Does Switching Trucking To Natural Gas Make Sense?

T. Boone Pickens is trying to start a movement to convert the trucking industry to natural gas. The question is whether this idea really makes sense in the modern world?

Why would anyone want to switch any transportation to natural gas? The answer is simply resources. Diesel fuel is expensive and it is also a derivative of oil. As we all know, oil is going up in price and becoming harder to find. As this trend continues, it is expected that the price of a barrel of oil is going to increase dramatically from even the high prices today. 

Natural gas is seen as the answer because, well, it is plentiful. There has been much talk about Alaska containing huge reserves of oil. This is actually incorrect. The USGS has done an extensive study and suggested there are less than a billion barrels. Considering the trucking industry alone uses 35 billion barrels a year, this isn’t much. The good news is the USGS found that while oil might be scarce, there is an absolute ton of natural gas and there will be more than enough for our needs for a very long time to come. 

Natural gas freight trucks already exist. They are not particularly popular, however, for a simple reason – they are expensive. The cost an additional $50,000 or so, which is a sizeable chunk of change. Having said that, owners more than make back this cost in fuel prices. With diesel prices well over $4 a gallon, you will find the fact the equivalent amount of natural gas is about $1.50. That is a huge saving and given the fuel use of an average truck, more than covers the additional $50k cost fairly quickly. 

The rather obvious for this change is infrastructure. Simply put, the average truck stop is not exactly overrunning with natural gas pumps. To deal with this, Pickens is trying to get Congress to create a $5 billion fund that will account of this needed infrastructure. There is no clear indication how Congress will address this. 

Will we see the trucking industry roll over to natural gas anytime soon? Given the price pressures associated with oil, I tend to think we will.