With natural gas selling at rock-bottom prices, Minnesota-based Andersen Windows and Dart Transit will use it to fuel trucks.
Semitrailer trucks fueled by natural gas are hitting the road on Interstate 94 east of the Twin Cities -- another sign that commercial haulers are shifting away from diesel fuel.
Seven of the alternative-fuel trucks will be put in service this week by Andersen Windows of Bayport and its hauler, Dart Transit Co. of Eagan, executives of the companies told the Star Tribune.
It is the first cargo-hauling operation in the region to switch to compressed natural gas (CNG) fuel, which offers potential fuel savings of $25,000 a year per truck, according to industry officials.
Thanks partly to the shale-gas revolution, natural gas costs the equivalent of $1 to $2 per gallon less than diesel fuel. About a quarter of the nation's trash trucks have made the shift, and freight trucks appear to be next.
"Natural gas transportation is starting to hit a tipping point," said Rob Brown, an analyst for Craig-Hallum Capital Group of Minneapolis, who sees more companies turning to the fuel.
Brown said it's driven partly by new, better truck engines designed strictly for natural gas. Backers of the fuel also are trying to address its big obstacle -- the lack of places to fill up, especially for trucks, which need maneuvering room and rapid-fill pumps.
Two CNG filling stations designed for truckers are opening in Wisconsin this week. One of them was built in cooperation with Andersen Windows so trucks can refuel near its Menomonie, Wis., distribution center.
That station, at a Cenex truck stop off I-94, and another in Green Bay will be open to the public. As more stations are added, they will build a corridor with reliable access to natural gas between Minneapolis-St. Paul and Chicago, industry officials said.
"You need a place to start, and Andersen is creating that start," said Craig Dickman, CEO of Breakthrough Fuel, a Green Bay-based company that helps shippers reduce their costs.
His company worked with Andersen, Dart trucking and U.S. Oil of Appleton, Wis., which installed the CNG pumps at Menomonie, 90 miles east of the Twin Cities. Natural gas is piped to the station by Xcel Energy of Minneapolis.
'Natural Gas Highway'
Highway corridors with strategically placed natural gas stations already exist in California, Nevada and Utah, and have been proposed in Texas, Pennsylvania and elsewhere.
They are a focus of Clean Energy Fuels, a company based in Seal Beach, Calif., that is partly owned by Texas billionaire T. Boone Pickens. Clean Energy wants to build "America's Natural Gas Highway" with filling stations that sell a supercooled, highly concentrated liquid form of the fuel called liquefied natural gas (LNG).
Greg Roche, Clean Energy's vice president of infrastructure, said 70 natural gas fueling stations will be built this year and more than 100 in 2013, including sites on I-94 to link Chicago and the Twin Cities. A map released by Clean Energy shows the proposed sites in Chicago, the Twin Cities and near the I-90/I-94 junction in Tomah, Wis.
"It's very ambitious, very aggressive," said Roche. "It is all about a creating a nationwide network rather than a random station here and there."
In the Twin Cities, the only natural gas filling station is owned by the utility CenterPoint Energy in south Minneapolis. It offers CNG, and is open to the public, but customers must set up an account and obtain an access card. A utility spokeswoman said it can handle semitrailer trucks.
Most CNG stations, including several in the Chicago and Milwaukee areas, are not set up for trucks, but can serve taxis and other small vehicles, Dickman and others said.
Costs, and choices for haulers
The shift to natural gas fuel represents a major investment for haulers because it means ordering new trucks that can run on one of the two forms of natural gas, but not diesel.
To complicate the decision, haulers must decide whether to buy trucks configured for CNG or LNG. The engines are the same, but the fuel storage systems are not compatible.
"This is the first alternative fuel we have used in 78 years," said Dart CEO Dave Oren, whose company owns and operates the seven CNG trucks that will haul for Andersen.
Oren said the new CNG trucks cost about $45,000 more to equip than diesels. The main difference is the tanks that hold compressed gas at more than 3,000 pounds per square inch.
Andersen relies on the trucks to haul windows from its Bayport factory to the Menomonie warehouse and to customers in the region. Those trips, which may go as far east as Green Bay, are within the CNG-fueled trucks' 450-mile range, Oren said.
In practice, the trucks probably will be driven about 200 miles, leaving enough fuel to return without a fill-up, he said. While that sounds like a big limitation, "that is what most freight is hauled in the marketplace," Oren added.
Long-haul trucking, which can take drivers cross country, represents a different choice. Clean Energy's nationwide fuel network is focused on selling LNG, which packs more energy, though some of the stations may offer both types of natural gas.
Lance Whitacre, Andersen's vice president of logistics, said the company plans to study the advantages of the two kinds of natural gas for its company-owned trucks, which serve other U.S. distribution centers. For now, he said, the company still will rely heavily on diesel trucks as it takes the first steps with CNG vehicles.
One of the company's goals, he said, is reducing the volatility of fuel costs. Diesel prices, which remain above $4 per gallon in some parts of the country, often gyrate with international events, such as the current tensions with Iran.
"What we know is that natural gas has been much more stable from a price standpoint because of the domestic supply," Whitacre said.
At Dart, Oren credited Andersen with suggesting the shift to natural gas. But now, he said, other Dart customers are talking about doing the same thing.
"This is our first adventure," he said.
David Shaffer • 612-673-7090