Slowly But Surely -- Reaching a Tipping Point -- Natural Gas

"Anon 1" called attention to a couple of important stories regarding natural gas:

Navistar and Clean Fuels ink deal.

Natural gas will become a more popular fuel for commercial trucks if Navistar International and Clean Fuels Corp. can help it, and they intend to.

T. Boone Pickens, the oilman-turned-gas promoter whose BP Capital owns Clean Fuels, joined Navistar executives to announce a deal yesterday morning at the truck builder's new headquarters in Lisle, Ill.

The agreement will see Navistar building more International trucks with natural gas engines, while Clean Energy will build more filling stations for truckers who commit to using the comparatively inexpensive and increasingly abundant fuel.

Same story, different source.

Ustian – joined by T. Boone Pickens, chief investment officer for BP Capital Management, Andrew Littlefair, president and CEO of Clean Energy, Jim Hebe, Navistar’s senior vp-North American sales operations, and Jerry Moyes, president of Swift Transportation – revealed that this new business alliance will require fleet customers to buy natural gas fuel under contract from Clean Energy for a set period of years as well as lease natural gas-powered trucks from Navistar.

In return, fleets avoid paying the often significant five-figure premium charged for natural gas-powered trucks versus their diesel-powered brethren – charges that can range from $27,750 to over $72,000 per unit, depending on the vehicle’s class, according to recent study by global consulting firm Frost & Sullivan.

Even after accounting for the cost of the contracted fuel price and truck leases under the program, Navistar’s Hebe contends that fleets should still recoup savings from the lower cost of natural gas versus diesel on the order of 50 to 70 cents per gallon.

Slowly but surely reaching a tipping point -- when a trucker can be assured of finding natural gas on any interstate.  And unlike automobiles, trucks have a longer range when fully fueled, requiring fewer refueling stations on any given cross-country segment. My hunch is truck stop operators don't want to be left out.

Years ago there was a fairly important truck stop west of Williston, but it did not offer truckers the amenities they could find at truck stops in Fargo and Minot. Over time truckers increased their range, and simply bypassed the truck stop in Williston for better spots down the road. Likewise with natural gas, at some point, truck stops will be missing the action if they don't offer natural gas.

I haven't been following the Pickens - Congress natural gas issue, but the Pickens bill was not passed by Congress. But the government provides huge tax breaks for those who buy the ill-fated GM Chevy Volt. I don't get it. Well, actually I do.