News & Events

21 Oct 2011
CNG
More US Towns Are Requiring Natural Gas Garbage Fleets

Five years ago, when the Long Island town of Smithtown passed a law requiring its garbage and recycling collectors to ditch their diesel haulers for trucks run on compressed natural gas (CNG), it was seen as a surprising step.

At the time, only two of the nation's truck builders—Autocar in Indiana and Oklahoma's Crane Carrier Company—were making natural gas trash trucks. And virtually all their orders went to towns in Southern California, which had switched to CNG years before.

"It was a very bold decision. No one had done it on the East Coast," said Joanna Underwood, president of Energy Vision, a research organization that gave Smithtown guidance on its mandate. "None of the haulers on Long Island had ever used a natural gas truck—or practically had ever seen one."

Today, Long Island has more than 100 CNG haulers, as municipalities throughout the New York area have followed Smithtown's lead. Industry leaders say these ordinances—which have also spread nationwide—have stoked demand for natural gas trucks and helped encourage nearly every waste truck maker in America to develop a CNG model.

Jeffry Swertfeger of McNeilus Truck and Manufacturing in Minnesota, a leading manufacturer, said his firm began making CNG sanitation trucks in 2006, after demand rose "astronomically." He credited laws like Smithtown's with providing "a huge benefit.

"We now have fleets who have made it very clear that they are working toward 100 percent CNG products in the future," he said.

Veteran CNG truck builder Autocar now supplies over half of Smithtown's 22 trash and recycling trucks. (Crane Carrier supplies the rest.) This year, two-thirds of the 2,100 waste collection trucks it will roll out will be CNG—up from a quarter just three years ago.

"There is no significant [waste] hauler in the country that has not either switched or investigated switching to natural gas," said Tom Vatter, Autocar's vice president of sales and marketing. "If they're not looking at natural gas, then they're really not connected to what is going on."

Compressed natural gas is composed mostly of methane and runs in converted internal combustion engines. Advocates champion the fuel for its environmental benefits and low costs. The cars release 25 percent fewer greenhouse gas emissions than diesel and far fewer emissions of toxic pollutants. A gallon of CNG is about half the cost of a gallon of diesel, saving fleets thousands in fuel costs.

But some clean car supporters are skeptical about CNG, due to the boom in shale gas drilling and the accompanying process of hydraulic fracturing, or fracking. The controversial practice has increased from 1 percent of U.S. gas production in 2000 to about 15 percent today. Residents across gas country have blamed it for seeping toxic fluids into their drinking water supplies.

John Cross, a federal transportation advocate at Environment America, said his group won't support natural gas trucks unless and until fracking is proven as safe as drillers say it is. "[Fracking] creates a lot of enormous obstacles to natural gas becoming an effective alternative to oil."

 

Soaring Diesel Costs a Major Factor  

 

For Smithtown, a town of 118,000 people some 35 miles from New York City, the decision to swap its fleet of diesel sanitation trucks for CNG came in 2006, while it was preparing to solicit bids for contracts with local garbage and recycling firms.

The weak economy was pushing officials to find new ways to cut costs. That year the price of diesel fuel was almost ten times what it was a decade earlier, and rising.

Historically, diesel has cost less per-gallon than gasoline. But strong demand from big diesel consumers like Europe and China—plus higher production costs as a result of U.S. EPA restrictions on diesel pollutants—have helped push the fuel prices to has high as $4 per gallon today.

"The cost of petroleum-based fuels has become virtually unpredictable with wide price swings, and that wreaks havoc on a municipal budget," said Russ Barnett, who directs Smithtown's environment and waterways department and who pioneered the town's CNG mandate.

"We were looking for a fuel that would give us some predictability so that we could budget accordingly," he said. "We were also interested in reducing our reliance on imported energy sources and going with domestic supplies."

Compressed natural gas costs about $2.00 per gallon and is often sold to fleets under fixed-rate contracts from fueling station operators. The savings from CNG are potentially enormous for operators of garbage trucks—up to hundreds of thousands of dollars per year for a fleet the size of Smithtown's, said Barnett. With their frequent stopping, starting and idling, the trucks get just 2.8 miles per gallon and burn about 10,000 gallons of diesel per year.

For Long Island towns, natural gas simply makes more practical sense than other homegrown alternative fuels, said Rita Ebert, program coordinator of the Greater Long Island Clean Cities Coalition, a chapter of the U.S. Department of Energy's alternative transportation initiative.

CNG stations can access natural gas with relative ease from the National Grid, a regional power supplier with natural gas pipelines running across Long Island. Biodiesel and ethanol, on the other hand, would have to be trucked in from other states and would cost more per-gallon than the local natural gas, Ebert said.

The coalition advocates for all types of alternative fuels and is working to develop electric vehicle charging infrastructure, said Ebert. But local interest remains highest for CNG. Most of the nearly $15 million in federal stimulus the coalition has helped the area's towns allocate is going to buy CNG trucks and build refueling stations.

 

Smithtown Finds Subsidies, Lures Pickens

 

In 2006, Barnett began helping to draft what he called the "Smithtown mandate," the first municipal policy outside of California to require its waste management contractors to supply only CNG trucks. The mandate took effect on Jan. 1, 2007.

Manhattan-based Energy Vision and Smithtown helped the contractors apply for federal incentives, like the now-expired Section 1341 program of the 2005 Energy Policy Act. The program provided a crucial tax credit worth up to $32,000 to cover the price difference between a new CNG truck and a traditional diesel vehicle, which is still large but dropping.

A diesel garbage truck costs around $170,000. Several years ago the natural gas version was $60,000 more, said Underwood, but today that difference is down to about $30,000. According to Autocar's Vatter, the drop is largely due to the added cost of adding and maintaining filters and emissions control systems to diesel engines. Over the past decade, EPA has passed regulations under its Clean Diesel Program forcing manufacturers to cut soot, smog and greenhouse gas emissions from diesel engines.

Smithtown was able to attract Clean Energy Fuels, the natural gas fuel provider that energy magnate T. Boone Pickens co-founded, to build a CNG refueling station and guarantee stable prices for its fleet. It can cost several million dollars to convert a gasoline station into a CNG station or build one from scratch.

With Smithtown's station in place, the town's leaders began adopting other CNG vehicles, like street sweepers, snow plows and highway maintenance trucks.

 

The Smithtown Mandate Spreads

 

In 2009, when the nearby town of Brookhaven solicited new bids for its 67-vehicle garbage and recycling fleet, it, too, decided to require CNG. In 2010, officials in Huntington issued a similar mandate and collaborated with neighboring Smithtown to build a second CNG refueling station. The three towns together run nearly 130 CNG trash trucks, with nearby towns looking to add some 60 more.

Long Island has 25 CNG stations completed or under construction. Nationwide, about 900 natural gas fueling stations are available in 46 states. One-fourth are in California alone. New York has the second highest number of stations, with around 10 percent of the total.

Towns and public school districts across New York and New Jersey are steadily phasing in more natural gas garbage trucks and school buses, said Underwood of Energy Vision. In total there around 110,000 natural gas cars, vans and trucks on U.S. roads today.

"The energy and enthusiasm on the municipal level is one of the main drivers of this movement now," she said. 

According to Energy Vision's last official count back in 2005, nearly 60 communities nationwide had adopted CNG mandates for their garbage fleets—almost all of which were on the West Coast and in Texas. Barnett of Smithtown believes that dozens of other towns have passed ordinances in the last few years.

"I get calls from all across the country, but also from outside of the country" from towns looking to implement their own Smithtown mandate, he said.

 

Builders Cash In on CNG Trash Truck Boom

 

Truck manufacturers have moved quickly to respond to increasing demand for CNG garbage trucks.

In 2006, there were only around 1,500 such trucks on U.S. roads, all made by Autocar and Crane Carrier Company. Today, more than 5,000 garbage and recycling trucks are powered by CNG—out of around 140,000 total—and virtually every big hauler manufacturer makes a CNG model.

Vatter of Autocar said his company, which has built CNG trucks for 15 years, used to send nearly all its natural gas trucks to California. Now it's pushing east to meet demand for CNG from the trash collection industry. "We're selling natural gas garbage trucks in just about every state," he said. "Even the states we haven’t sold in yet, the haulers are talking about it."

He added that "the majority" of the orders it gets from the two industry giants,Waste Management and Republic Services, Inc., are for natural gas trucks.

Vatter noted that his company's growth in the CNG sector hasn't slowed this year, despite the absence of the Section 1341 tax credit for alternative vehicle purchases that expired last year. EPA regulations to clean up diesel engines have enabled CNG trucks to compete with conventional trucks without federal incentives, he said.

"The costs of the two trucks have really come closer and closer to each other, and that is part of the driving force to this big explosion of natural gas [vehicles]," Vatter said. "Every aspect of this industry is pushing people to natural gas trucks."

 

Subsidies, Fracking Potential Obstacles

 

Not everyone agrees with that assessment. Many advocates say the renewal or extension of earlier subsidies is critical to get cities and towns to switch to cleaner fleets, given local governments' budget strains.

Under the federal energy act, private firms or municipalities with plans to build a CNG station can receive tax credits up to $30,000 off the project costs. A separate program gives fuel providers tax breaks worth 50 cents per gallon. Both are set to expire at the end of this year.

In Washington, natural gas proponents are pushing the NAT GAS Act of 2011, a House bill first introduced in April and backed by Pickens and other industry giants. The legislation would last five years and provide tax credits of up to $64,000 for new CNG truck purchases—double the amount offered under the federal energy act. It would also triple the existing tax break for fueling stations to $100,000.

A U.S. House subcommittee held a hearing on the bill back in September. Its fate remains uncertain in a Republican-led Congress increasingly resistant to new spending and reluctant to invest in alternative energy programs. 

Underwood said a lack of federal subsidies would "economically penalize" towns that want to adopt CNG fleets but can only afford diesel.

Another potential obstacle to putting more natural gas trucks on the road is growing opposition to fracking.

Underwood explained that most natural gas fuel is derived from conventional drilling methods. However, she said she understands concerns of some CNG opponents and supports EPA's plans to increase oversight of fracking. "This industry needs to be regulated like every other extractive industry in this country," she said. "Until the industry is effectively regulated, I think it is eminently reasonable for states and local areas to say 'no' [to fracking]."

Cross of Environment America said his organization backs measures to boost fuel efficiency and electrify vehicles over efforts to put more natural gas cars on the road. But if concerns related to fracking were resolved, the group could support natural gas as a bridge fuel for certain trucks, including garbage haulers, whose sheer size and fuel consumption pose problems for electrification.

"With heavy-duty vehicles, we understand there are more challenges," he said. "We are interested in looking at alternative fuels such as ... natural gas, should it be sustainably extracted, which we just don't have the capacity to do right now."