Followers | 24 |
Posts | 9125 |
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
- Clean Energy to Build First Private Natural Gas Fueling Station for Houston METRO • Business Wire • 09/26/2024 10:30:00 AM
- J.B. Hunt kicks off Clean Energy’s Class 8 demo truck program equipped with Cummins X15N powered by ultraclean RNG • Business Wire • 09/16/2024 10:30:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/07/2024 08:11:13 PM
- Clean Energy Reports Revenue of $98.0 Million and 57.1 Million RNG Gallons Sold for the Second Quarter of 2024 • Business Wire • 08/07/2024 08:05:00 PM
- Clean Energy’s Latest RNG Production Facility at Minnesota Dairy Begins Injecting Into Pipeline • Business Wire • 08/05/2024 10:30:00 AM
- Clean Energy Opens Clean-fuel RNG Station in Davenport, Florida • Business Wire • 07/31/2024 10:30:00 AM
- Clean Energy’s RNG Production Facility Breaks Ground at South Fork Dairy • Business Wire • 07/24/2024 10:30:00 AM
- Clean Energy to Report Second Quarter 2024 Financial Results on August 7; Conference Call to Follow at 1:30 p.m. Pacific Time • Business Wire • 07/16/2024 12:00:00 PM
- Clean Energy Opens Renewable Natural Gas Station in Philadelphia - South Jersey Area to Serve Fleets • Business Wire • 06/25/2024 10:30:00 AM
- Municipalities Adopt Cleaner Solutions Inking Agreements with Clean Energy • Business Wire • 06/20/2024 10:30:00 AM
- Clean Energy Expands Boron LNG Plant Capacity to Accommodate Increased Demand for Cleaner Fuel Driven by Pasha Hawaii Container Ships • Business Wire • 06/11/2024 10:30:00 AM
- Clean Energy Expands Fueling Footprint in So. California • Business Wire • 06/04/2024 10:30:00 AM
- Cemex US Signs Renewable Natural Gas Fuel Agreement with Clean Energy to Power Fleet in Southern California • Business Wire • 05/30/2024 10:30:00 AM
- Bi-Partisan Bill Introduced in U.S. Senate to Encourage the Use of Ultra-Low Carbon RNG in Transportation • Business Wire • 05/23/2024 10:30:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/20/2024 08:46:22 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/20/2024 08:42:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/20/2024 08:37:33 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/20/2024 08:08:50 PM
- Form S-8 - Securities to be offered to employees in employee benefit plans • Edgar (US Regulatory) • 05/16/2024 09:30:14 PM
- Clean Energy and Maas Energy Works Join Forces to Build Nine Renewable Natural Gas Dairy Production Facilities Across Seven States • Business Wire • 05/14/2024 10:30:00 AM
- 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
Maybacks Global Entertainment and Lingerie Fighting Championships Enter Into Broadcast And Revenue Sharing Agreement • AHRO • Sep 26, 2024 8:30 AM
North Bay Resources Commences Operations at Bishop Gold Mill, Inyo County, California; Engages Sabean Group Management Consulting • NBRI • Sep 25, 2024 9:15 AM
CEO David B. Dorwart Anticipates a Bright Future at Good Gaming Inc. Through His Most Recent Shareholder Update • GMER • Sep 25, 2024 8:30 AM
Cannabix Technologies and Omega Laboratories Inc. Advance Marijuana Breathalyzer Technology - Dr. Bruce Goldberger to Present at Society of Forensic Toxicologists Conference • BLOZF • Sep 24, 2024 8:50 AM
Integrated Ventures, Inc Announces Strategic Partnership For GLP-1 (Semaglutide) Procurement Through MedWell USA, LLC. • INTV • Sep 24, 2024 8:45 AM
Avant Technologies Accelerates Creation of AI-Powered Platform to Revolutionize Patient Care • AVAI • Sep 24, 2024 8:00 AM