UPDATED: Cummins to "pause" development of 15L natural gas engine, leaving void in marketplace

By: James Menzies
2014-01-17

TORONTO, Ont. -- Cummins has confirmed to US trucking publication Commercial Carrier Journal that it will be putting development of its 15-litre natural gas engine on hold, leaving the market devoid of a 15-litre product after Westport announced last year it was discontinuing production of its own 15L GX engine.

In a conference call last fall, Westport said it was shifting strategies, and would focus on being a technology partner to OEMs rather than building its own loose natural gas engines. It took the final orders for its 15L GX engine in mid-November, meaning customers currently have no 15L natural gas engine available for order. The Cummins ISX15 G was scheduled to enter full production next year.

Canada’s heavy-duty natural gas pioneers, Groupe Robert, Vedder Transport and Bison Transport, expressed mixed reaction at the setback. Robert Penner, executive vice-president and chief operating officer for Bison Transport, said if a 15-litre remains unavailable for an extended time, the company will have to re-evaluate its natural gas trucking program.

“This essentially takes natural gas completely out of the heavy-haul application,” Penner told Trucknews.com. “Our initial strategy was to deploy LNG in applications where our fuel cost per mile was highest, which is our LCV division. Since that is no longer possible, we must re-evaluate to determine what, if any, go-forward plan exists for us.”

Bison has been running 15 LNG-fuelled Peterbilt trucks between Calgary and Edmonton pulling double 53-ft. trailers grossing 63,500 kgs. The company entered into a fuel supply agreement with Shell, which has already opened one LNG fuelling station in Calgary with plans for others in Edmonton and Red Deer, creating an LNG fuelling corridor linking Alberta’s two largest cities.

Fred Zweep, president of Vedder Transportation Group, said a 13-litre engine will fit many of Vedder’s current needs, and that he’s confident the company can extend the life of its 50 existing Westport GX 15L engines until a suitable replacement becomes available.

“Currently we measure the utility of our 50 15-litre HPDI GX engines in two fashions: hourly for the tractors assigned to hourly-measured work and kilometres for equipment operated over the highway,” Zweep said. “As we push over 175,000 hours on the hourly tractors and just over six million kilometres on the over-the-highway tractors, we remain very pleased with the performance of the tractors and look forward to an extended life on these natural gas engines above and beyond what we currently anticipate a diesel engine in the same weight classification to do. Once we run the life of the engines, we have the option to rebuild and keep the truck chassis rolling up and down the highways. Westport continues to support our HPDI GX engines and we are confident Westport will be there to assist us if and when we might run into unforeseen challenges.”

Vedder uses some of its LNG tractors to haul heavy loads of trash from the Lower Mainland of Vancouver to a landfill site in the B.C. Interior and others for regional agricultural work closer to home. For the latter application, a smaller displacement engine may well work, Zweep said.

“At the time our fleet adopted the natural gas 15L HPDI GX engine, the 13L was not available,” Zweep pointed out. “Had it been, 50% of our HPDI order would have been in the 13L category.”

He added: “At this time we don't foresee any impact on the fleet, nor are we planning to make any adjustments to our operating processes…Natural gas is here to stay, the technology is visionary, the technology is durable as our fleet is a testament to the fact it works and once you wrap your head around the reality that the price for natural gas is economically more viable than diesel it shouldn't be difficult for OEMs to recognize the time is right for them to partner with Westport to develop the next evolution of a natural gas engine.”

Groupe Robert, for its part, plans to try smaller displacement natural gas engines until a 15L becomes available.

Yves Maurais, technical director, asset management, purchase and conformity with Robert, told Trucknews.com “I guess we have no choice (but) to go to a smaller 13L or 12L engine if we want to keep improving our fleet and continue our conversion to LNG.”

He said he’s encouraged by some of the product that’s coming online over the next year or two.

“The Volvo 13L engine will be powerful enough for LCVs, but not the (Cummins ISX12 G) 12L which is limited to 400 hp,” Maurais said. “We are anxiously waiting the new Volvo design as we think this will be the next step for us. Meanwhile, we will keep running the GX 15L from Westport in our 125 trucks currently on the road. The new Volvo LNG trucks should be available in 2015, so we're not too far out. We may look at some 12L Cummins engines for short-haul and local LTL operations but nothing is in the works right now.”

A priority for Groupe Robert involves convincing the federal government to consider lifting some of the emissions requirements on LNG-fuelled trucks so that they no longer require SCR and DPF systems.

“We know that LNG trucks produce less GHGs that an equivalent diesel truck; is there really a need to carry all of those systems (DPF, EGR and SCR) when you are using LNG?” Maurais pointed out. “We know it's an uphill battle, but we will keep fighting to promote and facilitate the use of LNG in Canada.”

UPDATE: Here is the official statement from Cummins, courtesy Christy Nycz House, on-highway marketing communications director:

"As a result of market timing uncertainty, Cummins has paused the development of the Cummins ISX15 G natural gas engine. While we believe natural gas power will continue to grow in the North American truck market, the timing of the adoption of natural gas in long haul fleets preferring 15 liter engines is uncertain. We believe the adoption of natural gas in long haul fleets will be paced by a variety of factors beyond the engine and include fuel tank technology and public fueling infrastructure.

Cummins remains committed to the natural gas market.  Heavy-duty fleets desiring natural gas power currently have the option of the Cummins Westport ISX12 G, which is available in a wide range of heavy-duty truck OEMs.

We will re-evaluate the market demand and readiness for the ISX15 G later in 2014. "

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Sales of Natural Gas Trucks and Buses Will Reach Nearly 400,000 by 2022, Forecasts Navigant Research

BOULDER, Colo.--(BUSINESS WIRE)--Driven by the lower cost of natural gas and the lower emissions from natural gas engines, compared to diesel fuel, operators of truck and bus fleets are increasingly shifting to natural gas vehicles. New markets for natural gas vehicles, such as the United States and China, tend to focus on fleet markets, particularly trucks and buses, because they require fewer refueling stations and fuel costs have become the highest or second highest cost for fleets. Click to tweet: According to a new report from Navigant Research, worldwide sales of natural gas trucks and buses will grow from 170,200 annually in 2013 to 398,400 by 2022.

“Demand for natural gas trucks and buses remains uneven on a regional basis,” says Dave Hurst, principal research analyst with Navigant Research. “In North America, where natural gas costs remain low, the number of vehicles is outstripping the development of refueling stations. In Asia Pacific, China and other developing markets are looking to natural gas to help address environmental woes in large cities. As a result, the total number of natural gas trucks and buses on the road by 2022 is anticipated to reach nearly 4 million.”

On average, the price of compressed natural gas (CNG) is about 42 percent that of diesel, according to the report. Liquefied natural gas (LNG) tends to be a bit higher, but sees significantly more variability than CNG. Given the difference, the payback period for heavy duty trucks can be as short as 1.5 years in North America. The incremental costs are largely driven by storage tanks for the CNG or LNG, which account for between 53 percent and 76 percent of the total incremental costs.

The report, “Natural Gas Trucks and Buses”, analyzes the global market for trucks and buses that are in the medium duty (10,000 to 26,000 pounds) and heavy duty (26,000 pounds or more) gross vehicle weight classes. The study provides an analysis of related market issues and drivers, including refueling availability, competing alternative drive technology, total cost of ownership, vehicle availability, and government influence. Global market forecasts for vehicle sales, vehicles on the ground, and fuel used are broken out by segment, fuel type, and region and extend through 2022. The report also examines the key technologies related to natural gas storage on vehicles, as well as the competitive landscape. An Executive Summary of the report is available for free download on the Navigant Research website.

About Navigant Research

Navigant Research, the dedicated research arm of Navigant, provides market research and benchmarking services for rapidly changing and often highly regulated industries. In the energy sector, Navigant Research focuses on in-depth analysis and reporting about global clean technology markets. The team’s research methodology combines supply-side industry analysis, end-user primary research and demand assessment, and deep examination of technology trends to provide a comprehensive view of the Smart Energy, Smart Utilities, Smart Transportation, and Smart Buildings sectors. Additional information about Navigant Research can be found at www.navigantresearch.com.

About Navigant

Navigant is a specialized, global expert services firm dedicated to assisting clients in creating and protecting value in the face of critical business risks and opportunities. Through senior level engagement with clients, Navigant professionals combine technical expertise in Disputes and Investigations, Economics, Financial Advisory and Management Consulting, with business pragmatism in the highly regulated Construction, Energy, Financial Services and Healthcare industries to support clients in addressing their most critical business needs. More information about Navigant can be found at www.navigant.com.

* The information contained in this press release concerning the report, “Natural Gas Trucks and Buses,” is a summary and reflects Navigant Research’s current expectations based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in this press release or the report. Please refer to the full report for a complete understanding of the assumptions underlying the report’s conclusions and the methodologies used to create the report. Neither Navigant Research nor Navigant undertakes any obligation to update any of the information contained in this press release or the report.

Cummins Westport to offer natural gas 6.7L ISB G

VANCOUVER, B.C. -- Cummins Westport has announced it plans to offer a mid-range natural gas engine based on Cummins’ 6.7-litre ISB.

The engine will use Cummins Westport’s spark-ignited, stoichiometric cooled exhaust gas recirculation (SEGR) technology. Exhaust aftertreatment will be provided by a three-way catalyst.

The ISB6.7 G will run off compressed natural gas (CNG), but the fuel can be stored on the vehicle in either compressed or liquefied form, the company announced.

“The addition of the ISB6.7 G will round out our family of high performance natural gas engines,” said Jim Arthurs, president of Cummins Westport. “It joins the 8.9-liter ISL G, with over 16,000 engines in service, and the 11.9-litre ISX12 G, which will start production in 2013, to give our customers a broad range of natural gas engines for on-highway applications.”

The latest offering will enter production in 2015 and will be aimed at medium-duty and vocational truck markets.

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East Coast fleets consider advantages of natural gas

HALIFAX, N.S. -- The potential of natural gas as a viable trucking fuel is no longer a curiosity; it has implanted itself into the collective consciousness of trucking industry decision makers and seems unlikely to go away.

While the industry has had its flirtations with natural gas before, Alicia Milner, president of the Canadian Natural Gas Vehicle Alliance, says this time it’s different. She said there’s been a structural shift - a decoupling - of the price correlation between diesel and natural gas.

“Natural gas and oil (pricing) used to track together,” Milner said during a panel discussion on natural gas at the Atlantic Provinces Trucking Association’s Transportation Summit. “That has now changed. These two commodities are splitting now because of the huge difference in supply in North America.”

Milner said Canada and the US both sit on a 100-year supply of natural gas. Meanwhile, demand for the fuel is decreasing due to the construction of more energy-efficient buildings combined with increased production resulting from improved fracking techniques.

Canada is the world’s third largest producer of natural gas. Half of our production has traditionally been exported to the US, but they, too, are enjoying unprecedented access to their own abundant supply and now have less need for Canadian imports. For all these reasons, Milner said there’s a lot to like about Canada’s transportation industry adopting natural gas where applicable.

Currently, natural gas costs about 40% less than diesel fuel. It enjoys federal and provincial road tax exemptions, which panelists agreed won’t last forever.

“Could this change? Yes. If we’re successful (in transitioning to natural gas in trucking), we fully expect it will change,” Milner said of the tax exemptions currently granted on natural gas. “We’ve been trying to inform Ottawa to let it first get into the market, give it a honeymoon period and then of course it will have to attract taxes; that’s what pays for roads, bridges, etc.”

By the time natural gas is taxed, Milner said there will hopefully be economies of scale in place to bring down the high initial purchase price of the vehicles.

Current pricing in Canada provides natural gas users with a savings of about 32 cents per litre. So if the federal excise tax of four cents per litre is applied to natural gas, along with a modest provincial fuel tax, the spread will still be significant enough to provide a return on investment, Milner pointed out.

Adding to proponents’ excitement about the fuel is that it can be a renewable resource, derived from the methane produced by trash. While it may seem futuristic, Milner pointed out Gaz-Metro has already inked a deal with the city of Riviere du Loup to supply renewable natural gas.

Truckers themselves now have access to an unprecedented selection of natural gas vehicles, including 11 factory-built highway tractors. Engine choices remain limited for now to the 9-litre Cummins ISL G - which can run off either compressed or liquefied natural gas - and the 15-litre Westport HD, which is only available in an LNG configuration. The ISL G is rated at up to 320 hp, is spark-ignited and doesn’t require a diesel particulate filter (DPF) or selective catalytic reduction (SCR). The Westport HD requires a 5% mix of diesel fuel for ignition purposes and as such, still requires SCR and a DPF.

While the torque and horsepower offerings between those two products cover a fairly broad swath, the industry is eagerly anticipating the 2013 launch of the Cummins ISX 12 G, which will offer up to 400 hp in either CNG or LNG configurations. Meanwhile, for its part, Westport is coming out with a 500-hp rating next year.

Thus far, the Westport engine has been most popular in Canadian on-highway applications. There are about 120 LNG highway tractors in use today, mostly owned by Robert Transport in Quebec and Vedder Transportation in B.C. Both Robert and Vedder have fueling stations installed at their own facilities, but Milner said four truck stops will be offering LNG by 2013: GazMetro in Quebec City; and Shell in Calgary, Edmonton and Red Deer, Alta. (Irving Oil also announced at the Summit its intent to offer LNG at five of its fueling stations in Eastern Canada).

Milner noted both Robert and Vedder enjoyed government assistance to help offset the high cost of natural gas-fuelled trucks, and added regulators in Nova Scotia, Ontario and Alberta have at least shown interest in offering incentive programs of their own. B.C. already has a five-year program in place that will pay $60 million in incentives while Quebec was first to offer funding of up to $15,000 per truck.

Still, that contribution, while welcomed, doesn’t come close to covering the full incremental cost increase for natural gas trucks.

Class 8 tractors with the Westport HD engine typically carry a price premium of $65,000-$90,000, depending on whether the truck is fitted with one tank or two, explained Westport’s Eve Grenon-Lafontaine. (A single 120-gallon/54 diesel gallon equivalent tank has a range of 275 miles). The tanks, at about $30,000 a piece, are the most costly component of a natural gas vehicle. Even so, she said a payback can be achieved in two to four years, depending on the application. She said quicker paybacks are achieved in heavy-GVWR, high-mileage applications. Specifically, Grenon-Lafontaine said an LNG truck running 125,000 miles a year at 5 mpg will provide fuel savings of about $37,500 per year based on the current price spread between gas and diesel.

Adam Whitney, national account executive with Cummins Canada, said the ISL G costs $40,000-$50,000 more than a diesel-powered equivalent. Since these are typically smaller, regional trucks, he used 60,000 miles per year over a six-year period averaging 25 mph for his calculations. He projected a fuel savings of $76,000 over a six-year life-cycle.

Natural gas also adds weight to the vehicle, to the tune of 800-2,000 lbs. Whitney pointed out about 400 lbs of that is recovered with the ISL G engine since it no longer requires the DPF and SCR. In B.C., Vedder Transport has been able to negotiate a 3,300-lb weight exemption for its natural gas vehicles.

There are maintenance requirements on natural gas-fueled trucks, including the use of a specially formulated engine oil for the ISL G. More visual inspections are required of the operator to ensure the high-pressure gas lines are secure. Drivers should be trained on the trucks’ in-cab methane detection system and on fuelling. Filling an LNG truck is more complex, requiring gloves and a mask. LNG is stored at -160 C while CNG is compressed to 3,600 psi.

Each of the panelists acknowledged that natural gas isn’t the perfect solution for everyone, but that it has its place and that manufacturers and suppliers are committed to the technology.

“If you look ahead, over the next two years almost every single truck manufacturer will have natural gas products available,” said Bill Howell of Irving Oil. “There’s a wide gamut of selections for a fleet. It requires a lot of analysis and you need to understand what you’re getting into.”

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Virginia Signs Natural Gas Agreement With Clean Energy

Virginia Gov. Robert McDonnell (R) signed an agreement with Clean Energy Fuels Corp. to allow state and local entities to buy compressed natural gas from Clean Energy for their vehicle fleets.

Government bodies will be able to access special pricing for CNG fuel and services via the state’s procurement website, Clean Energy said in a statement.

Clean Energy said it will build CNG fueling stations and provide vehicle conversions for state and local Virginia governments seeking to use natural gas as a transportation fuel.

“Not only is this good for the government and the environment, but ultimately, it will be good for consumers and the economy as well,” said McDonnell, who signed the agreement Tuesday in Richmond, Va.

“The infrastructure created through this effort will be available to fuel passenger vehicles and other commercial fleets . . . [and] reduce our dependence on foreign oil,” he said in a statement.

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Fleets Turn to New Technology, Natural Gas to Reduce Expenses During Slow Growth

By Rip Watson, Senior Reporter

This story appears in the Aug. 20 print edition of Transport Topics. Click here to subscribe today.

BOCA RATON, Fla. — Executives with both for-hire and private fleets said they increasingly are turning to cost-saving technologies and natural gas to reduce expenses in a slow-growth economy.

Speaking Aug. 7 at the PeopleNet User Conference here, officials with five trucking companies that utilize PeopleNet products outlined a broad range of financial and operational benefits from new technology and fuel options.

“There is a proven return on investment for technology,” said Charlie Campagnaro, mobile communications manager for the van division of Laidlaw Carriers, Stratford, Ontario. The carrier, he said, has cut costs by about 90% by using in-cab scanners to transmit shipping documents instead of faxing them from truck stops.

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Future is bright for natural gas, but early adopters face "bumps in the road"

DALLAS, Texas -- C.R. England is struggling to achieve a payback on a fleet of five day cab tractors running liquefied natural gas on a dedicated run between Southern California and Las Vegas, according to Dan England, chairman of the 4,800-truck fleet.

Speaking at the Commercial Vehicle Outlook Conference, England said the five Kenworth T800 trucks equipped with the Westport 15-litre HD LNG engine were deployed last October and are currently running a loop for Coca-Cola that takes them 250 miles in each direction. There are LNG filling stations at each end of the route, England explained, with each of the trucks running about 500 miles per day.

The trucks are on a full-service lease with Paccar but “pretty staggering” maintenance costs of about 11 cents per mile (compared to 5-7 cents for diesel-powered vehicles) are eating into the fuel savings, England said.

C.R. England opted for the 15-litre Westport LNG engines because of the elevation changes along the route which may not have been well-suited to the smaller nine-litre Cummins ISL G. England said he’s anxiously awaiting the larger 12-litre ISX 12 G which will hit the market next year and will run on either compressed or liquefied natural gas.

Fueling has not been one of the detriments to the LNG technology. England said drivers have been trained to fuel the trucks, and while they need equipment like gloves, hard hats and masks, they haven’t experienced any problems with the fueling requirements.

A bigger concern has been the higher maintenance costs. England said the LNG trucks require oil and fuel filter changes twice as frequently as their diesel counterparts and valve adjustments have been required after just 60,000 miles compared to 500,000 miles on diesel tractors.

“You begin to see, there are some additional costs associated with running LNG versus diesel,” England said.

There have also been more frequent breakdowns with the LNG trucks. One was placed out of service for two consecutive weeks and of 19 engine-related breakdowns, 10 were related to the LNG system itself, England said.

“We’re not real high on what’s happening with our application right now,” England said. “To get to a break-even point on a 15-litre engine, we have to be out there with a diesel cost of about $4.80 and it isn’t there now, so obviously we’re not breaking even with these 15-litre trucks.”

He said Paccar has been working with the carrier to address issues and that he still feels natural gas is a viable option going forward. He said the 12-litre ISX G will likely be a better fit for C.R. England’s application and he also said engine costs must come down to make natural gas more feasible.

“Quite simply, the cost of these engines has got to come down,” England said. “And it will, with volume it will come down.”

Despite the “bumps in the road,” England said there are benefits to transitioning to natural gas.

“The reason we jumped into it is, we want to be environmentally responsible and save emissions but most of all we want to run these things profitably and get a return on investment,” England said. “Natural gas is still new and evolving and we have no doubt that we’re going to see a pretty good percentage of our fleet five years down the road running natural gas.”

England also threw water on the idea that fuel surcharges will be a thing of the past when natural gas takes hold.

“It shouldn’t go away,” England said of the fuel surcharge. “There are a lot of things to sort through here; we do feel the benefits of natural gas need to be passed along to our customers and ultimately the consumer, but by the same token we feel the carrier oughta be able to benefit from some of the savings we look forward to accruing because of natural gas.”

While C.R. England’s results have been less than spectacular, the technology will continue to evolve, insisted Kennon Guglielmo, chief technical officer, Econtrols, which produces fueling systems and components. He said when broken down to the price per unit of energy (or BTU), diesel currently costs eight times as much as natural gas.

“In the US, anything less than a 2:1 energy ratio between oil and natural gas is not enough to cause a critical mass movement towards natural gas adoption,” Guglielmo said. “Shale play came along and that plots us currently at about 8:1 today. The cost of a BTU of natural gas today is 1/8th the cost of a BTU of oil and that’s what gets you down the road.”

Robert Carrick, vocational sales manager, natural gas with Freightliner, said fueling infrastructure remains the biggest barrier and that too is improving. OEMs already offer a wide range of natural gas products, but fueling them remains the challenge.

“We hear all the time it’s the chicken and the egg syndrome. I’m here to tell you the chicken and the egg syndrome is dead - it’s the chicken and the feed,” Carrick said. “We, and our colleagues in the transportation industry, can build all the trucks you want with natural gas, we can get all the engines we need from Cummins, the tank manufacturers can come up with all the tanks we need to put on these trucks. The problem is there’s no place to feed these chickens, that’s the bottom line.”

Carrick said a compressed natural gas truck running 80,000 miles a year can produce a payback in a year-and-a-half at today’s fuel prices. Daimler Trucks North America (DTNA) has 1,500 natural gas trucks in service, 900 of them grossing up to 80,000 lbs. Carrick said he’s hopeful the US Natural Gas Act will be passed next year, which will result in expanded fueling infrastructure and incentives to offset the cost of the technology. If that happens, natural gas could suddenly surge into the mainstream, he suggested.

“Our forecast internally at Daimler, we think if all these stars align, we can easily be doing 20% of our build as natural gas by 2020,” he said. “That’s certainly a very attainable goal.”

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Daimler reaches 1,000th natural gas truck milestone

ANAHEIM, Calif. -- Daimler Trucks North America (DTNA) has become the first commercial vehicle manufacturer to deliver its 1,000th natural gas truck, the company announced this week.

DTNA turned over the key to the truck, a Freightliner M2 112 compressed natural gas (CNG) truck with a Cummins Westport ISL G engine, to customer Ryder System during a ceremony to commemorate the milestone at Angel Stadium in Anaheim, Calif.

The Freightliner M2 112 CNG truck is powered by a Cummins Westport ISL G 8.9 liter engine, the only one of its kind that is a factory-produced, dedicated natural gas engine. The landmark vehicle was manufactured at DTNA's plant in Mt. Holly, N.C.  

"With our 1,000th natural gas truck, DTNA solidifies its position as the market leader in alternative fuel options," said Mark Lampert, senior vice-president of sales and marketing for DTNA. "This achievement is unmatched in the commercial vehicle industry, and we are proud to be pacing the industry in natural gas and sustainable green technologies."

"DTNA's 1,000th natural gas truck is an important milestone and a strong example of our dedication to manufacturing high-performance, low-emission vehicles that help our customers save on fuel costs," said Bob Carrick, vocational sales manager, natural gas Freightliner Trucks for Daimler Trucks North America. "These vehicles not only save our customers money, they also provide air quality benefits in the communities where they are deployed."

Upon formally accepting the vehicle from DTNA, Scott Perry, vice-president of supply management for Ryder Fleet Management Solutions said: "As a leader in commercial transportation and logistics, Ryder is leveraging its unique ability to influence and reach a broad, diverse customer base to improve access to alternative fuels such as natural gas. Working closely with industry partners like Freightliner enables us to continue to offer our customers new vehicle technologies that are reliable, cost-effective, and that help them realize their sustainable transportation goals."

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