Going 'green' with LNG
Aug. 14, 2012
by Susan Reidy
Increasing fuel surcharges is a challenge for all shippers, particularly millers who are distributing bulk flour in quantities ranging from 34,000 to 66,000 pounds by pneumatics.
So when Rogers Foods Ltd., British Columbia, Canada, was approached with a cost-saving, “green” initiative by the Vedder Transportation Group based on the use of liquefied natural gas (LNG) powered trucks, it jumped on board.
“We were inspired by our customers and employees to work voluntarily and proactively to protect the environment by including initiatives to reduce waste and CO2 emissions,” said Lew Rossner, vice-president, logistics, export & special projects, for Rogers Foods.
Vedder started investigating LNG trucks in May 2010, said Fred Zweep, president of Vedder Transportation, because it was being challenged by many of its customers on the food-grade side of the business. The Abbotsford, British Columbia, Canada-based company specializes in the transportation of food-grade products in a bulk liquid or dry state.
“Because they are tied to the agriculture industry, they wanted to know what we are doing and what the industry is doing to provide a greener solution to the landscape we commute over day in and day out with our diesel trucks,” Zweep said.
The company now has 50 LNG-powered Peterbilt trucks, representing about 15% of its total truck fleet.
“The entire ag industry that we service in British Columbia is being serviced by an LNG vehicle today, whether it’s dairy or flour, everybody is being the beneficiary of the equipment today,” Zweep said.
Environmental, costs savings
In searching for an alternative to diesel, natural gas seemed a solid choice given the fact it’s so abundant in North America, Zweep said. Vedder is able to control its fuel management programs without worrying of a price increase due to a supply/demand issue.
“In British Columbia we have over 100 years of natural gas resources available,” Zweep said. “The natural gas consumed in our vehicles today is coming from natural gas deposits in our own province.”
LNG costs about 30% less than diesel, Zweep said. However, there are more upfront costs for equipment.
“Because you have additional expenses, you need to be able to offset that over time,” he said. “That depends on the fleet scenario and the utility you get out of the equipment.”
On the environmental front, the company’s LNG-powered trucks are producing 25% to 35% less greenhouse gas emissions than traditional diesel trucks. In addition, the LNG engines operate at a lower decibel level than a traditional engine, so it’s reducing noise pollution as well, Zweep said.
According to Natural Resources Canada, an LNG truck driven 190,000 kilometers per year produces 70 fewer tonnes of GHs per year compared to a diesel truck.
For Rogers Foods, Rossner said reducing distribution costs, while seeing quantifiable environmental benefits, is a push/pull challenge that’s not achieved overnight.
“When Vedder Transport first approached us with their LNG, cost-saving and green initiative, we saw a proactive way to begin the process to test their ‘all-in’ bulk liquefied natural gas (LNG) truck delivery costs compared to diesel powered unit expense,” Rossner said.
About 15 to 18 of Rogers Foods deliveries each week use LNG powered pneumatics, Rossner said. When deciding whether to adopt the LNG program, he said the pros included emission reductions and surcharge savings with each shipment. No cons have materialized, Rossner said, especially since net highway load weights have not changed.
“For the last three months Vedder’s LNG pneumatic loads have retained the same net weights, but the fuel surcharge percentage of revenue rates have dropped from almost 0.12% to 0.01%,” he said. “While we have not quantified the positive emission component, it is the significant drop in fuel cost that has caught our attention.”
Rossner said as the awareness grows about the cost savings surrounding LNG trucking, and fueling stations become available in the key geographic market areas the company serves, Rogers Foods anticipates increasing its use of LNG.
Vedder would like to increase its LNG fleet, but there is a significant up-front cost factor. The equipment itself is about 50% higher than a traditional diesel truck. Additional technology has to be purchased to operate the LNG engine, and the chassis has to be reconfigured so the vehicle can meet governmental regulations.
LNG trucks for Vedder’s application are 1,899 kilograms heavier, so adjustments have to be made so there is no loss of payload on behalf of the client, Zweep said.
Some funding for the trucks came from the natural gas utility company in the province. The utility had been searching for alternative uses for natural gas in order to increase consumption, Zweep said. With the recent drop in natural gas consumption, the utility company was pushing less product through its set infrastructure, causing costs to rise.
“Our 50 LNG vehicles will consume the natural gas equivalent of 35,000 homes per year,” Zweep said. “So we’re keeping the cost of natural gas down for rate payers, and driving more production through the infrastructure.”
In cooperation with FortisBC, Vedder is building a LNG fuelling station in Abbotsford. Vedder can refuel its vehicles on its own premises at rates regulated by the British Columbia Utilities Commission.
“Today we have a temporary fuel station. We’ve exhausted its capabilities and have begun construction of a permanent station that will be able to handle a considerable volume,” Zweep said.
Vedder has been recognized as a leader in greening the environment and is one of the first in its marketplace to adopt LNG vehicles in a trucking application.
“We are able to better manage our fuel management program because of the cost differential between a barrel of oil and a gigajoule of natural gas. That’s good news to our customers because they’re able to drive pricing down and the cost of delivering product to market,” Zweep said. “We’ve created a much healthier environment for our own staff, just in the noise pollution alone.”
The basics of liquefied natural gas (LNG)
Liquefied natural gas (LNG) is an odorless, non-toxic and non-corrosive liquid, and is simply natural gas in its liquid form. It is converted to liquid by cooling it to -260 degrees F (-160 degrees C). The process reduces its volume by a factor of more than 600, similar to reducing the volume of a beach ball to the volume of a ping-pong ball.
In its liquid form, natural gas can be transported efficiently by sea or truck. It can remain in the liquid state to -116 degrees F. Turning natural gas into a liquid removes most of the water vapor, butane, propane and other gases.
LNG can be used to power heavy-duty vehicles like buses, delivery trucks and garbage trucks.
It is typically stored in special tanks below ground to maintain the low temperature. When it warms, a vapor cloud can form, which can become flammable when the natural gas mixture is between 5% and 15%.
If LNG were spilled, it would not result in a slick. It evaporates quickly and disperses, leaving no residue. No environmental clean up is needed for LNG spills on water or land.