LNG replacing diesel? Not for a long, long while
Natural gas struggles to expand in the transportation industry
All the elements seemed right for the experiment to work.
Bison Transport purchased 15 liquefied natural gas (LNG) trucks and ran them back and forth from Calgary to Edmonton. The trucking company partnered with Shell to provide fuel stations to fill up.
The motivation was obvious as the company expected to save 30 per cent on fuel costs with LNG trucks compared to diesel, and produce 30 per cent fewer emissions.
The industry is still chicken and egg for sure- Travis Balaski , Ferus
But after two years, and more than 1.5 million kilometres travelled, Bison Transport hit the brakes.
The trucks were sold and the pilot project was shelved.
LNG has long been hailed as a potential game changer for the transportation industry, but the technology is still fledging.
The main problems for Bison Transport were the cost to convert its trucks, higher than expected operating expenses and the fuel economy. The return on investment was taking longer than forecast because of low fuel economy and maintenance costs twice as high as diesel trucks.
CN tried a similar experiment running two LNG locomotives between Edmonton and Fort McMurray for 12 months in 2012-2013, and again in August 2015 — that project was also not sustainable.
"CN will need more long-term LNG tests and to see more industry research and development work proving the rail technology employing natural gas is effective and economic," said spokesman Mark Hallman in an email.
LNG on the road
Not all experiments with LNG have failed. Currently, at least eight different companies across the country use natural gas powered trucks and buses, according to the Canadian Natural Gas Vehicle Alliance. Groupe Robert trucking in Quebec runs 125 trucks on LNG.
When Bison Transport put up its LNG trucks for sale, they were bought by Vedder Transport in B.C., which was already running 50 of its trucks on natural gas.
Vedder Transport's experience with LNG seems remarkably different, as it says maintenance costs and performance have not been an issue.
The LNG industry is much larger south of the border, where more than 150,000 vehicles use the fuel, according the U.S. government's department of energy.
"In Western Canada right now, the over the road transportation business is challenged because we don't have a lot of infrastructure built and there isn't a lot of viable engine technologies for the Western Canadian market," said Travis Balaski, an executive with Calgary-based natural gas company Ferus.
Ferus operates its own LNG plant near Grande Prairie, Alta., which produces about 190,000 litres of the fuel. That's the equivalent of about 110,00 litres of diesel, according to Ferus. The company ships most of the LNG for use in the oil and gas industry to fuel drilling rigs, pressure pumping services, heavy-duty trucks and remote power generation. Ferus also has some of its own pickup trucks and semi trucks that run on natural gas.
"The industry is still chicken and egg for sure," said Balaski. "I don't think we're at the best technology yet."
Balaski suggests it's a challenge right now for transport companies to switch to LNG, but they stand a better chance if they operate in in B.C. compared to Alberta. That's because B.C.'s tax structure favours LNG compared to diesel. In addition, it also offers incentives to cover the cost of converting vehicles to natural gas.
"The technology in the vehicle needs to continue to develop to make sure this is a sustainable industry long term," said Balaski.