A few thousand natural gas vehicles are sold each year for long haul trucking in the United States, compared with some 3.4 million class 8 trucks - the heaviest duty truck classification - on the roads.
Though benchmark U.S. natural gas has tumbled by more than 20 percent since late September to around $2 per million Btu on some days, the cost savings of using natural gas versus diesel is narrower than it was a year ago.
That benefit has dwindled to about 15 cents a gallon, down from 50 cents a gallon a year ago, said Raymond James analyst Pavel Molchanov.
When potential buyers factor in the tens of thousands of extra dollars for natural gas trucks, the switch doesn't make sense as it used to for many.
"I don't know of anyone looking at it for monetary reasons anymore," said Kurt Palmer, director of sales for the leasing arm of Palmer Trucks, a Kenworth truck dealer with locations in Indiana and Ohio. "It slowed almost to a crawl, and for a while it was the hottest thing going."
Palmer Trucks has sold or leased about 70 natural gas trucks this year, down from about 100 last year, Palmer said, adding that most business this year was from existing customers replacing older trucks, not people switching to natural gas.
Contract Transport Services LLC, a regional trucking company in Green Bay, Wisconsin, has added 31 natural gas trucks to its 147-truck fleet since 2013 but is holding off on adding more.
"If diesel was at $3.85 a gallon I'd still be buying them," CTS President Curt Reitz said. Diesel is now around $2.30 a gallon in the Midwest.
Westport Innovations Inc, a Vancouver-based manufacturer of engines for natural gas vehicles, expects its U.S. business to be about flat this year.
"The U.S. market is going to continue to be a slow rise," Chief Executive David Demers said.
Despite the gloomy outlook among buyers and manufacturers, fuel supplier Clean Energy Fuels Corp said natural gas pricing guaranteed in long-term contracts appeals to many.
Fleets "almost prefer stability over low prices so that they can properly budget," spokesman Gary Foster said.
Dillon Transport Inc, based in Illinois, is still buying natural gas trucks because its customers require lower-emission vehicles. But the time it takes the company to recoup the additional investment has doubled to 3 years.
"We are still drinking the Kool-Aid," said Phil Crofts, Dillon's director of marketing.
Recent CLNE News
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 05/09/2024 08:16:18 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/09/2024 08:10:54 PM
- Clean Energy Reports Revenue of $103.7 Million and 58.0 Million RNG Gallons Sold for the First Quarter of 2024 • Business Wire • 05/09/2024 08:05:00 PM
- Clean Energy Announces First Injection of Renewable Natural Gas at Victory Farms Dairy • Business Wire • 04/23/2024 10:30:00 AM
- Clean Energy to Report First Quarter 2024 Financial Results on May 9; Conference Call to Follow at 1:30 p.m. Pacific Time • Business Wire • 04/12/2024 12:00:00 PM
- Clean Energy Appoints Patrick J. Ford to Board of Directors • Business Wire • 03/28/2024 10:30:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/06/2024 11:53:38 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/06/2024 11:51:49 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/06/2024 11:50:25 PM
- Clean Energy Reports Revenue of $106.9 Million and 57.0 Million RNG Gallons Sold for the Fourth Quarter of 2023 • Business Wire • 02/27/2024 09:05:00 PM
- Clean Energy Turns DFW Area into a Renewable Natural Gas Hub • Business Wire • 02/26/2024 11:30:00 AM
- Clean Energy’s Renewable Natural Gas Facility at Marshall Ridge Dairy in Iowa Begins Production • Business Wire • 02/14/2024 11:30:00 AM
- Clean Energy’s Renewable Natural Gas Digester at Tri-Cross Dairy Begins Production • Business Wire • 02/08/2024 11:30:00 AM
- Clean Energy to Report Fourth Quarter 2023 Financial Results on February 27; Conference Call to Follow at 1:30 p.m. Pacific Time • Business Wire • 01/29/2024 01:30:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 01/23/2024 09:56:45 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 01/23/2024 08:47:07 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 01/23/2024 08:41:21 PM
- Clean Energy Begins Producing Renewable Natural Gas at Latest Project • Business Wire • 01/11/2024 11:30:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 12/13/2023 11:35:17 AM
- Clean Energy Announces Up to $400 Million in Financing with Stonepeak to Continue Expansion of Renewable Natural Gas Infrastructure • Business Wire • 12/13/2023 11:30:00 AM
- Clean Energy Opens Renewable Natural Gas Fueling Station in Baltimore • Business Wire • 11/21/2023 11:30:00 AM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 11/09/2023 09:16:08 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 11/09/2023 09:10:30 PM
- Clean Energy Reports Revenue of $95.6 Million and 56.7 Million RNG Gallons Sold for the Third Quarter of 2023 • Business Wire • 11/09/2023 09:05:00 PM
- Clean Energy’s First Renewable Natural Gas Facility Begins to Sell Environmental Credits • Business Wire • 10/31/2023 10:30:00 AM
Avant Technologies Equipping AI-Managed Data Center with High Performance Computing Systems • AVAI • May 10, 2024 8:00 AM
VAYK Discloses Strategic Conversation on Potential Acquisition of $4 Million Home Service Business • VAYK • May 9, 2024 9:00 AM
Bantec's Howco Awarded $4.19 Million Dollar U.S. Department of Defense Contract • BANT • May 8, 2024 10:00 AM
Element79 Gold Corp Successfully Closes Maverick Springs Option Agreement • ELEM • May 8, 2024 9:05 AM
Kona Gold Beverages, Inc. Achieves April Revenues Exceeding $586,000 • KGKG • May 8, 2024 8:30 AM
Epazz plans to spin off Galaxy Batteries Inc. • EPAZ • May 8, 2024 7:05 AM