In broad discussions, the energy transition in trucking comes down to a few themes – all in tension with one another:
- Diesel will always be king.
- Maybe hydrogen can replace it for long-haul applications.
- Battery-powered vehicles can work for smaller trucking jobs like deliveries but not for 18-wheelers.
- Electricity-powered drayage trucks are a primary focus for pending big shifts in the California ports.
On the “other” coast last week, another contender for the fuel of the future – propane – was touting its benefits. But it wasn’t just talk. The Port Newark Container Terminal (PNCT), one of the facilities that make up the gigantic Port Newark-Elizabeth Marine Terminal, was rolling out a fleet of propane-powered tractors that transport containers between containerships and intermodal trains.
One of the arguments in favor of propane at the formal launch of the first vehicles toward a PNCT propane-powered fleet is backed up by recent data from the Energy Administration Administration: The U.S. produces a huge amount of propane but is not fully utilizing the feedstock in its own country. It exports a huge amount that could be consumed here if new applications were developed.
The most recent monthly data from the EIA shows the U.S. produced an average of just under 2.4 million barrels a day of propane in April, through a combination of field production and what comes out of refining. But U.S. exports were 1.678 million barrels a day. (It also imported 73,000 barrels a day.)
By contrast, 10 years ago that production figure, for April 2014, was about 1.2 million barrels per day between field production and refining. The fracking revolution has pushed up not only production of crude oil and natural gas, but propane as well.
There are two primary uses of propane in the U.S. One is home heating, with rural areas not connected to any kind of natural gas grid the primary market. (But that’s not exclusive; the supplier of the propane to PNCT for its intermodal carriers is Suburban Propane (NYSE: SPH), whose name suggests where at least some of its market is located.)
Another is as a feedstock in petrochemical production, which has grown significantly in the U.S. in large part because of the surge in natural gas liquids such as propane, ethane and butane, which are petrochemical feedstocks.
But as the export/import balance suggests, there is plenty of U.S. supply that could be tapped for applications at home … like trucking.
The event featured several propane-powered food trucks that brought a good chunk of the PNCT workforce over at lunchtime to grab a free meal.
Charlie Ferlisi, the port’s director of engineering and equipment services, who led a bus tour of the port, said the number of propane-powered tractors for the intermodal movement at PNCT is now 20. The entire fleet is 45. Ferris said he expects that number to double by the end of the year.
The company that built the propane tractors is Germany’s Mafi. The vehicles are built in Germany, but the company also has a large parts distribution center in Georgia.
During the tour, Ferris said part of his job is “to get the OEMs on board with this.” Mafi, he added, is very much on board already.
“On the tractor side, there are several different companies that are now implementing propane, which is great for us, and we have showed that there’s an initiative to move toward propane as a solution,” Ferris said.
Move to propane won’t stop with ship-to-rail movements
He also noted that the number of applications within the port that could be converted to propane goes well beyond the intermodal tractors. “We hope to implement this across the entire terminal,” he said.
Propane is not a zero-emission fuel under the Advanced Clean Fleets (ACF) rule in California which seeks to convert all trucks to zero-emission vehicles by 2045 at the latest. The ACF was to have its first implementation steps at the start of this year, but court cases delayed that indefinitely.
Ultimately, conventional wisdom is that the question of whether the ACF needed a waiver from the Environmental Protection Agency to be implemented will be settled and the rule will become law.
The biggest short-term impact would require that no drayage trucks with internal combustion engines can be added to the state’s drayage registry after Jan. 1, 2024; only zero-emission vehicles can be registered.
While the rule is not not being enforced and ICE vehicles can be added to the registry, the state has suggested that an eventual startup of enforcement may not grant ICE drayage vehicles registered this year to be grandfathered in; they’d have to be removed from the registry.
But propane is not a zero-emission technology. While Tucker Perkins, president and CEO of the Propane Education & Research Council (PERC), touted its environmental advantages relative to propane, it wouldn’t make the cut in the drayage trucks serving the Golden State’s ports.
But Perkins said that may not last.
“I do expect over time that reason will prevail and people will see that the science is clear, that these vehicles in many places are cleaner than electric,” he said. PERC worked with PNCT on adding the propane tractors to operations at PNCT.
Outright cost vs. total cost
Perkins conceded that if the only consideration in switching from diesel to propane were the cost of the fuel, that conversion would not take place.
“No one thinks about displacing diesel on a cost basis,” he said in an interview with FreightWaves on the sideline of the PNCT event. “They’re displacing diesel because diesel is environmentally difficult.”
He ticked off several differences between diesel and propane, many of which were in his more formal address to the larger crowd on the grounds of PCNJ: Storage costs for diesel are higher, nitrous oxide emissions from propane are 97% to 98% lower than those from diesel, particulate matter is almost completely eliminated by propane use, and greenhouse gas emissions coming out of an engine fueled by propane are 15% less than those coming from a diesel engine.
PERC was created following the 1996 passage of the federal Propane Education and Research Act.
Renewable diesel has made a large impact in California in particular, where the state’s low-carbon fuel standard provides users with credits that can be sold on the open market. There is also a product called renewable propane, which is a by-product of the process used to make renewable diesel, using such products as animal fats and vegetable oils as feedstock.
Perkins mentioned renewable propane when he praised propane as a transportation fuel in trucking. “When you make this migration, your shareholders win, your operators win, your maintenance staff wins, your neighbors win,” he said.
The total cost of operation will ultimately prevail over diesel, he predicted, but “it doesn’t just stop on diesel to propane. The benefits don’t stop until you get to renewable diesel, and when we stack up against all the sexy alternatives like electric or hydrogen, propane can hold its own against any of those choices. Its economics are better than all this.”
Sydney Eick, U.S. director of sales for Mafi, said there are some different steps needed for his company to make a propane-powered engine, but the engine size is “the same exact footprint” as a diesel engine. The trucks are not all custom-made, Eick said. “We have stock here in the U.S., but we also do it on an order basis as well.”
Many of the applications where Mafi has sold its vehicles have been localized, he said, citing steel mills and distribution centers as examples.
Eick echoed Perkins on the comparison of fuel costs. Asked to compare how two trucks would do side by side, one running on diesel and the other on propane, Eick said one hour of driving would likely consume a gallon of diesel fuel and 1.5 gallons of propane.
“Just on fuel, propane is probably a loser,” Eick said. “But then you’re looking at other factors such as decarbonization. If you do all the numbers, there is a substantial savings overall.”
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