Is a Natural Gas Trucking Corridor Feasible on California’s Interstate 5?

Switching from diesel fuel to natural gas may hold advantages for the U.S. heavy-duty trucking fleet, and California’s high volume I-5 truck corridor would be a commercially optimum location to launch first investments, according to “Exploring the Role of Natural Gas in U.S. Trucking,” the new white paper released today from the UC Davis Institute of Transportation Studies and Rice University.

Such a network could help the state enable a faster transition to renewable natural gas, biogas and waste-to-energy pathways. But it would require significant policy intervention to reap climate change advantages, our research found.

California, the Great Lakes and Mid-Atlantic areas are well-positioned to launch small, initial natural gas transportation networks for heavy trucking due to their proximity to high-volume travel corridors, our optimization modeling shows. In California, we calculate that a profitable liquefied natural gas (LNG) fueling network could be launched for less than $100 million. These findings demonstrate a possible profitable avenue for integrated oil companies with natural gas businesses to comply with California’s Low Carbon Fuel Standard and remain inside their core businesses. According to the California Air Resources Board Transportation Fuels Branch chief Sam Wade, a $25 credit price could be expected to lower the production cost of renewable natural gas by over 20 cent per-gallon equivalent. A $100 credit price would provide roughly a 90-cent per-gallon equivalent cost reduction for renewable natural gas. Biogas from agricultural waste is widely used in Europe for trucks and vehicles.

Moving natural gas into the freight sector is one way to protect U.S. domestic natural gas producers from the negative commercial impacts of a price war now brewing in international oil and gas markets as a result of the Organization of Petroleum Exporting Countries’ (OPEC) decision to favor a market share approach rather than defend prices. Oil and natural gas prices have plummeted since July, causing a drop in drilling activity in the United States and layoffs in the oil and gas sector. Our research shows that utilizing natural gas for heavy trucking would boost energy security and resilience to weather-related events by diversifying the geographic fuel supply, and potentially improve U.S. economic competitiveness by lowering costs along national freight supply chains.

But our findings reveal that stronger regulations of methane leakage along the natural gas supply chain and stricter efficiency standards for natural gas heavy-duty truck engines are needed for natural gas to advance low carbon fuel goals. The U.S. Environmental Protection Agency (EPA) is moving forward with stricter limitations on methane leakage from wellhead operations in the U.S. oil patch, and is considering new regulations for distribution systems.  Greater deployment of the High Pressure Direct Injection (HPDI) engines, rather than cost-effective but less fuel-efficient spark-ignition (SI) natural gas engine technology, would be required in order for LNG trucking to achieve climate benefits, our life cycle analysis shows.

With these stronger regulatory frameworks, LNG fuel could offer carbon reductions for heavy-duty vehicles that compare favorably with those provided by advanced technology, efficient diesel fuel engines, our new research shows.

Read the research behind the blog in the full white paper.

Read the UC Davis press release.

Listen to the webinar.