Whatever Happened to CNG?

Five or six years ago, the show floor at the ACT Expo was populated with compressed natural gas (CNG) suppliers and vendors. That’s changed. “We’re an electric show this year,” said ACT Expo producer Erik Neandross, CEO of GNA, in his opening remarks for the 2018 show. Indeed, the event’s name changed in 2016 from Alternative Clean Transportation Expo to Advanced Clean Transportation Expo to reflect the market evolution.

Vendors in the CNG market are evolving as well. Trillium CNG, a unit of Love’s Travel Stops, announced at this year’s ACT Expo a name change to Trillium, as the company embarks on developing EV charging infrastructure with a charging provider.

At this year’s Work Truck Show, aftermarket CNG system installer Venchurs Vehicle Systems announced that the company is now offering upfit services to non-fuel solutions. The players servicing the passenger car market for CNG in 2013 have moved on to other options.

However, there is momentum for natural gas in the medium- and heavy-duty markets, with much of it centered on renewable natural gas (RNG). RNG is a biogas, essentially biomethane, made from agricultural waste, sewage, and other organic wastes. The result is near zero NOx emissions.

States with pollution issues, particularly California, are furthering this momentum. As most NOx is generated by heavy-duty freight, air quality boards such as California’s Air Resource Board (CARB) are keen to implement clean solutions and are incentivizing companies to do so. CARB’s mandate is to reduce NOx emissions by 45% in the state by 2025 to achieve federal air quality attainment targets — no small task.

RNG becomes more compelling considering Renewable Identification Numbers (RINs), which are assigned to all types of biofuel batches. RINs allow alt-fuels such as RNG to be traded and blended into pipelines with traditionally produced CNG. RINs are often more valuable than the fuel batch they’re assigned to, creating a market for traders.

Like the adoption of any alternative fuel, the cost equation is still front and center for fleets. Plummeting oil prices and high infrastructure costs were the main reasons the market was disrupted in the first place.

The infrastructure question is being answered with creative solutions such as the CNG “virtual pipeline,” which involves transporting natural gas to remote locations where gas lines aren’t available. A virtual pipeline can reduce start-up costs from more than a million down to low six figures. (Some don’t see this as a sustainable solution, particularly in regions in which gas lines would never be feasible to install.)

Compressor technology has advanced as well. A compressor developed by Simple-Fill Inc. uses liquid pistons, virtually eliminating moving parts, and is leak proof. This drastically reduces compressor costs from several hundreds of thousands of dollars to about $150,000 with a time fill post, says Rob Underhill, president and CEO of Simple-Fill. “This now makes CNG more attractive to medium-sized and even smaller fleets,” he says.

That’s not chump change, particularly in contrast to propane-powered fleets, which can install subsidized above-ground storage tanks and fueling depots for a fraction of doing the same with CNG.

However, fleets in California can apply for a Carl Moyer grant, which can recoup up to 50% of their incremental costs for CNG. And Underhill points out that the diesel gallon equivalent (DGE) for CNG runs about $1.35 wholesale to $2.10 retail, with little price volatility compared to refinery-sourced propane, which is tied to oil prices.

In talking to fleet managers at ACT Expo and the Work Truck Show this year, issues with diesel particulate filters and diesel maintenance have raised aggravation to new levels. “We’ve got a big target on diesel,” Underhill says.

Yet federal investment money is not in natural gas right now. For Underhill, this falls short in creating a comprehensive clean energy policy, particularly as electrification, the shiny new thing in medium- and heavy-duty applications, simply isn’t financially viable yet. With CNG, government dollars could help push fleets to adoption and put them on a timeline for a return on investment.

“We don’t believe that CNG is the ‘end all be all’ to our transportation problems but we do believe that CNG has a seat at the table and it needs to be a part of any energy policy that this country puts forward,” he says. “But unfortunately there is not a level playing field today.”

Still, Underhill believes that CNG can make sense on its own without government incentives, particularly in medium- to heavy-duty applications requiring heavy utilization. “And some circumstances it can’t,” he says. “It’s all about matching the alternative fuel or power with the duty cycle.”

Underhill and others point to Cummins Westport’s near-zero natural gas heavy-duty engines as another game changer. Cummins Westport expects to sell 7,000 to 10,000 of these engines in 2018; a small number compared to overall sales, but steps toward advancing the renewables market.

With cost reductions in infrastructure combined with RNG and its promise of near zero emissions, the natural gas market has a renewed energy, so to speak. Now it’s about making people listen. “Elon Musk has done a masterful job at marketing his company,” Underhill says. “There is no one on the CNG side who has that market presence.”

Who is willing to step to the microphone?