Local utility trust Citizens Energy Group plans to sell liquefied natural gas for use in cross-country semi trucks as a lower-cost alternative to diesel fuel.
It’s unclear whether Citizens would sell the fuel on a retail basis or to firms planning to construct liquefied natural gas, or LNG, fueling stations in the Indianapolis area, such as California-based Clean Energy Fuels Corp.
Citizens has asked state regulators for permission to make permanent the rates that were established under a 2010 pilot program to sell LNG to fuel heavy trucks.
The utility, which provides natural gas service to 266,000 customers in Marion County, aims to tap its 86th Street and Georgetown LNG storage facility.
That facility, and one in Beech Grove, buy natural gas when it is cheaper during warm weather months. The gas is chilled to a liquid state to maximize storage capacity—the equivalent of 1 billion cubic feet of gas in each LNG plant. The gas is tapped as needed during peak winter demand.
In a recent filing, Citizens told the Indiana Utility Regulatory Commission that it would cap LNG sales for vehicles at 3.5 million gallons from Nov. 1 through March 31, so that sales won’t adversely affect the safety or reliability of its gas-distribution system “and will benefit existing customers.”
The current LNG cap, under the pilot program expiring Sept. 30, is 10,000 gallons per day.
“Currently, Citizens does not have customers that buy LNG, but we do have a lot of interest. So far, eight companies have expressed interest in purchasing LNG,” said Citizens spokeswoman Sarah Holsapple.
She also said Citizens has been talking with a “couple” of retail distributors about buying LNG. “We cannot name those companies at this time,” she said.
In its regulatory filing, Citizens said it has been approached by several fleet operators and LNG station developers about buying its LNG.
“At the present time, Citizens is in active negotiations with no fewer than three different developers or fleet operations interesting in contracting LNG through the [tariff],” Citizens executive Jill Phillips told the IURC.
The company has not identified those firms. But it is known that one LNG retail station is planned by Seal Beach, Calif.-based Clean Energy Fuels for the Flying J at 1720 W. Thompson Road in Indianapolis. That location, at Interstate 465 and State Road 37 on the south side, is an oasis of truck fueling and repair facilities.
A Clean Energy spokesman said the company will begin installing the LNG retail station this summer as part of plans to build a nationwide web of stations that will allow natural-gas-fueled semis to travel coast-to-coast.
The company said trucking fleets can save about $1.50 per gallon over diesel fuel by using LNG.
“LNG on the West and on the East coasts is a very popular and prevalent fuel,” said Kellie Walsh, executive director of Greater Indiana Clean Cities Coalition, a federally funded program promoting alternative fuels.
Supporters of natural gas also cite its lower carbon-dioxide and fine-particle emissions. Fine particles, attributed mostly to vehicle emissions, are blamed for the region’s ozone problems.
LNG requires expensive onboard equipment to keep the fuel in a virtually cryogenic state. But it is cost-effective for big trucks that drive cross-country distances.
Columbus-based Cummins Inc. already offers a nine-liter natural gas engine that can use LNG or compressed natural gas, known as CNG. It typically powers buses, refuse trucks and some heavier trucks that travel regionally.
An 11.9-liter natural gas engine is in field tests and will enter full production in early 2013, said Carol Lavengood, a spokeswoman for the company’s engine division.
“Cummins believes the demand for natural gas engines will continue to increase. This is due to the low natural-gas fuel prices as well as the expanding fueling infrastructure,” Lavengood added.
Citizens’ Phillips cited U.S. Energy Information Administration data showing a 26-percent increase in natural-gas usage as a vehicle fuel from 2007 to 2010.
In Indiana, which is home to numerous truck fleets, natural gas as a fuel rose 53 percent during the period, “contributing to Citizens’ desire to make the LNG tariff permanent,” she said.
Citizens has already been providing natural gas for short-haul trucking fleets that use it in CNG form.
Iowa-based Ruan Transportation Corp., for example, runs 52 CNG-fueled semi trucks in Indiana delivering milk for Fair Oaks Farms. The Indiana Department of Transportation operates 19 dump trucks that burn CNG. Trash hauler Republic has about 50 trucks using the fuel—among a growing list of companies in the region using natural gas as a fuel.
“Interest is growing as the price of diesel rises,” said Walsh.
Use of natural gas in long-haul truck fleets is a more recent phenomenon.
Citizens said a number of fleet owners want to convert trucks to use LNG but the lack of refueling infrastructure gives them pause.
“The ability to contract LNG fuel through peaking plants, like Citizens LNG north facility, is an important interim step in infrastructure development for these fleet owners,” the company told the IURC.