T. Boone Pickens, the oilman-turned-gas promoter whose BP Capital owns Clean Fuels, joined Navistar executives to announce a deal yesterday morning at the truck builder’s new headquarters in Lisle, Ill.

The agreement will see Navistar building more International trucks with natural gas engines, while Clean Energy will build more filling stations for truckers who commit to using the comparatively inexpensive and increasingly abundant fuel.

Customers who sign up will pay no extra money for trucks equipped to store and burn natural gas and filling stations for them.

“Progress is being made in alternative fuels,” said Dan Ustian, Navistar’s chairman, president and chief operating officer, who opened the press conference before slipping away to prepare for a stock analysts meeting later that morning.

“It’s always seemed to be government supported. While we hope we can get more money for research and development, this can stand on its own.”

Pickens, who’s been promoting the use of natural gas since 2010, said it’s both a financial and national security matter.

“Prices vary, but this is the cheapest fuel in the United States” at about $2.50 per diesel-equivalent gallon, or about $1 to $1.50 less than diesel, he said. “We cannot pass up this opportunity.

“Heavy trucks are the biggest users of fuel and stand to see the biggest savings” because of gas’s lower cost. “It’s a big deal for our country because we’ve got to get off OPEC oil.”

Clean Energy spent $200 million last year to build fueling stations for both compressed and liquefied natural gas, said Andrew Littlefair, the firm’s president and CEO. That effort will expand under the partnership with Navistar, with $250 million budgeted for this year.

Jerry Moyes, president of Swift Transportation, who participated in the announcement, said he’d like his company to have the first trucks in the program. “We’re very excited about the potential for natural gas,” he said. “We buy millions of gallons (of fuel) every day, so this is a big deal.”

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According to year-end numbers released by the Environmental Protection Agency, the total volume of nearly 1.1 billion gallons is a record for the industry. The number exceeded the 800-million-gallon target required by the EPA’s Renewable Fuel Standard. The previous record for biodiesel production was about 690 million gallons in 2008.

The industry’s success in 2011 comes after Congress reinstated the fuel’s $1-per-gallon tax credit in December 2010 and as the EPA’s RFS program for biodiesel completed its first full year. Without those policies in place in 2010, production dropped dramatically as dozens of plants shuttered and thousands of people lost jobs.

The tax incentive expired on Dec. 31, 2011, and the biodiesel industry is urging Congress to reinstate it. In addition, the industry is calling on the EPA and the Obama administration to finalize the EPA’s proposal to boost the biodiesel volume requirement under the RFS to 1.28 billion gallons in 2013.

“Our success clearly demonstrates that the biodiesel tax incentive and the Renewable Fuel Standard are working just as Congress envisioned,” says Anne Steckel, vice president of federal affairs for the National Biodiesel Board. “Our industry is creating jobs, reducing our dependence on imported fuel, and improving the environment.”

A recent economic study commissioned by NBB found that biodiesel production of 1 billion gallons supports 39,027 jobs across the country and more than $2.1 billion in household income. An additional 11,698 jobs could be added between 2012 and 2013 alone under continued growth in the RFS and with an extension of the biodiesel tax incentive.

“Now is not the time to be second-guessing the RFS or eliminating the biodiesel tax incentive,” Steckel says. “We’re proving that the policies work, that American innovation and competitiveness can pull us away from our dangerous dependence on imported fuel. Just as President Obama said in his State of the Union this week, we need to stay the course to continue creating jobs and building America’s energy capacity.”

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Transport companies nationwide are feeling the pressure to streamline operations. Transporters face diesel fuel prices that have the potential to reach $4 to $5 per gallon in the near future, and are further strained as they navigate the changing landscape of government regulations.

Add to this the steady growth in customer demand for greener transport solutions, and transporters must find ways to extend shelf life, reduce fuel consumption, decrease maintenance costs and differentiate through strategic capital investments in order to remain competitive.

The potential savings of a greener fleet aren’t limited to transporters, however. Businesses everywhere are feeling the economic pinch and are looking for ways to operate more efficiently.

From acquiring raw materials to shipping goods to market, transportation costs can have a significant impact on the bottom line and environmental impact of any business.

Consumer pressure is also a factor. Customers are increasingly aware of the environmental impacts of the products they buy, further driving businesses to invest in sustainable processes, including the supply chain.
Thermo King, a business of Ingersoll Rand, said it develops innovative transport solutions and that it meets this growing demand for efficient transport temperature control systems. With more than 70 years of experience, the company said it has implemented solutions for a wide variety of customers, including Edible Arrangements and C.R. England.

According to Thermo King, a greener fleet includes improvements in the following areas:
• Fuel Usage
• Idling Time
• CARB Compliance
• Emissions
• Noise
• Maintenance

For a complete list of improvements, visit www.thermoking.com.

As demand continues to grow from businesses seeking new ways to achieve improved efficiency, 2012 will see more companies allocating budgets to make improvements like those suggested here to their fleet vehicles and supply chains.

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The Annual Energy Outlook 2012 Reference case released today by the U.S. Energy Information Administration features updated projections for U.S. energy markets through 2035.

“Our updated reference case projections show natural gas and renewables gaining an increasing share of U.S. electric power generation, domestic crude oil and natural gas production growing, reliance on imported oil decreasing, U.S. natural gas production exceeding consumption, and energy-related carbon dioxide emissions remaining below their 2005 level through 2035,” said EIA Acting Administrator Howard Gruenspecht.

These projections, he said, reflect increased energy efficiency, updated assessments of energy technologies and domestic energy resources, the influence of evolving consumer preferences, and projected slow economic growth.

Domestic crude oil production is expected to grow by more than 20% over the coming decade. Domestic crude production increased from 5.1 million barrels per day in 2007 to 5.5 million barrels per day in 2010. Over the next 10 years, continued development of tight oil combined with the development of offshore Gulf of Mexico resources are projected to push domestic crude oil production to 6.7 million barrels per day in 2020, a level not seen since 1994.

U.S. dependence on imported petroleum liquids declines in the EIA’s projections, primarily as a result of growth in domestic oil production of over 1 million barrels per day by 2020, an increase in biofuel use of over 1 million barrels per day crude oil equivalent by 2024, and modest growth in transportation sector demand through 2035. Net petroleum imports as a share of total U.S. liquid fuels consumed drop from 49% in 2010 to 38% in 2020 and 36% in 2035, according to the EIA’s projections.

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Some companies are seeking permits to ship liquefied natural gas overseas. After Cheniere Energy got a permit last May to ship gas from its Sabine Pass facility in Louisiana, manufacturers using natural gas, led by the Washington-based Industrial Energy Consumers of America, complained that sales to foreign countries may raise prices at home.

The EIA report is a response to an August 2011 request from the Department of Energy’s Office of Fossil Energy for an analysis of “the impact of increased domestic natural gas demand, as exports.”

The report found that with expected exports of 12 billion cubic feet of natural gas per day (bcf/day)-the amount of capacity companies have already applied to export-domestic natural gas prices could rise around 24% to 57% above baseline levels, depending on how quickly exports are ramped up and assumptions regarding the U.S. shale gas resource base.

U.S. natural-gas prices are at record lows. In face, Chesapeake Energy Corp., the second-largest U.S. natural-gas producer, will cut output and idle drilling rigs, reports BusinessWeek.

However, even without the exports, natural gas prices will increase under all scenarios considered by the DOE’s Energy Information Administration.

“Rapid increases in export levels lead to large initial price increases that moderate somewhat in a few years,” the agency said in the report. “Slower increases in export levels lead to more gradual price increases but eventually produce higher average prices during the decade between 2025 and 2035.”

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The firm also believes that the vertical integration trends among global truck manufacturers may lead to more intricate partnerships with lubricant makers, fostering the creation of “private label” engine oils, transmission fluids, etc., which could ultimately result in tighter OEM engine oil specifications to maintain warranty coverage.

In an interview with Fleet Owner, Sandeep Kar and Wallace Lau – respectively the global director of commercial vehicle research and truck research analyst for Frost & Sullivan – explained engine oils change to much lower viscosity formulations over the next six years to boost engine efficiency and thus fuel economy.

Research by both Kar and Lau indicate that 5W-40 and 5W-30 – even so-called “zero weight” oil blends of 0W-20 and 0W-30 – are being developed for medium- and heavy-duty truck engines in an attempt to generate the fuel savings necessary to meet federal fuel economy rules. However, Lau stressed that the challenge for such “low” and “no weight” oils will be maintaining engine protection properties as well as temperature handling characteristics.

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The company, which was founded in 2007, converts sunlight and waste CO2 to infrastructure-ready diesel, ethanol or commodity chemicals with no dependence on biomass feedstocks, downstream processing or precious natural resources. Though many biofuels companies have tried making cellulosic ethanol from non-food sources, none have succeeded at a commercial scale.

With this recent funding, which brings funding to $110 million to date, Joule plans to expand and operate a demonstration plant in Hobbs, N.M., to test its process at a much larger scale. The facility has the potential to grow to 1,000 acres for commercial production.

“Our goal since inception has been to enable large-scale, renewable fuel production at unprecedented costs and volumes in the near term, without the obstacles and slow pace of biofuel progress,” says president and CEO William J. Sims. “On the heels of our latest funding round and technology advancement, we’re in a very strong position to make it happen as planned.”

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“Being an industry leader has been central to Cox’s business strategy since its inception over 30 years ago,” said Jay Smith, president of Cox Transportation Services. “The decision to retrofit our fleet with Solus aerodynamic skirts was driven by our desire to be fuel efficient and increase profitability.”

The Solus split skirt can provide a 5% fuel economy improvement, the company said. It includes a two-piece design with 8 in. of static ground clearance and the rugged flex skirt panels offer 20 in. of total ground clearance. The panels weigh less than 200 lbs.

“This investment gives Cox a significant competitive advantage, making it one of the most fuel efficient and technologically advanced fleets on the East Coast. As the trucking industry continues to evolve and opportunities arise, it is the hard working and forward thinking companies like Cox that will be positioned to thrive,” said Richard Wood, president of Solus.

Cox is also evaluating Solus’ wheel cavity cover, which can add an additional 1.3% fuel economy improvement, Solus said.

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The company already has identified 98 locations and anticipates having 70 stations open by the end of 2012.

Due to an agreement with Pilot Flying J, many of the fueling stations will be co-located at Pilot travel centers.

Major highway segments planned for early opening include those linking:

* San Diego, Los Angeles, Riverside and Las Vegas;

* the Texas Triangle (Houston, San Antonio, Dallas/Ft. Worth);

* Los Angeles and Dallas;

* Houston and Chicago;

* Chicago and Atlanta;

and a network of stations along major highways in the Midwest (Illinois, Indiana, Ohio, Missouri, Kentucky, Tennessee, Kansas, Oklahoma and Alabama) to serve the area’s heavy trucking traffic.

The 150 stations are scheduled to coincide with the expected arrival of new natural gas truck engines for heavy-duty, over-the-road trucking.

“We are moving quickly to build this important network in order to support the new trucks,” says Andrew J. Littlefair, president and CEO. “Already, Clean Energy has engaged over 100 shippers, private fleets and for-hire carriers that have shared their operations to qualify the economic opportunity of operating natural gas trucks, which has helped us, in turn, plan the first phase of the natural gas fueling highway.”

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Pike believes the global market for hybrid electric vehicles (HEV), plug-in hybrid electrics vehicles (PHEV) and battery electric vehicles (BEV) will grow at 92% in 2012, with total sales surpassing 19,000.

In the U.S. this year, it predicts that 3,250 medium- and heavy-duty HEV trucks be sold, 790 BEV trucks will be sold and about 500 PHEV trucks will be sold.

In a slowly improving economy, driving factors of increased hybrid sales will likely be fleet owners’ desire to advertise a more environmentally-friendly fleet than their competitors’. Also pushing sales is the bottom-line cost impact from government emission regulations, says Pike.

“The performance of specific economic sectors will play a big role in the growth of electric drivetrains for trucks,” says Dave Hurst, senior analyst for Pike Research. “For example, as the retail industry rebounds, pick-up and delivery vehicle sales will rebound with it. This in turn will have a positive impact on the hybrid, plug-in, and battery electric truck markets, as well.”

In its research report, “Hybrid Medium and Heavy Duty Trucks,” Pike Research forecasted numbers through 2017. The firm expects the market to experience a compound annual growth rate of 42% between 2011 and 2017. In 2017, 100,746 hybrid and electric trucks are expected to sell globally.

In the U.S. in 2017, it’s expected that 21,675 hybrid and electric MD and HD trucks will be sold. That’s a growth rate of around 40% for hybrid and electric truck sales in the U.S. between now and 2017.

There are some obstacles that might stand in the way of growth in sales, however. One of those hurdles is the growing popularity of alternative fueled vehicles, particularly natural gas. Another is the high price tags on hybrid and electric vehicles. HEVs, PHEVs and BEVs all have higher upfront costs that are substantial enough to result in a higher total cost of ownership. Even with lower operating costs ($0.72/mile for diesel versus $0.60/mile for hybrid and $0.22/mile for BEV trucks, according to Pike), the higher purchase price for hybrids and electrics means the trucks aren’t able to recover their costs in a lifetime without government incentives.

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