Diesel Fuel Economy

Demand grows for natural gas waste hauling

The sudden rise in the cost of gasoline and diesel fuel has sent shockwaves throughout the American economy. Higher fuel costs seep into every aspect of doing business and result in across-the-board price increases for consumer, commercial and industrial goods and services. It has also acutely impacted waste haulers, since capital equipment (primarily trucks) and fuel expenses represent the largest expense categories, excepting labor costs.

Waste handlers do have a basic, significant advantage over long-haul truckers, however. Since most collection routes are local, waste haulers with larger fleets have the option of daily fueling natural gas vehicles (NGV) with either compressed natural gas (CNG) or liquefied natural gas (LNG). While the up-front costs of buying new trucks or converting old ones to run on natural gas are much higher than diesel, and the investment to build a filling station is substantial, the long-term savings are driving waste haulers to natural gas, not just for fuel savings, but to comply with bid mandates. As the trend towards NGVs for trash collection continues, prices for vehicles and stations are expected to continue to decline as they have dramatically over the past few years.  

Once a company amortizes the costs of capital equipment necessary to get started, the fuel savings can be as much as 50 to 70 percent below the cost of diesel, according to Scott Edelbach, general manager of Vocational Energy. Edelbach’s company builds compressed natural gas (CNG) filling stations. He outlined how the savings are achieved once a fleet has its own filling station: “A diesel gallon equivalent (DGE) is 139 cubic feet of natural gas. You have to pay the gas utility to deliver the gas and, on average, that cost across the country is typically 15 to 20 cents per DGE. The cost for the electric to operate compressors runs about 15 cents per DGE. Maintenance cost on the compressing equipment run roughly 15 cents per gallon. Then you have to add road taxes, which vary depending on the state. In states like Florida, Colorado and Louisiana there is no charge for the state road tax and in many other states the CNG is taxed at a reduced level from diesel fuel road taxes. And, of course, add federal excise tax which is 21 cents per DGE.

“Adding it all together, CNG roughly equals $1.35 to $1.60 per diesel gallon equivalent, depending on where you are in the country. If you own your own station you can get a producer credit from the federal government of $0.50 per gallon. Subtract that and you are generally in the $0.85 to $1.10 range.

56 MPG Average Fuel Economy Standard Planned for 2025 - The Diesel ...

The U.S. government could require automakers to have a fleet-wide average of 56.2 mpg (4.18 l/100 km) for its cars and trucks by the year 2025 when new standards for fuel economy and greenhouse gas emissions cars and trucks are announced in September for the period from 2017 to 2025.

Current standards for passenger vehicles are 30.2 mpg  (7.78 l/100 km) while  light trucks must average 24.1 mpg (9.75).  The figure for passenger cars is set to rise to 35.5 mpg (6.62 l/100 km)  in 2016.

Although nothing has been finalized, the Detroit News reported that federal regulators disclosed these plans in meetings with automakers in Detroit in recent days.

If implemented, the new rules would essentially double current fuel-economy standards and vehicle prices could increase prices by a minimum of two thousand dollars.  Thanks to the improved improved fuel economy, however,  the additional costs should be something one can amortize (depending on driving habits) in under three years so savings would accrue over the life of the car.

The regulations will be accompanied by stringent greenhouse gas emissions requirements.  California, which has had its own pollution and fuel economy standards in the past, is working with other states to set their own requirements for 2017-2025 although it has promised not to enact its own standards prior to then.  The potential for a number of different standards, both state and regional, would cause confusion for buyers and result in higher costs for new car buyers as well as automakes.

The proposed standards are by no means final and are likely to be adjusted over the coming weeks as additional meetings with automakers and environmentalists take place.

Diesel technology, report of the Technology Panel of the Diesel Impacts Study Committee, National Research Council

Diesel cars, benefits, risks, and public policy : final report of the Diesel Impacts Study Committee, Assembly of Engineering, National Research Council

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