Major carriers making switch to natural gas

Posted on 04/23/2012 by David Radke

CNG could offer a solution for high diesel prices.

With diesel prices still high, major food distributor Frito-Lay has announced plans to add dozens of new natural gas-powered trucks, according to The New York Times.

Though oil prices have stabilized a bit recently, most carriers are still feeling the sting at the pump. In an effort to cut down their fuel costs while also dramatically reducing their carbon emissions, Frito-Lay, the owner of the seventh-largest fleet in the country, plans to add another 67 compressed natural gas (CNG) trucks.

"The good news is that it’s a win-win for us, both in terms of our sustainability strategy and reducing our costs," Michael O’Connell, senior director of fleet capability, told the Times. "The payback for the extra cost of the natural gas trucks is a year and a half, so it’s a little bit of a no-brainer. We retire approximately 125 tractors a year, and we plan to replace as many of them as we can with natural gas."

Given that natural gas prices are currently at a decade low, under $2 per million British thermal units, the company estimates that it could save the equivalent of $2.50 per gallon over diesel. Given that another 67 traditional trucks would have used around 900,000 gallons of diesel each year, that amounts to annual savings of $2.25 million. And, potentially, paying lower costs on fuel tax as well.

Frito-Lay isn't the only major company deciding to make the jump into CNG either. Waste Management of Illinois Inc., the country's largest ... well … waste management company, just opened the largest commercial CNG fueling station and by the end of the year the company plans to have more than 80 CNG trucks.

Some members of Congress have pushed for measures to encourage more carriers to make the switch, and Seeking Alpha suggests that these laws could actually end up saving the U.S. billions of dollars by reducing reliance on foreign oil. But Reuters reports an effort last month to push through new subsidies for CNG trucks was shot down in the Senate.

Still, plenty of people in the industry are picking up on changing winds without the added incentive. The Wall Street Journal reports that even General Motors has introduced a new pickup truck that's available with a CNG engine.

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