HOUSTON The trucking
industry isnt likely to significantly bolster natural gas
demand in the near term, according to one industry
Only about 6 percent of truckers
plan to purchase equipment necessary to make their trucks run
on liquefied natural gas (LNG), according to Greg Burns,
president and chairman of PLS Logistics Services Inc.
Still, thats up from a
mere 1 percent last year, Burns said, citing data compiled in
survey by the Cranberry Township, Pa.-based company. "The
emphasis is ... more on potential than people jumping into the
swimming pool," he said during a presentation about liquefied
natural gas (LNG) technology and the transportation sector at
AMMs 6th annual Steel Tube and Pipe Conference
in Houston. "The technology, in our opinion, is viable. ... But
there is a ways to go."
The biggest obstacles to
widespread adoption of LNG-powered trucks continue to be the
cost of buying or retooling trucks to run on natural gas
instead of diesel and concerns about limited LNG refueling
infrastructure, Burns said.
In the companys 2013
survey, 46 percent of respondents cited infrastructure as their
primary obstacle to adopting LNG, down from 53 percent in last
years survey. An additional 41 percent cited cost as the
biggest hurdle, up from 24 percent last year.
It can cost more than $30,000 to
retool a truck to run on LNG. Thats a big figure in a
highly fragmented and "thinly capitalized" industry, Burns
Another potential catch is that
while a majority of trucking companies believe that LNG
technology could be widely adopted, larger companies tend to be
more bullish than the smaller platers that make up the heart of
the trucking industry.
In addition, LNG adds weight to
trucks, which reduces payload and revenue and decreases
horsepower, he added.
And while truckers appear to be
more closely exploring the possibility of adopting LNG, their
customersmostly companies moving heavy industrial
commodities such as copper or steel coilsarent
doing much to promote LNG themselves, Burns said. That might
unwise, given that diesel costs are expected to continue to
rise over the long term, he said.
Still, Burns took a positive
view of the trend. As people realize that LNG filling
infrastructure exists and continues to be built, "they are
focusing on the dollars and cents of what these rigs cost," he
While it might not be possible
to switch entire supply chains to LNG-powered trucks, "chunks"
of the chain could be switched over as LNG infrastructure
expands, Burns said. And any savings on fuel could be
important, especially with both fuel and laborthe main
costs in the trucking industryshowing no signs of easing
in the near term, he said.
"Its not if youre
going to be paying more for transportation; its how much
more," Burns said.
Truck drivers are retiring from
the industry at a faster pace than new drivers are entering it,
in part because of compensation: The job pays between $40,000
and $50,000 on average, Burns said. "Those wages need to go up.
And they are going to go up sharp and hard," he said, adding
that inflationary fuel and labor costs are already "locked and
loaded" and ready to hit the industry.