This week, we’ve got gas — natural gas, renewable natural gas and renewable diesel fuel. Amid the buzz around battery-electric trucks, drop-in fuels often get short shrift. That might be shortsighted.
It’s a gas
Except for devoted fleets — think refuse haulers, school buses and some small and midsize fleets — natural gas gets little respect and practically no sustained growth. Though it is far cheaper and pollutes less, it is still a fossil fuel derived from oil.
In the green swing in the U.S. — a majority of Americans now believe we have some responsibility for the plant getting warmer — California is no longer a lone voice. State policy makers are all-in on electric vehicles. But California also makes enough renewable natural gas (RNG) from methane to run 20% of the heavy-duty trucks that traverse the Golden State.
RNG is winning fans across trucking. Amazon this week agreed to purchase RNG from Clean Energy Fuels — and it might even be getting into the business. RNG can reduce greenhouse gas (GHG) emissions by up to 382% depending on the source, according to the advocacy group Natural Gas Vehicles for America.
Then there’s Cummins Westport, the joint venture that makes practically all the natural gas engines used in the trucking industry. The JV goes away at the end of the year. But Cummins (NYSE: CMI) will keep making the engines and possibly bring a 15-liter version to the U.S. that it introduced in China last year.
If that happens, long-haul fleets would get another option for cheaper fuel and a smaller carbon footprint, so small as to be invisible. When methane that burns off landfills into the atmosphere is captured as fuel and runs through a natural gas fuel system, the result is negative net carbon.
3 Questions: Hugh Donnell
Hugh Donnell is the business growth and development leader at Cummins Westport, a 10-year joint venture with the engine maker. We talked about the prospects for RNG during the FreightWaves Net-Zero Carbon Summit on Earth Day. You can hear our whole conversation here. A few highlights:
FREIGHTWAVES: How does RNG break through the hype of battery electrics?
DONNELL: Renewable natural gas will give you the best operation. With a battery-electric vehicle, you’ve got to be aware of how long you can keep it charged. Renewable natural gas can keep you operating as long as you can get fuel in the tanks. So, you’re not limited operationally.
FREIGHTWAVES: What are the drawbacks?
DONNELL: It’s just a matter of changing the fuel over. From an operations standpoint, maintenance is very similar. Refueling time is about the same. From an operational aspect, it is the least disruptive of all the alternative technologies being offered that are zero or subzero emissions.
FREIGHTWAVES: How do you make the case for RNG?
DONNELL: I think the case is pretty simple if you allow the technologies to come to market that are commercially viable in addition to being environmentally viable. What is deployable when, and is there a path to those technologies? We believe there is, certainly for many applications in the goods movement space.
Lovin’ on renewable diesel
There’s another renewable fuel getting attention this week. The Love’s Family of Companies — best known for truck stops and travel plazas — is entering a 50-50 joint venture with Cargill and its affiliates to make and sell renewable diesel fuel beginning in 2023.
The venture will be called Heartwell Renewables and includes a new renewable diesel production plant — one of few in the U.S. — and 50 full-time jobs in Hastings, Nebraska. The plant will be able to produce 80 million gallons of renewable diesel a year.
According to the U.S. Energy Information Agency, renewable diesel shares the same fat, oil and grease feedstocks as biodiesel. But renewable diesel can be blended at higher levels. Biodiesel typically tops out at a 20% blend. Renewable diesel is produced through hydrotreating at a biorefinery or co-processing at a petroleum refinery.
Cargill Inc. will provide the tallow that is mixed into the diesel to reduce its carbon intensity and emissions. Renewable diesel is chemically identical to petroleum but it burns faster, adding engine power. There is evidence that less engine maintenance is required when running on renewable diesel.
Love’s commodity trading and logistics business Musket will transport and market the fuel. Love’s says the end-to-end system from production to retail pump is unique.
Alternative notes
Most DEF
The big news in TravelCenters of America’s (NASDAQ: TA) formation of a new eTA unit this week was a plan to open hydrogen fueling stations at two of its California locations in conjunction with fuel cell truck startup Nikola.
But TA is hardly walking away from diesel — or its aftertreatment. The company is making “a substantial capital investment” into diesel exhaust fluid (DEF), adding it to 173 fueling lanes at 40 locations. DEF is expected to be available at every diesel fueling lane across the TA network by early 2022.
TA also plans FreeWire electric vehicle (EV) charging stations in California this quarter and to start designing an integrated distributed energy resource for medium- and heavy-duty vehicle electrification under a $4 million California Energy Commission grant.
Electric ‘fixation’
Robert Bosch held its annual press conference this week at which it reiterated its commitment to green hydrogen made from renewable feedstocks like solar and wind. It plans to invest $1.2 billion in fuel cells from this year through 2024.
Volkmar Denner, chief executive of the German supplier, took a shot at the European Union for being “fixated” on electric vehicles while overlooking other low-emission transportation technologies, such as hydrogen and synthetic fuels.
“Climate action is not about the end of the internal-combustion engine,” Denner told the Financial Times. “It’s about the end of fossil fuels. And while electromobility and green charging power make road transport carbon neutral, so do renewable fuels.”
Embark-ing on commercialization
With autonomous trucking software developer TuSimple becoming a publicly traded company, watch for others to position themselves for the future. Embark Trucks, which has been making news in recent weeks over its technology, is now looking more seriously at how to commercialize itself.
The San Francisco-based startup added Citigroup Managing Director Richard Hawwa as chief financial officer and former Orrick law partner Siddhartha “Sid” Venkatesan as chief legal officer.
Two of the many things a company needs when thinking about going public — a CFO and a good lawyer.
That’s it for this week. Thanks for reading. You can get this in your email every Friday. Subscribe here.