Making the Change to Natural Gas in Trucking Fleets. Challenges and Opportunities

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1 Making the Change to Natural Gas in Trucking Fleets Challenges and Opportunities Greg Fulton Colorado Motor Carriers Association October, 2013

2 Overview of the Colorado Motor Carriers Association (CMCA) l Over 600 companies and growing with members in every area of the State of Colorado l Member companies include large corporations such as UPS and FedEx down to very small companies of 5 or less employees l Member companies employ over 80,000 people within the state l Provide a wide range of training and other educational opportunities l Represent Colorado trucking interests at the local, state, and national levels l Long history in working and supporting alternative fuels

3 Facts About Trucking in Colorado l 80% of the manufactured freight. commodities are transported by truck l 81% of the communities in the Colorado are exclusively served by truck May, 2009

4 Trucks and Air Quality Tremendous reductions in emissions for Heavy-duty Highway Diesel Engines

5 Future of Natural Gas and Trucking It s not a matter of whether trucking will embrace natural gas as a major fuel in our industry but when. Bill Graves, President and CEO American Trucking Associations

6 Trucking Industry Willing to Change Ex. - EPA SmartWay Program Fuel Savings Since Inception

7 Current Status of Natural Gas and Trucking (Class 6 8) l % or < 40,000 trucks using CNG or LNG l 1047 CNG stations and 53 LNG stations of 157,000 stations selling fuel l 2017 Est. Range 4% to 10% depending upon market conditions (400,000 to 900,000 trucks) l 2050 Est. 40% to 50% 0f Truck Market Improved

8 Reasons that Trucking Fleets are Looking at Natural Gas Vehicles Fuel Cost Significantly less - $1 to $2 per DGE and Greater Price Stability than diesel (fuel economy twice as great) Environmental Considerations interest in reducing GHG, overall emissions Energy Independence interest in supporting US energy development Economic Development and Jobs Energy activity in the US benefits the economy and creates jobs more freight is generated for movement Public Image Be viewed as a Green Business to Shippers/Public Incentives and Grants - Tax incentives and govt grants have helped to offset initial cost and reduce overall risks

9 Obstacles to Acceptance for Natural Gas by Trucking Fleets Lack of Good, Consistent Information as to Natural Gas Vehicles and Infrastructure Fact vs. Fiction Cost of Equipment 20% to 100% greater than diesel equivalent Engine Technology Limited number of engines in heavy duty truck market (12L and 15L) as well as limited experience.???s on Torque and power Fueling Infrastructure Need for not only access across the country but a competitive infrastructure Service Infrastructure Lack of technicians, significant costs associated with modifying facilities to service NGVs ($50K to $200K per service bay) Residual Value of Truck What will be the value of the vehicle for trade-in or sales after five or six years

10 Other Issues Ø Weight NG Tanks add up to 1,000 more pounds Ø New Diesels Becoming More Fuel Efficient and Cleaner extends the ROI and also less benefit from emission reductions Ø Refueling Time will take more time and with new HOS, this is a concern Ø Concerns over Long Term Prospects Threats to fracking process and its impact on availability and price, possibility of export of natural gas which would raise price and affect diesel differential Ø Lack of Incentives and Grants at Federal Level and in many States for HDTs

11 Use of CNG vs LNG in Private Trucking Fleets in Colo. CNG used more for local and regional use Fleets using it in Colo. WM, Mile Hi Foods, Alpine Waste, UPS LNG used for longer haul operations Fleets using it in Colo. UPS, DFA, Renewable Fibers

12 CMCA Approach to Environmental Issues 1) Work collaboratively with others including govt., local communities, environmental groups, and other industry groups 2) Be proactive try to get ahead of the problem 3) Seek win-win solutions 4) Think and look out of the box 5) Be open to new ideas 6) Listen, learn, inform 7) Encourage incentives vs. mandates better results

13 CMCA 10 Point Plan for Truck Emissions Reduction 1. Create an Incentive oriented Program to Retire and Scrap Pre-1990 Trucks 2. Generate Greater Support and Participation in the EPA SmartWay Program 3. Support New Fuel efficiency Standards for Heavy Trucks (20% improvement by 2018) 4. Provide Incentives for Acquisition of Emission and Fuel Reduction Technologies (SmartWay Strategies) 5. Utilize Public-private Partnerships to Help Reduce Emissions

14 CMCA 10 Point Plan for Truck Emissions Reduction 6. Provide Outreach Assistance to Improve Efficiency of Smaller Fleets and Reduce Emissions 7. Support actions to reduce the carbon footprint of trucking companies by improved driving techniques 8. Support transformational trucks capable of carrying more weight while reducing vehicles and overall emissions. 9. Develop More Targeted Effort for Emission Testing and Compliance 10. Provide Grant Funding for Retrofitting of Older On and Off-road Equipment to Reduce Emissions

15 If you got it, a truck brought it. Thank You

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