บทถอดความฉบับเต็มของ The 15-Litre Engine Opens Heavy-Duty Trucking to RNG—Economics Decide What Scales

engine level, it is natural gas powered. 00:05:33.362 --> 00:05:36.062 And so the, the truck can take either. 00:05:36.273 --> 00:05:51.153 Now we have it an interesting dynamic in the United States where finally we have enough renewable natural gas produced in the country to fill all demand for CNG transportation. 00:05:51.362 --> 00:05:54.783 So that did not exist several years ago. 00:05:54.992 --> 00:06:01.653 They created a renewable fuel standard, put in the right incentives there to make the economics work. 00:06:01.653 --> 00:06:17.612 We're building renewable natural gas production plants at landfills, wastewater treatment, plants, dairy farms, that, that those guys who built those plants and put that capital to work had a reason to do that, could generate the revenues for a respectable return. 00:06:17.973 --> 00:06:21.182 So a lot of those plants have gone up in the last five years. 00:06:21.182 --> 00:06:22.562 There's a lot more coming. 00:06:22.773 --> 00:06:36.483 And now we have in the last eight months probably crossed that, that hurdle where there's more produced than there is dispensed into vehicles or demand from vehicles. 00:06:36.932 --> 00:06:41.552 So the, the key now going forward is continue to increase both. 00:06:42.517 --> 00:06:49.177 For a fleet owner, how does CNG compare with diesel on a diesel gallon equivalent basis? 00:06:50.608 --> 00:07:08.392 The quickest rule of thumb that I use, countrywide would just say would, would be to, I feel confident almost anywhere I go that I can say that, that the reduction in fuel cost per gallon will be at least a dollar 50 to $2 versus diesel. 00:07:08.973 --> 00:07:28.322 I mean, if, if you're in California or Oregon and you're looking at six to $8 diesel, if you in the US with natural gas trucks, you'd still be buying your natural gas, you could get it a dollar 50 to $2 if you had a contracted comittment of some sort with a CNG provider. 00:07:29.932 --> 00:07:42.226 And, is the CNG, RNG is that as volatile in terms of its fuel price as the petrol and diesel that we see today as a result of the war for example? 00:07:42.619 --> 00:07:52.038 No, that's, that's definitely, I mean, it's, it's almost negligible the amount of volatility in the natural gas market compared to the diesel market. 00:07:52.189 --> 00:08:16.668 But, you know, I think a lot of that has to do with, we have proven that we have a fossil fuel based natural gas, you know, supply that is domestic, that is readily available almost all year round Now, do you see spikes in natural gas once in a while, in January or February when we get hit with a real cold spell out of nowhere? 00:08:16.728 --> 00:08:17.689 Yeah, that happens. 00:08:17.689 --> 00:08:22.218 It, it really never continues to, know, stay that way for too long. 00:08:22.369 --> 00:08:23.238 It goes back. 00:08:23.538 --> 00:08:31.113 And for fleets are there particular profiles that make more economic sense for RNG and some that don't? 00:08:31.680

--> 00:08:40.140 I, I think there are, I think a lot of different organisations and people are doing the studies today to try to get the details worked out. 00:08:40.451 --> 00:08:49.770 I'd say at a very high level you want to make this argument to switching to, to natural gas or renewable natural gas on economic terms. 00:08:49.770 --> 00:08:54.510 It has to work for the companies first before it can be on the environmental terms. 00:08:55.201 --> 00:09:09.390 On the economic basis what you have at the most basic level is you have a truck that today you're going to have to pay about probably 70 to $90,000 more for the truck. 00:09:09.990 --> 00:09:12.061 And so you want to return on that investment. 00:09:12.811 --> 00:09:18.971 And so the more miles per year that you drive a truck, the faster you have a return on. 00:09:20.600 --> 00:09:20.780 So that, 00:09:21.085 --> 00:09:21.355 Sure 00:09:21.471 --> 00:09:39.980 the interesting qua thing there though is a lot of the trucks that are staying out on the road going long distance overnight, might think they drive the most miles so they get a return faster, but they get worried about the fact that is it gonna be harder to find a fuel station to fuel up? 00:09:39.980 --> 00:09:42.530 Am I really gonna get the prices I want? 00:09:43.149 --> 00:09:52.230 But then you get back to what's the best way to really roll this industry out and roll this out is to try to find maybe the trucks that we call return to base. 00:09:52.230 --> 00:09:55.350 At the end of the day, they go back to the base. 00:09:55.441 --> 00:09:58.530 You could have a fueling station behind the fence that's private. 00:09:58.530 --> 00:10:05.971 You could have a provider like us build geo fuel station within a block of two blocks, half a mile of your terminal. 00:10:06.061 --> 00:10:10.831 And so every night you get fueled up, the drivers go home, they come back the next day. 00:10:11.971 --> 00:10:20.341 You can find different types of trucking operations that the truck does a different number of miles per year. 00:10:20.400 --> 00:10:28.171 Some truck operations may be in some port areas, dray trucks may be only doing 30 to 50,000 miles a year. 00:10:28.410 --> 00:10:34.500 There's other in town return to base operations that still get 80 to a hundred thousand miles a year. 00:10:34.860 --> 00:10:44.600 If you get 80, if you get 80 to a hundred thousand miles a year, I think I believe pretty confidently that your payback period can be three years or less. 00:10:45.011 --> 00:10:48.402 And how do maintenance costs on an RNG truck compare with diesel? 00:10:49.182 --> 00:10:50.831 Yeah, there are differences. 00:10:50.922 --> 00:10:53.322 Some are very good. 00:10:53.407 --> 00:11:01.386 The biggest thing you don't have with an RNG engine, an RNG truck or CNG truck is all of the after treatment. 00:11:01.807 --> 00:11:03.756 All of the DEF fluid. 00:11:03.756 --> 00:11:13.807 There's DEF systems, there's technologies, you know, there's, there's additional equipment in the engine, in the truck, and it has to run and, and be taken care of. 00:11:13.807 --> 00:11:17.677 So you get rid of parts and things that can break things. 00:11:17.677 --> 00:11:23.126 You have to take care of additional fuel, you know fluids that you have to add to the truck. 00:11:23.307 --> 00:11:28.106 So that would, you know, naturally you start thinking, okay, I'm gonna save money on maintenance. 00:11:28.441 --> 00:11:28.856 Now. 00:11:28.917 --> 00:11:41.576 All those savings, you don't keep all of those savings because this engine is little bit different and it has, the major thing it has that the other doesn't have is it has spark plugs. 00:11:41.907 --> 00:11:42.866 What does that lead to? 00:11:42.866 --> 00:11:55.616 That leads to really, the preventive maintenance schedule is a little different and you'll stop the truck and bring it in a little more often than the diesel truck to have the spark plugs changed. 00:11:55.856 --> 00:12:02.907 So I, I usually just go with the maintenance over overall, over the lifetime is about the same. 00:12:03.626 --> 00:12:05.216 The savings are on the fuel. 00:12:06.296 --> 00:12:12.910 Fair enough And if the economics on the fuel can work so well why have heavy duty fleets been so slow to switch over? 00:12:13.594 --> 00:12:15.663 Oh, I think there's, there's a number of things. 00:12:15.714 --> 00:12:24.234 If I was gonna list them out, number one, as I said, this difference in price today is probably 70 to 90,000. 00:12:24.594 --> 00:12:27.563 Last year, I might have said 80 to a hundred thousand. 00:12:27.563 --> 00:12:30.293 I think the, the pricing is getting a little better. 00:12:30.563 --> 00:12:33.144 It's all about payback and economics. 00:12:33.234 --> 00:12:34.703 So I think that's a lot of it. 00:12:34.764 --> 00:12:38.063 But there's also, hey, this is brand new. 00:12:38.333 --> 00:12:39.774 This is brand new technology. 00:12:39.894 --> 00:12:42.774 We've never had a 15 litre natural gas engine. 00:12:43.134 --> 00:12:51.884 And if you get to people who've been in the trucking industry for decades not every engine change in engine that's come out in the market. 00:12:51.974 --> 00:12:59.594 And it's not, whether it's Cummins or a manufacturer, it's just the fact is, is not every time has it gone perfectly. 00:12:59.894 --> 00:13:07.183 So I think with this being early stage, some companies are gonna say, I don't want to be the first guy to test this out. 00:13:07.573 --> 00:13:09.524 So that's, I think, another part of it. 00:13:09.524 --> 00:13:20.504 And then the third is everybody's so used to seeing a truck stop at every exit on the interstate and never thinking about where am I gonna fuel up? 00:13:20.594 --> 00:13:23.923 You do have to do some planning, you have to think about it. 00:13:23.953 --> 00:13:27.943 There's not the same level of infrastructure on every interstate yet. 00:13:28.083 --> 00:13:36.303 We like to think that

actually that could end up being an advantage'cause we can set these things up more efficiently for the operation. 00:13:36.573 --> 00:13:39.094 But those, you know, those are definitely big concerns. 00:13:40.535 --> 00:13:45.390 Okay and what's harder about deployment than people expect 00:13:46.357 --> 00:13:48.697 What has been harder about the deployment? 00:13:48.878 --> 00:13:56.677 I, I think, I don't know if I'd say harder than they expected, as much as what is, what are they watching out for? 00:13:56.778 --> 00:14:00.587 The mechanics need to be trained. 00:14:00.827 --> 00:14:06.806 It's not a long, it's not a long process, but they do need to be trained on what is different. 00:14:07.577 --> 00:14:09.932 The driver needs to be trained a bit. 00:14:10.072 --> 00:14:17.538 It is not drastically different, but it works better to train them on how does this truck drive, what's the best way to drive it? 00:14:18.347 --> 00:14:35.957 The maintenance shops, the places where they work on these trucks in order to work on these trucks under a roof, or enclosed those shops need some changes in their infrastructure, some new safety systems, some new venting that can cost money. 00:14:36.177 --> 00:14:43.827 That has not been, you know, exactly take, you know, that that doesn't exist ever in every, at every exit in every city yet. 00:14:43.827 --> 00:14:48.298 So the infrastructure to support, just keeping the trucks on the road. 00:14:48.567 --> 00:14:59.217 If the trucking company is worried that they get halfway between, say, Miami, Florida and Atlanta, Georgia, the truck breaks, is there gonna be somewhere where they can work on this? 00:14:59.248 --> 00:15:00.508 They can't be down. 00:15:00.538 --> 00:15:02.727 It's a hard, you know, trucking is hard. 00:15:03.018 --> 00:15:04.668 They gotta be very efficient. 00:15:04.727 --> 00:15:07.518 They've gotta do a very good operation every day. 00:15:07.518 --> 00:15:13.128 And if you get a truck down and you can't fix it, they can be costly, just, you know, directly to the truck. 00:15:13.128 --> 00:15:17.748 And very costly on the operational efficiency in your service to your customers. 00:15:19.234 --> 00:15:24.094 Okay where do you see RNG fitting in relative to battery electric trucking? 00:15:24.735 --> 00:15:28.905 Yeah, I think the future is one where there will be kind of fit for purpose. 00:15:29.182 --> 00:15:40.822 You're gonna see trucking companies and private fleets look very closely at all technologies and figure out which one is best for their business. 00:15:40.822 --> 00:15:50.452 And I think you'll see trucking companies that before you know it, have diesel trucks, CNG trucks, electric trucks, and maybe some days some hydrogen trucks. 00:15:50.682 --> 00:15:56.097 And I think they're gonna find an op, you know, different routes and operations where each one are the best choice. 00:16:25.781 --> 00:16:32.561 All right and do you think RNG is competing with electrification or just buying time for sectors where batteries still struggle 00:16:33.269 --> 00:16:36.029 Yeah, I think that's a, that's a big discussion these days. 00:16:36.194 --> 00:16:41.249 I, I think there's a, i I, I can't say that I'm gonna have the answer. 00:16:41.309 --> 00:16:46.049 I don't know if anybody knows for sure and is gonna be right or wrong or knows they're right or wrong. 00:16:46.099 --> 00:17:03.529 But I, I do believe there's so many great things about the RNG ecosystem and the price points and the economics and where the prices can go in the future that I think we will, we'll always have a, a great part of the market in the future. 00:17:03.579 --> 00:17:19.808 There are others that think that that batteries are gonna get, even better and better, and that the costs are gonna get down and the range is gonna go up, and the rules around weight of the shipment are all gonna work out that electric can take everything. 00:17:19.808 --> 00:17:25.868 But I, I have my personal views, I have a hard time seeing that happening in 10 to 20 years. 00:17:26.551 --> 00:17:31.652 Critics would argue that RNG risks prolonging combustion dependency. 00:17:31.652 --> 00:17:33.272 Do you think that's a fair criticism? 00:17:34.049 --> 00:17:46.480 I, I, I think I, I guess the way you put it, my reaction is combustion dependency is not in itself a bad thing. 00:17:46.600 --> 00:17:48.190 I guess that's kind of my reaction. 00:17:48.190 --> 00:18:05.880 If you, if the combustion is RNG and you do the detailed study of what is RNG, what does it come from and what does it do for the environment and the atmosphere you might come back around to say, it's not the combustion that you don't like. 00:18:05.880 --> 00:18:07.799 It's the fossil fuels you don't like. 00:18:07.799 --> 00:18:31.110 And it's, yes, there's combustion and emissions at some level out of that truck, but have not developed a better way of incentivizing the, the improvements, the corrections, the adjustments that these RNG production plants, is growing, landfills are going to continue to exist. 00:18:31.140 --> 00:18:33.164 More trash is going into landfills. 00:18:33.450 --> 00:18:38.580 What are we gonna do with that gas that's, that's really bad for the atmosphere. 00:18:38.880 --> 00:18:50.009 The dairy farms, the swine farms, the wastewater treat, all of these very, very, you know, necessary pieces of society exist. 00:18:50.220 --> 00:19:00.840 And now we've found this great way of cleaning that up, getting, you know, doing something very positive and the best place to put it is into these combustion engines. 00:19:00.930 --> 00:19:05.400 So I, I think that's a much longer discussion, but it's, you know, it's an interesting one to have. 00:19:06.314 --> 00:19:14.894 The climate case still depends on the feedstock, methane leakage, what would otherwise happen to the waste gas and the accounting method. 00:19:15.703 --> 00:19:22.754 Those details determine the lifecycle benefit while,

combustion leaves local air pollution in play. 00:19:24.124 --> 00:19:27.754 Sure, and walk me through the landfill to fleet pathway in practical terms. 00:19:28.468 --> 00:19:32.758 Well, it's not as direct as I think people may want to think at first. 00:19:32.807 --> 00:19:34.398 That is something we run into. 00:19:34.748 --> 00:19:45.638 You go to any landfill, you do a lot of st you, you study what's in the landfill, how long has it been coming, how much is there, what's, what are the gases coming out of that landfill right now? 00:19:45.998 --> 00:19:47.768 How long are the gas is gonna last? 00:19:47.798 --> 00:19:55.129 You do the economic study, you design an engineer and construct a plant that is the right size for that landfill. 00:19:55.748 --> 00:19:59.567 You build the plant it's almost like, I mean, call it a refinery. 00:19:59.958 --> 00:20:06.587 You, you're taking a gas, sucking in the gases and they've got a lot of impurities in them. 00:20:06.738 --> 00:20:08.628 You pull out a lot of the bad stuff. 00:20:08.628 --> 00:20:20.688 You end up with very clean methane, natural gas, and in almost all cases, you directly inject that into the interstate or local pipeline systems. 00:20:21.048 --> 00:20:24.528 And there it's mixing with the fossil fuel gas. 00:20:24.901 --> 00:20:26.221 And what happens next? 00:20:26.480 --> 00:20:32.541 It's a little bit related to the renewable fuel standard and kind of, you know, it's a paper trail. 00:20:32.961 --> 00:20:45.291 So technically to, to create the incentives and keep the industry growing and incentivize these good people to build these production plants in the middle of nowhere, out where there's not a lot of development. 00:20:45.291 --> 00:20:55.010 Wherever there's a big landfill based on the regulations I get, I, you know, whoever has the plant to owns that molecule. 00:20:55.049 --> 00:21:01.071 You kind of own a molecule when it goes in and you, you get to control that renewable molecule until it goes out. 00:21:01.071 --> 00:21:06.770 So I can produce in Florida a molecule, put it into the pipeline system in Florida. 00:21:07.041 --> 00:21:13.520 And I can say that actually the molecule went out in my fuel station in Oregon. 00:21:13.611 --> 00:21:16.461 You don't have to put a fuel station next to the landfill. 00:21:16.760 --> 00:21:24.711 I know that can be a little bit hard to get through, but, but that's how it works in that it creates the right incentives to, to keep this going. 00:21:25.270 --> 00:21:28.391 So the physical gas mixes in the pipeline. 00:21:29.020 --> 00:21:40.061 What travels from a Florida producer to an Oregon fuel sale is the renewable attribute through a book and claim system rather than a particular molecule. 00:21:40.975 --> 00:21:48.295 Alright and what do you think heavy transportation fuel looks like in 10 years from now? 00:21:48.295 --> 00:21:50.275 What percentage do you think is electric? 00:21:50.275 --> 00:21:52.884 What percentage will remain combustion based? 00:21:52.884 --> 00:21:57.355 And does RNG meaningfully scale or would it stay niche in that kind of time period? 00:21:58.095 --> 00:21:59.795 You're gonna get my opinion again. 00:21:59.894 --> 00:22:01.765 I'm not gonna be correct. 00:22:02.015 --> 00:22:05.850 And I, and I'm a very positive about our sector. 00:22:05.950 --> 00:22:11.375 I, I, I believe in productivity and that everybody's creating new things that work very well. 00:22:11.375 --> 00:22:12.875 I believe in the electric. 00:22:13.295 --> 00:22:23.045 I, I think diesel, I think we can have diesel stay kind of flat, maybe even decrease, at least in this country. 00:22:23.045 --> 00:22:28.025 I think electric is gonna find a lot of great places where it works very well. 00:22:28.384 --> 00:22:41.015 But I also think that, I think that RNG is going to take, you know, in the next 10 years, somewhere at least 10 to 20% of annual truck purchases. 00:22:41.205 --> 00:22:43.450 And, and I think there's upside to that. 00:22:43.500 --> 00:23:01.670 So I think there's so many ways to make RNG and CNG very economical and very operationally efficient over the next 10 years that I think we can get to 10 to 20% on the CNG, RNG that I think it can work really long haul over the road and electric is going. 00:23:01.670 --> 00:23:05.690 I think they're gonna continue to go with more of the close end stuff. 00:23:05.690 --> 00:23:09.190 You need a high utilisation you know, the right weights. 00:23:09.190 --> 00:23:11.830 So I think it's gonna be really interesting to see where we go. 00:23:11.950 --> 00:23:14.769 But every, everybody's gonna gain some good market share. 00:23:15.578 --> 00:23:22.659 A practical question, if a fleet operator listening wants to seriously evaluate RNG where should they start? 00:23:23.710 --> 00:23:24.720 It is hard. 00:23:24.720 --> 00:23:26.100 You want to do it right. 00:23:26.400 --> 00:23:31.470 You want to make sure you do this very detailed analysis. 00:23:31.470 --> 00:23:39.210 You might want to be sure that you get to really try the truck, not just necessarily there are demo trucks out there that different companies have. 00:23:39.210 --> 00:23:40.710 We're gonna get one soon. 00:23:41.100 --> 00:23:46.200 Those programmes are usually a try the truck for a week, two weeks, maybe three weeks. 00:23:46.470 --> 00:23:59.799 We are actually at NoPetro working on a solution that we, we call it more of a pilot programme that is a little deeper, longer term trial, maybe 60, 90 days to really get a sense for it. 00:24:00.450 --> 00:24:11.035 Scott we're coming towards the end of the podcast now Is there any question I didn't ask that you wish I did or any aspect of this we haven't touched on that you think it's important for people to be aware of 00:24:12.145 --> 00:24:14.306 I think, I think this, I think you did a great job. 00:24:14.306 --> 00:24:20.395 I think, you know, we got through what it is, the differences, you know, it's, it, it, it's got a place, it'll fit. 00:24:20.395 --> 00:24:21.865 What are the challenges? 00:24:22.226 --> 00:24:28.346 And, you know, it's of us in the industry are working together. 00:24:28.405 --> 00:24:38.166 I, you know, the thing I tell people that are interested just be open, be open-minded and, and, and kind of curious. 00:24:38.556 --> 00:24:41.375 Okay and if people want to get in touch with you what's the best way to do so 00:24:41.480 --> 00:24:43.090 It's easy to find me through NoPetro.com. 00:24:44.650 --> 00:24:49.509 But sbrinner@nopetro.com is also pretty easy. 00:24:49.509 --> 00:24:50.950 That's my email address. 00:24:50.950 --> 00:24:52.330 Happy to get that out there. 00:24:52.920 --> 00:24:56.640 Perfect Great Scott that's been fascinating Thanks a million for coming on the podcast today 00:24:56.696 --> 00:24:57.446 Thank you, Tom. 00:24:57.446 --> 00:24:58.196 That was fun. 00:24:58.226 --> 00:24:58.556 Thank you.