Ryder: Collaboration is a Must for Natural Gas Expansion

By Nanci Tellam, Group Director of Environmental Services & Sustainability at Ryder

The U.S. Environmental Protection Agency calculates that freight transportation by truck accounts for approximately 20 percent of greenhouse gases generated in the U.S., and they estimate that these emissions will to continue to grow rapidly.

So it’s easy to understand why most people agree that the potential benefits of natural gas vehicles (NGVs) in commercial transportation are significant. It is cleaner than diesel, the fuel is cheaper, and supply is abundant and domestic.

Yet there are also significant challenges that must be overcome before natural gas vehicle technology can become a bigger factor in transportation and our economy. Refueling and maintenance infrastructure, especially for commercial transportation, is limited. And, there is little incentive to invest in this infrastructure without enough customers and vehicles to use them. This “chicken and egg” game keeps costs high and is a hindrance for a speedier adoption of natural gas vehicles in commercial trucking.

To overcome these challenges and support sustainable growth of natural gas, the industry needs interested customers, a viable infrastructure to support commercial transportation, and financial incentives to offset the initial increased costs associated with deploying the new technology in fleets. Putting these elements in place will require public/private collaboration so that natural gas investments can be more easily shared and more businesses can become educated about the economic and environmental benefits of natural gas vehicles.

"To overcome these challenges and support sustainable growth of natural gas, the industry needs interested customers, a viable infrastructure to support commercial transportation, and financial incentives to offset the initial increased costs associated with deploying the new technology in fleets."

We know a collaborative model works because it’s already been done successfully in Southern California. The San Bernardino Associated Governments along with the U.S. Department of Energy and California Energy Commission have worked in partnership with Ryder to develop a natural gas corridor in San Bernardino County. Through this initiative, Ryder has deployed over 200 natural gas vehicles for lease and rent to many diverse businesses and industries, along with investments in natural gas maintenance and fueling facilities. The effort will displace more than 1.5 million gallons of diesel fuel and reduce emissions by well over 4,000 metric tons of greenhouse gases every year. This collaborative model has also been replicated with willing Ryder customers and local governments in Arizona and Michigan.

These and other similar initiatives represent great progress, but there is still much work to be done. Previous federal incentives for natural gas vehicle technology expired in 2010. A few state incentive programs are available or slowly evolving in parts of the country, but awareness of these programs remains low and the application process can be confusing and burdensome.

Another hurdle that needs to be overcome is obtaining the necessary regulatory permitting for constructing or upgrading facilities for natural gas fueling and maintenance. In their current state, the standards and requirements are ambiguous and inconsistent. Often regulatory permitting requirements are not yet in place or are in process. This causes delays in the development of much needed infrastructure, while increasing the timeline and costs associated the natural gas projects. The delays can even jeopardize compliance deadlines imposed by grant programs and administrators. All of these factors can make natural gas infrastructure projects more costly and cumbersome for any business interested in deploying a NGV fleet.

By reinstating previously adopted federal incentives for the purchase of natural gas vehicles and the construction of fueling infrastructure, and improving and streamlining state and local permitting process, many of these impediments would be eliminated and some of the incremental costs associated with natural gas equipment would be reduced. Additionally, policies that focus on and facilitate increased domestic energy production will not only pave the way for broader adoption of natural gas vehicle technology, but also stimulate opportunities for improving the economy and reducing emissions associated with transportation.

At Ryder we believe natural gas is a sustainable solution for commercial transportation that will benefit business and the environment. However, a significant expansion of natural gas vehicles in the commercial transportation industry will require much greater collaboration between the public and private sectors than exists today.

Nanci Tellam is the Group Director of Environmental Services & Sustainability at Ryder.