IBJNews

Monarch turns to natural gas to run trucking fleet

Back to TopCommentsE-mailPrintBookmark and Share

Monarch Beverage Co. will spend $7.6 million to convert 80 percent of its trucking fleet to run on compressed natural gas in a move it says will save money and reduce emissions.

In a sign of the rising popularity of natural gas engines, the Indianapolis-based distributor of alcoholic beverages put three compressed natural gas, or CNG, trucks into service a year ago and added 12 more of them in September.

On Tuesday, Monarch announced that it will add 13 more trucks with CNG engines this month, and ramp up to 85 by the end of 2015. The engines are made by Cummins-Westport Inc., a joint venture of Columbus-based Cummins Inc. and Vancouver-based Westport Innovations Inc.

To provide CNG fuel for the new trucks, Monarch is also building a $2.3 million CNG fueling station at its warehouse at 9347 Pendleton Pike. The site is set to open in March.

Fred Dufour, Monarch’s senior vice president of operations, said it’s a good time to switch away from diesel fuel, which he believes will grow in cost, to natural gas, which has seen a boom in supply in the United States from newly available shale gas.

“We started to become concerned that with the growth of China and India, demand [for diesel] could outstrip supply,” said Dufour, who predicted that could occur sometime between 2015 and 2018, leading to diesel prices of $7 per gallon by 2018.

Even right now, the price differential is significant. Monarch locks in diesel on contract for $3.85 a gallon. But it can buy natural gas for $1.55 per gallon.

Since its trucks burn roughly 1 million gallons of diesel per year, converting 80 percent of them to natural gas could save Monarch $1.8 million per year.

CNG trucks cost at least $60,000 more than a similar-sized diesel trucks, in large part because their fuel tanks have to be able to withstand the higher pressures that force natural gas into a transportable-sized volume.

But Dufour figures the fuel savings will allow Monarch to pay off the new trucks within three years, based on the number of miles Monarch’s trucks typically drive.

It’s easier for Monarch to adopt CNG engines because its trucks always begin and end their days at the company’s headquarters. So they don’t need to find fuel while on the road.

But Dufour expects CNG engines to rise in popularity beginning in 2013. General Motors Corp., Ford Motor Co. and Chrysler Corp. all announced this year new pick-up trucks with hybrid gasoline-CNG engines, Dufour noted. If those trucks prove popular, he expects more gas stations to add CNG pumps.

Right now, there are 13 CNG filling stations around Indiana, and and about half of them are open to the public, Dufour said. For the past year, Monarch’s three CNG trucks have been using the CNG fueling station operated by Indianapolis-based Citizens Energy Group, which is called Green’s Auto & Truck Service. It is located at 111 W. Raymond Ave.

“We will see a lot more of it," Dufour said. “I think this is going to just start to roll.”
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
thisissue1-092914.jpg 092914

Subscribe to IBJ
  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

ADVERTISEMENT