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Electric, natural gas trucking sectors duel over who deserves funding — now

Advocates hope the pandemic accelerates adoption of natural gas vehicles; electric truck advocates double down on battery power

Image: Jim Allen/FreightWaves

Natural gas proponents are hoping the coronavirus pandemic will accelerate adoption of natural gas trucks even as electric truck advocates double down on battery power as the key to reducing greenhouse gases and diesel particulate emissions.

“Buck for buck, natural gas vehicles are probably one of the most cost-effective alternative vehicles right now,” said Thomas Lawson, president of the California Natural Gas Vehicle Coalition, an industry association.

As the COVID-19 economic collapse forces fleets to tighten their pocketbooks, “we hope the pandemic is an opportunity to have a different conversation specifically in California around alternative fuels, especially in the heavy-duty truck sector.” 

About 175,000 natural gas vehicles (NGVs) are on the road today, the majority of them commercial vehicles in the refuse, transit, and medium- and heavy-duty truck markets. Most are powered by compressed (CNG) or liquefied (LNG) natural gas, but a growing number run on renewable natural gas (RNG), a fuel derived from agricultural and wastewater that raises the bar on vehicle performance.

Despite widely acknowledged environmental benefits associated with NGVs, many clean fuel experts remain steadfast in their conviction that electric propulsion is the alternative fuel to invest in, now and for the future.

“Bottom line, natural gas-powered trucks won’t get us where we need to be on air quality and climate change,” said Jimmy O’Dea, a clean vehicles analyst with the Union of Concerned Scientists. That group is a member of the Electric Trucks Now coalition, a group championing zero-emissions truck mandates in California.

Reducing the impacts of heavy-duty vehicles on air quality and climate change will require a large-scale shift to battery and fuel cell electric vehicles, according to O’Dea.

“There aren’t many ways around that,” he said.

Common destination, different  pathways

The coronavirus has given Americans unprecedented glimpses of cities and neighborhoods largely cleansed of transportation-related pollution,  and many clean vehicle advocates believe now is the time to ramp up alternative fuel programs and make clean air part of the new normal.

At stake is the specific approach policy makers and industry should pursue. Generally speaking, sustainable transportation advocates agree it will take a variety of eco-friendly alternatives to transition away from diesel. But the pandemic is also calling attention to some of the political jockeying taking place between groups lobbying for specific fuels and technologies, as well as scarce public dollars to accelerate adoption.

Among those who believe they are getting short shrift are natural gas vehicle enthusiasts. They argue that regulators (mostly in California, the epicenter for clean vehicle policy innovation) too often bypass heavy-duty natural gas trucks, which are available now, in favor of incentives for electric big rigs, which are still largely in the pilot phase.

LNG and CNG eco-performance manifests in around 20% to 30% lower greenhouse gas emissions and 95% lower particulate matter emissions than diesel fuel. RNG, also known as biomethane, ups the ante, recording a carbon-neutral or even carbon-negative impact, depending on the emissions accounting method.

“The industry is saying: ‘Wait a second, we have exciting technology, it’s super clean, it’s cost- effective,’” said Erik Neandross, CEO of Gladstein, Neandross & Associates (GNA), a clean transportation consulting firm. “So why don’t we have a seat at the table when we’re talking about the clean truck or clean transit rule?”

Neandross is referring to California’s proposed Advanced Clean Truck regulation, a first-of-its-kind policy that, if adopted, would require truck manufacturers in the state to sell a certain percentage of zero-emissions heavy-duty trucks. Last week, air quality regulators released a stiffer version of the rule, and while the revision was a win for electric truck proponents, the natural gas fuel industry was left out in the cold.

California’s clean transit rule, approved in 2018, sets a statewide goal for public transit agencies to gradually transition to 100% zero-emission bus fleets by 2040.

Zero vs. near-zero emissions

In an emailed statement to FreightWaves, the California Air Resources Board (CARB) said the agency has a “portfolio of programs” to generate emission reductions in the heavy-duty sector.  “But the ACT rule is specifically focused on accelerating the deployment of zero-emission vehicles,” the statement said, “and as a result only focuses on zero-emission technologies.”  

The distinction between zero- and near-zero-emissions transportation is at the heart of the electric vs. natural gas debate. Derived from fossil fuels, CNG and LNG produce lower tailpipe and greenhouse gas emissions than diesel. But they are not zero-emissions vehicles, which explains why they don’t qualify under the ACT rule — or for that matter, the Ports of Los Angeles and Long Beach programs requiring all trucks to be zero emission by 2035.

Electric trucks are considered zero emission vehicles, although critics note that cars and trucks powered by electricity produced by fossil fuels such as coal compromise that definition.

RNG is a more complicated story. Produced from the breakdown of organic material in landfills, wastewater and farms, biomethane is considered a carbon-neutral fuel and in some cases even carbon negative — meaning it takes more carbon out of the environment than it produces. Such is the case when biomethane is produced from dairy cow manure, for example.

Supply and demand

O’Dea agrees RNG is an improvement over CNG and LNG.  But there’s a catch, he said, in the form of a constrained supply, which limits its potential as a scalable pollution and greenhouse gas emissions solution.

The vast majority of natural gas trucks are powered with CNG or LNG, O’Dea said. “Even at its best, there is only so much biomethane that can ever offset the natural gas piece of the pie.”

Dan Gage, president of Natural Gas Vehicles for America, begs to differ. He points to a recent industry-funded study showing that 39% of all on-road fuel used in natural gas vehicles in 2019 was RNG, and that its use has increased 291% over the past five years.

Among the fleets, large and small, investing in biomethane is UPS. The logistics giant in February announced plans to purchase more than 6,000 renewable natural gas-powered trucks through 2022 as part of a broader effort to increase alternative fuel consumption to make 40% of its vehicle fleet carbon neutral by 2025.

“We know there are a lot of detractors out there that want to push an electric future,” Gage said. “But if we’re going to address climate change, using not only the cleanest but the most cost-effective fuel now, renewable natural gas is a solution.”

Economics drives adoption

Separate from the natural gas vs. electric debate, NGVs today face another challenge — low diesel prices.

Generally speaking, diesel fuel prices are much more volatile than prices for natural gas as they vary based on the political climate, whereas natural gas fuel prices have been consistently low for years. But  due to rivalries between oil producing nations, as well as the coronavirus economic collapse, oil prices have been in free fall this spring, undercutting the natural gas price advantage.

“Even proponents of natural gas point to fuel arbitrage as their ace in the hole,” said Steve Tam, vice president of ACT Research, a commercial vehicle data and forecasting firm. “With oil prices and subsequently diesel prices at a low level, that does present a challenge for natural gas to try and increase penetration.”

But as oil and fuel prices inevitably rise, Tam said, alternatives, including natural gas, will become more competitive. “In the nearer term natural gas will hold its own,” he said. “It’s not going to cede share back to diesel.”

Fuel is the second most expensive component of the total cost of ownership of a truck. On average, a Class 8 diesel truck costs around $100,000, a comparable natural gas vehicle $150,000 and an electric truck, $290,000. 

That oil is dirt cheap doesn’t help the natural gas fuel industry, Gage said. But in light of the pandemic, the cost advantages of NGVs compared to electric have become even more important.

“As our local, state and federal governments move from saving lives to livelihoods and look at what their budgets are,” he said, “it does not make sense to pump billions into electrification. We should be using those resources to transition over to natural gas.”

Bridge to the future

The idea that natural gas is a bridge that can help improve air quality and reduce greenhouse gas emissions now, and not sometime in the future, is a common argument in favor of NGVs. That line of thinking is gaining traction during the pandemic, as it causes tremendous financial strain for governments and fleets.

It’s conceivable that allocations to government incentive programs will be substantially reduced,” said Tom Swenson, business development manager for Cummins Inc.’s Natural Gas Group, in an email to FreightWaves.  

But local air quality and global climate change concerns will continue, Swenson said, and “while we see promise in continuing to develop electric technologies to expand their applicability, in near-term we can’t lose sight of the fact that we have cost-effective air quality and climate change solutions available today in natural gas.” 

Most natural gas trucks get their power from Cummins. All three of its natural gas engines are certified to the California Air Resources Board’s 0.02 g/bhp-hr nitrogen oxide (NOx) standard, the L9N and ISX12N since 2018 and the B6.7N starting in 2020.

Produced through fuel combustion, NOx emissions form ground level ozone, smog and particulate matter that contribute to unhealthy air quality. In California, heavy-duty trucks are responsible for about 25 percent of diesel particulate pollution, and produce about 8 percent of the state’s total greenhouse gases. 

The Cummins engine emission level is as low as or lower than the emissions associated with electric generation to charge a battery vehicle, according to Swenson. “When combined with renewable natural gas to reduce greenhouse gases,” he said, “it’s a powerful air quality strategy.”

Electric truck advocates don’t disagree with that statement. Even if electric truck sales mandates become  law, they say, sales of combustion vehicles are going to be around for a long time. As such CARB is simultaneously developing lower NOx emission standards for combustion trucks, and those standards “require cleaner combustion technologies which natural gas is suited for,” the agency said in its statement.

These rulemakings include the Phase 2 Greenhouse Gas Emissions rule, the upcoming Low-NOx Omnibus rulemaking package and Heavy-duty Inspection and Maintenance program, as well as the Low-Carbon fuel standard.

Through a combination of regulations, CARB said, “we can ensure more emission reductions than would be feasible with any single regulation,

In addition to the statewide regulations, both the greater Los Angeles area and the Central Valley have identified ultra-low-emission natural gas engines as a key component to meeting the federal requirements for their upcoming federal air quality check point in 2023.

Level playing field

For many natural gas proponents, these policies don’t go far enough.

Referring to the Advanced Clean Truck rule, Lawson of the California natural gas vehicle association said: “There are some regulations coming down the pipeline looking to curb enthusiasm for natural gas fuel. But what you’ll see is next year or so people are not being able to meet those mandates because of the cost of vehicles and cost of infrastructure.”

A “false narrative” is circulating that natural gas is against electric vehicles, he added. The truth is “we’re looking for incentives to force a much more realistic conversation with fleet managers and to incentivize them to make that switch.”

“Natural gas is something that should be promoted and included in the tools that we offer because California is going to need all its tools if it’s going to meet ambitious clean air goals.”

This article has been updated.

Linda Baker, Senior Environment and Technology Reporter

Linda Baker is a FreightWaves senior reporter based in Portland, Oregon. Her beat includes autonomous vehicles, the startup scene, clean trucking, and emissions regulations. Please send tips and story ideas to [email protected]