MISSISSAUGA, Ont. – Being cheap, plentiful and producing fewer greenhouse gas emissions than diesel, natural gas is becoming more and more attractive to fleet operators, but many in the industry still have questions about how it can best be used.
In an attempt to provide some answers, Go With Natural Gas, a collaborative industry-government initiative, has been holding a series of information seminars across the country. Today the presentation came to the Toronto-area.
Pierre Ducharme, eastern hub manager for the initiative opened the seminar with an explanation of why natural gas seems to be the hot topic of the day. With the energy industry estimating over 100 years’ reserve of shale gas, and a weaker demand for Canadian natural gas in the US (thanks to its own shale gas deposits) leading to dropping prices, the energy industry needs a new market.
“With transportation using one-third of all the energy consumed in Canada, it is not a big surprise energy suppliers are now turning to the transportation industry as an outlet for natural gas. That explains in large part, why you are hearing more and more about natural gas.”
Marketing push aside Ducharme explained why transportation companies are beginning to look seriously at the fuel source. He said it comes down to dollars and sense.
“In one barrel of oil, that will cost you anywhere between $95 and $105 nowadays—and that’s the price of the commodity, not the diesel price—there are 5.8 million billion BTUs of natural gas. That’s the equivalent of $23 at today’s price of $4 per million. That’s a big driver,” he said.
“Another significant change is now we’ve got natural gas vehicles with much improved performance. We are now working on the fourth generation of natural gas engines, and their performance can match the performance of comparable diesel engines.”
Along with the development of diesels engines, improvements which he said were built on the foundations laid by Vancouver, B.C.-based Westport Innovations in the 1980s with its heavy duty natural gas bus engines, Ducharme explained that storage cylinder technology has also matured.
“Lightweight containers. We used to have to store natural gas in heavy steel cylinders, and those cylinders needed to be inspected on a regular basis for hydrostatic test and for visual tests. Now we work with a new generation of cylinders with a plastic or aluminum core that are wrapped with carbon fibre, making them very, very strong.”
He explained that compressed natural gas (CNG) is best used for fleets operating regular return-to-base routes, while liquefied natural gas (LNG) is a better fuel for long distance fleets, as long as there are filling stations at both ends.
“Aside from the economics, there are also emissions benefits. Greenhouse gas emissions on a well-to-wheel basis, compared to diesel, there are 15-25% less emissions. A natural gas highway tractor that operates 200,000km per year will produce 65 tonnes less carbon with natural gas than it does with diesel. On top of that there is no evaporation with natural gas, and there is no risk of gas spilling or seeping into the water table or the ground with natural gas,” said Ducharme.
So far, Ducharme said the waste and refuse sector has been the quickest to adopt natural gas vehicles.
“There are now more than 300 trucks in use compared to only a handful a few years ago. In most cases, the trucks are going in at the rate of 25 per site at the same time, and 25 justifies the installation of a dedicated refueling stations,” he said.
“The highway tractor segment has been the next fastest growing in the country. There are an estimated 200 highway tractors operating in four provinces to date. While all the adoption in Canada to date has been with LNG tractors, CNG tractors are also possible, depending on their duty cycle. Many fleets in the US are involved in CNG highway tractors, provided their driving range needs are met.”
In order to ensure Canadian fleet operators understand how to work with natural gas safely, a series of training courses will be offered beginning in April. Topics covered will include general awareness, fleet operations, LNG refueling, CNG refueling, CNG cylinder inspection, LNG tank inspection, CNG vehicle servicing and LNG vehicle servicing. First responder training will also be offered.
“It’s not a fad. It’s not something that is today’s flavour or colour. It’s a trend that is here to stay.”
Rob Dysiewicz, manager of NGT sales and marketing at gas utility company Enbridge, said the utility runs a large fleet of natural gas vehicles (including passenger cars). Out of more than 800 vehicles, 600-plus are either dual-fuel or dedicated natural-gas systems. And it has been using the alt-fuel vehicles since the 1980s.
“Out of 600-plus vehicles, our annual fuel savings total to be about $1 million—significantly more in the last couple of years since the price of gas has dropped to pretty much nothing. We’ve learned our lessons and are glad we persevered because today we sit with an infrastructure and a vehicle fleet that is providing us with a financial savings that is good for the rate payer, and you as a client, but we also have a positive impact on the environment,” he said, adding that fuel savings with natural gas are fairly predictable and consistent.
“The rough rule of thumb is about a 40% savings in what you would be paying today in your fuel. That remains consistent for all of North America, although it varies based on what fueling option you choose. Ultimately we’re seeing a price of about 60 cents a diesel litre equivalent in terms of the price in your tank.”
Dysiewicz said that one of the advantages to operating natural gas fleets is it makes it easier for carriers to meet green and environmental conditions of tendered projects.
“We are seeing a lot more contracts being awarded to companies that offer either a percentage of, or all of their services with some sort of a greener fuel.”
He also suggested it makes good business practice to lock in fuel prices that correspond to contracts being bid upon.
“The other component of the fuel cost savings is you can have those savings extend for the term of the contract. For example in the refuse industry, the contract is awarded for a period of time—seven, or eight or nine years—and with the way contracts can be structured today for the commodity itself, you can lock in the price of natural ga
s for that same duration of time. So now you have a perfect storm. You’ve been able to lock your price for the commodity for the duration of the contract, making the fueling costs pretty consistent. There is a component of electricity to operate the compressors, but outside of that it’s a regular maintenance schedule and it’s well-understood. As utilities, we’ve been compressing natural gas for various needs since the inception. The technology is very well-proven.”
In addition to talking about natural gas’ advantages, Dysiewicz did address some of the concerns that fleet operators may have about natural gas.
“Yes,” he said, “there is a little bit of a mileage penalty. OEMs will talk about a 10% reduction. We’re a little bit more conservative. About 12% is what we’re seeing in our fleet in terms of efficiency losses.”
He said some operators are worried about the financial hits they will take by adding more expensive natural gas trucks into their fleets, but dismissed those worries by explaining that even with a premium of up to $40,000 on a new truck, it is possible to get a payback on the investment in two-to-three years for CNG and five years for LNG on heavy duty trucks.
As for concerns about financing and prices for used natural gas trucks, Dysiewicz said those are being addressed in the market.
“The main anxiety point we’re hearing is residual values of vehicles. They’re well understood with traditional Class 8 vehicles on diesel, but not so well understood on natural gas. Is there a resale market? What does that market look like? What do I do when that vehicle reaches its end life?
“I can tell you for sure there are finance companies—GE Capital being one—that are looking at this in some shape or form. They are willing to guarantee the residual value of those vehicles if you speak with them. I think that’s very positive for the industry. It is eliminating that last unknown that still exists.
“The same is true for your [refueling] station. You will find there are companies out there willing to finance that station for you in exchange for a long-term contract for fuel use. So the impact is maybe a little bit higher per litre pricing at the pump, but you probably can find somebody to do that for you at no cost.”
He said that Enbridge itself has even been known to buy a station from a provider and rent it back to the customer. A station suitably sized to serve a large fleet could cost up to $500,000 to build. A station to serve a single vehicle is approximately $7,000.
“But honestly, the payback periods are so aggressively positive most clients don’t really want that option. They want to own it outright because of the fuel savings and what they can derive long-term.”
Dysiewicz said there is one supposed disadvantage that has proven to be a needless worry: cold weather operations.
“We had one of the coldest winters. Some concerns in the past were based on natural gas engines running differently in colder temperatures. But they’ve all been put to a test this year. Operators in Barrie and in Hamilton, refuse companies operate every day and start early in the morning. They have seen the extremes of temperatures, and so far we’ve had minimal failures or issues with those engines. I think two in total out of a fleet of 100 vehicles have experienced a failure of a cylinder. And the manufacturers looked after those with warranties. Overall they’ve performed phenomenally, especially when compared against their diesel counterparts that sometimes tend to be a little difficult to start in colder temperatures. They’ve operated as well or a little bit better than their counterparts, so that’s very encouraging for us.”
Christoph Horn, Cummins Canada’s territory manager for the province of Ontario introduced the audience to the two Cummins Westport engines currently on the market—the ISL G 8.9 and ISX12 G heavy duty—and mentioned that the 6.7L ISB G (which will likely be rated up to 55,000lbs and will be suitable for P&D operations and for powering school buses) has been bumped back to a Q1 2016 released.
In addition to talking horsepower and torque curve specs, he also explained some of the basics of natural gas engine technology and spoke about how and why natural gas maintenance requirements.
“Maintenance costs are something that should not be ignored. Maintenance costs are higher with a natural gas engine compared with an engine operating on diesel fuel,” he said.
“We have spark plugs on these engines which need to be replaced. We have a two-valve head which requires an over-head set more frequently. We also have special lubricating oil in the engine that is different than the lubricating oil that is used in a diesel engine, and which can be more expensive.”
Horn also said it’s important to properly spec a natural gas vehicle to ensure it operates optimally in its working environment, for example in cold weather climates.
“When spec’ing your vehicle be sure to work with your dealer to ensure the correct winterization options are put on the vehicle. We do need to keep the engine warm. It is essentially a carbureted engine so there are some items to consider that would not be put on a typical diesel engine, which is direct injection. So you might need coolant heaters, oil heaters, battery heaters. It’s all important to consider.”
Compression Technology Corp. (CTC)
Tim Sanford, director of sales for CTC, a company which distributes natural gas compressors, told attendees if they want to install a vehicle refueling station they need to have patience.
“There are a few factors. Typically the turnaround time is between 20 and 30 weeks. One of the major factors is, is there natural gas on site,” said Sanford
If a pressure upgrade is required, utility companies like Enbridge prefer at least a six month notice, but warn that it could take up to a year by the time permits are approved, environmental studies have been done and equipment has been ordered and delivered.
Sanford added that for smaller stations that don’t require a pressure upgrade on the natural gas lines, project completion times can be as short as six weeks to ten weeks.
“But when you have to get the TSA involved, then you’re probably looking at 26-weeks plus. And if there’s a pressure upgrade it could be further out.
“Most of the compressors we offer through o
ur line will allow for quicker turnaround because they can run off the lower pressure, but for some really large fleets, we may want to see about 25-30psi available at the site,” he said, noting smaller operations can get by with between five and 15 psi of pressure.
If a long, extended project seems like too much to take on, Sanford said there was no reason why a company couldn’t start with a less complicated installation.
“You can start off with very small compression and grow your fleet. Recently we had a customer on the refuse side put in a very low-cost station. Roughly around the $30,000-$35,000 mark for the equipment and to get their initial vehicle up and going. After that, we’ll be growing them into a larger station. But it allows them the opportunity to trial and to get comfortable. As their fleet grows, they’ll be able to expand further.
To give an idea of the cost for a larger refueling station, Sanford estimated the installed cost for a time-fill station for 10 refuse trucks would run between $350,000 and $400,000.
ENN Canada Corp.
Phil Carrick, national accounts manager for ENN Corp, spoke about the company’s plans to make LNG more popular. ENN was founded in China and has operated in Canada since 2012, with offices in Mississauga and Calgary. It offers mobile fueling stations, such as the ones located in Woodstock, Ont., and Merritt and Chilliwack, B.C. ENN also ruins permanent stations in Ontario and B.C. ENN also said it has contracts to build LNG manufacturing plants in B.C. and Alberta.
According to Carrick, it will take industry-wide co-operation and effort to make LNG a more feasible alternative.
“We need everybody’s help to make all of this work. On the maintenance side, companies that are going to repair the LNG trucks. On the supply side, where we come in, the OEMs that manufacture the engines, the financials like GE who seem to be taking a very progressive approach to the industry, infrastructure—we’ve got to build the stations or else nobody is going to come. And education, which seems to be one of the biggest obstacles because so many people don’t know anything about natural gas. It’s difficult for them understand and embrace this new technology. But the technology is here and I want everybody to embrace it.”
ENN brought one of its mobile refueling stations to workshop. The tanker can hold 16,000 gallons which can fuel up to 40 trucks per day. (It also has a 6,000 gallon unit.) It can be used as a quick-deployment solution for a private fleet or as a temporary measure to trial new retail locations to see if they are popular enough to sustain a permanent installation. The truck has a single dispenser attached so it can fill one truck at a time.
Greg Stephanian, a design engineer with alternative fuel consulting company Change Energy, reminded the audience that fleets need to consider their facilities if they are considering adopting natural gas vehicles.
“The first thing you need to do if you’re looking at a facility, be it new or a retrofit of an existing facility, is determine the types of vehicles you’re going to be maintaining or servicing. If it’s going to be CNG vehicles primary, or both CNG or LNG. You want to look at that because CNG gas has one set of characteristics you need to deal with. LNG has all those characteristics plus the fact it’s a liquid and if there is an LNG spill of any significance, it will initially spill out as a liquid. It will pool and go into low spots, and service pits and sewers. And as it absorbs heat from the environment, it will convert to a gas vapour, and will rise to the high spots.”
The building design will play an important role in what safety procedures and equipment will be required. For example, Stephanian discussed how different rooflines will require different approaches to safety.
“Is the roof of your maintenance facility an open-trussed flat roof? In that case, it’s relatively easy to put some gas detection and monitoring up top and ventilate that space out. Or does it have peaks and irregular space where natural gas would rise and pocket?”
He also said that because the use of the natural gas isn’t yet commonplace, there will be a mix of guidelines and standards, with some cities and regions having well-defined rules and procedures and others not being as familiar with what codes and standards they need to reference.
He also offered a couple of reminders about the nature of natural gas and how to keep safe when working with the fuel.
“Concentration of natural gas in air typically needs to be around four or five per cent by volume for the lower flammability limit, up to about 15% on the higher flammability limit, so it’s got a fairly small flammability range, and we use that to our advantage in making sure your facilities are safe by having the natural gas detectors alarm at about 20% of that lower limit and shut down your system at 40% of that lower limit so we never exceed the lower flammability limits, so you’re not getting into the areas where you’re going to be concerned with actually having a flammable concentration in your facility even if you have a leak.”