Overdrive Extra

James Jaillet

Diesel and natural gas — don’t let fear cripple your business

| December 04, 2012
International’s compressed natural gas-powered TranStar.

If you’ve not been honest with yourself since 2008, the price of diesel realistically may never settle below $4 again. It will, of course, drop below and dangle there for weeks or even months, but as the economy slowly improves, higher diesel prices are a fact of life and could, in some regard, be considered an indicator of the economy’s success: Some folks did say during the heart of the recession that we’d know when the economy was back to pre-2008 levels when regular unleaded gasoline cost $5 a gallon, which begs the question of what diesel would cost in that situation.

It’s also no secret that owner-operators aren’t the fastest to adapt to new technologies, equipment or change in general, and that’s not a bad thing — give fleets and other early adopters time to sort out new methods and leave yourself the option to pick and choose what works and what doesn’t, while giving economies of scale the chance to work their magic and bring costs down to more reasonable levels.

However, sometimes those who lag — especially in the tight rope business of one-truck ownership — could pay the price later by playing catch up or by simply not being able to compete in the marketplace because their costs (and subsequent rates) are too high.

Could this be the case for natural gas-powered trucks?

There’s news weekly of fleets replacing either a few or a bunch of diesel-powered trucks with natural gas-powered options, such as this piece today from the Indianapolis Business Journal about Monarch Beverage Co. spending $7.6 million to replace 80 percent of its fleet with CNG trucks.

Obviously, natural gas is not really a viable option for owner-operators now, and the fleets that are switching have the money and will to do something that many in the industry are scared to do. And they’re right to be wary: Natural gas vehicles are a completely untested and unproven commodity, and until that’s no longer the case, diesel is king.

However, emissions and environmental concerns of diesel aside, would you — America’s owner-operator — be willing to make the right business decision when the time comes? The decision to abandon diesel in favor of a new source of energy to give yourself equal footing in the market and the ability to compete with both fleets and other owner-operators alike?

Or will you be loyal to diesel?

It’s a tough question to ask yourself — diesel has been the lifeblood of American trucking (and the U.S. itself) for decades, and natural gas may never replace the raw power and emotional spirit that comes with diesel power.

But will you let that allegiance tear down the business you’ve worked years and hundreds of thousands of miles to build?

The good news is, you won’t truly have to answer these questions for years, and maybe by then your mindset will be a little different, as will most Americans’ — I don’t see people clamoring in the streets to toss out their gasoline-powered cars and trucks for natural gas vehicles.

But it’s probably not too early to start considering that natural gas could be a major player within the next quarter-century, and those who put their business before their diesel-powered pride may be the winners, while those who stick to crude oil power could be the ones finding a new line of work.

  • http://www.facebook.com/bruce.kolinski Bruce Kolinski

    I’m 200% in favor of creative solutions to high fuel costs, but please be just a bit wary regarding conversion to “natural gas”. The U.S. is the world’s largest producer of natural gas – and because of Federal regulation, not one cubic foot of it can be exported. This condition has glutted the U.S. with inexpensive natural gas. Beginning in 2015, the first U.S. company (Cheniere Energy) will begin exporting liquified natural gas (LNG) with other companies to follow as the corrupt insider permits are issued. This will result in U.S. natural gas prices rising to world levels fairly quickly, at which point the savings available today will no longer be realized. Just sayin’.

  • Gregory Van Tighem

    Bruce raises an excellent point. Yesterday a study completed by the federal government on exporting natural gas may even bolster his point…http://www.marketplace.org/topics/sustainability/study-supports-exporting-us-natural-gas

    The $64,000 question is will Congress allow NG exports if they cause NG prices to become too expensive for manufacturers like Dow Chemical or for heating homes and generating electricity. Particularly considering that more coal-burning plants are being replaced by NG-powered ones.

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