How Love's Made the Business Case for Its CNG Fleet
Travel-stop chain settles uncertainty over compressed natural gas
Published in CSP Daily News
HOUSTON -- Compressed natural gas (CNG) may have a lot of advantages to diesel and gasoline, being both cheaper and relatively cleaner burning. But for retailers looking to sell the alternative fuel--and to sell fleets on the idea of adopting it--it helps to know firsthand the CNG experience.
Love's Travel Stops & Country Stores Inc., Oklahoma City, started researching CNG-powered trucks for its private Gemini Motor Transport fleet back in 2011. Gemini supplies the more than 300 Love's travel centers in 39 states with its fleet of 425 trucks. It's a hardworking crew--in 2013 alone, it hauled 430,000 loads, or 3.37 billion gallons of fuel. As Bill Cashmareck, general manager of natural gas at Love's, told attendees at the recent Natural Gas Vehicles USA Conference in Houston, "We run the wheels off our trucks."
During those early days, Gemini was unconvinced that the only available natural-gas-powered engine at that time could handle the 80,000-lb. weight of a fully loaded fuel truck. But then in 2012, the fleet participated in a beta test of a stronger engine--a 350-horsepower Cummins Westport ISX G 11.9L--and was so happy with the performance that it ordered 50 CNG trucks the next year.
The Gemini fleet now includes 25 Peterbilt and 25 Freightliner CNG-fueled trucks with 400-horsepower Cummins Westport engines. The alternative fleet runs just as hard as the conventional diesel trucks, averaging 180,000 miles per year, and filling up at the 13 Love's Travel Stops that have CNG fueling on site (another dozen are due to go online in the next few months). That being said, there are performance differences.
"The fuel capacity on board doesn't mean usable capacity," said Cashmareck, meaning because of the nature of the CNG tanks, they cannot be fully emptied. In addition, the CNG fuel system on the truck is heavier and bigger than the diesel version. The bigger the CNG tanks, the greater the truck's range, but the heavier and more expensive it will be. Gemini settled on a fueling system that could provide 400 miles of range for most of its trucks, well within their regional routes.
There is also a loss of fuel economy with CNG compared to diesel. Gemini anticipated a 12% loss, and at first was seeing an 18% decline. With its newest trucks, however, the delta has been halved to only 9%.
Some might question the business case for a fuel that provides fewer miles per gallon than diesel, powering trucks that come at a nearly $50,000 premium to conventional models; however, the return on investment for CNG has settled any of that uncertainty. Gemini was expecting a payback of a little over two years for the CNG-powered trucks. Instead, thanks to a net discount of $1.739 per gallon for CNG relative to diesel, the ROI was only a little over one year. With a tax credit from the state of Oklahoma, the ROI fell to only about one-half of a year. The total annual fuel savings: more than $43,000.
Gemini Motor Transport is a national petroleum hauler that services Love's Travel Stops wholesale and retail customers throughout the United States.