Natural gas use by the US trucking industry – how fast can it happen ?

An article in the New York Times (April 22, 2013) describes the growing use of natural gas in the US trucks, with the industry consuming over 3 million gallons of diesel fuel daily. Natural gas use is estimated to cut costs 30 to 40% per mile, saving $1.50 per gallon currently. But, with natural gas trucks being more expensive, federal taxes (12.5% excise tax) hit harder on these trucks and thus serve as a disincentive. If US exports of natural gas grow, then domestic prices may rise. But retailers and shippers like WalMart and Nike, like the associated carbon footprint of natural gas and thus may drive demand for its use. How should an engine manufacturer like Cummins plan for adoption of natural gas in US trucks ? How should individual transport companies plan their deployment i.e., should it be adjusted to avail of tax credits and subsidies by state to minimize overall costs ? How should investments in natural gas filling stations unfold to make them economically justified and should the state and Federal government lead by committing to its use in their vehicles ?

About aviyer2010

Professor
This entry was posted in Operations Management, Service Operations, Supply Chain Issues, Sustainability and tagged , , , , , , . Bookmark the permalink.

One Response to Natural gas use by the US trucking industry – how fast can it happen ?

  1. Couldn’t we see private hubs for natural gas? If individual companies convert, they don’t need other companies providing their gas at a pump. They just need their own depots. It would be a way to incrementally implement natural gas adoption. The only trick is getting Mack on board since Wal-Mart certainly won’t be building the trucks.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s