April 21, 2010

Driving the Clean Transportation Economy: Dispatches from GLOBE 2010

GLOBE 2010 featured a Westport-sponsored panel "Driving the Clean Transportation Economy: Natural Gas at the Intersection of Emissions, Economics and Energy" with executive representatives from EnCana, Terasen and Groupe Robert. Panel chairman, Westport CEO David Demers, highlighted the economic, environmental and political forces impacting the global shift to natural gas as a vehicle fuel before turning the discussion over to the industry experts.

Westport LNG Engineering Truck at Globe 2010
Eric Marsh, Executive Vice President Natural Gas Economy at EnCana described the importance of natural gas to the Canadian and US economies. North American consumption amounts to 25 trillion cubic feet (TCF) or 7% of Canadian GDP and 3% of US GDP. Recently, the prices of natural gas and oil have been decoupled and while the prices are still determined by relative supply, it is expected that future natural gas costs will not increase as rapidly as oil. We are also seeing a technological renaissance due to horizontal drilling and hydraulic fracturing techniques that have unlocked vast quantities of low-cost shale gas. EnCana sees a bright future for natural gas as a transport fuel and is switching its own fleet vehicles to natural gas.

Randy Jespersen, CEO of Terasen, spoke from the perspective of the natural gas distributor and drew on his 30 years of industry experience. Jespersen believes that we need to think of natural gas as a foundation fuel, not a bridge fuel, as we have greater than a one hundred year supply in North America. The Honda Civic GX running on natural gas is the cleanest vehicle in the world, cleaner than hybrids and providing 30-50% fuel cost savings relative to conventional vehicles.

According to Jespersen, the real opportunity lies in switching heavy-duty trucks to natural gas. The incremental cost of switching from diesel to natural gas can be paid back in as little as two years pending the price of natural gas and less in US if favourable legislation, such as the Nat Gas Act, is passed. Alliances such as the Terasen-Westport-IMW Compressor consortium have been advocating the economic, environmental and operational benefits of natural gas vehicles and fuelling infrastructure in British Columbia.

But what about a fleet operator? Claude Robert, President and CEO of Groupe Robert Inc., operates one of the largest fleets in Canada with more than 2,700 employees and 4,000 pieces of equipment. Robert says that over the last 60 years, the efficiency of trucking has increased dramatically going from 1.5 miles per gallon to 7 or 8 miles per gallon. Improved aerodynamics, advanced engine technologies, special tires and driver training initiatives have combined to improve fuel consumption. What we need now however is a new fuel that can deliver even greater emission reductions and environmental benefits. Government leadership is needed to support the construction of fuelling infrastructure and to develop measures that incentivize the adoption and deployment of natural gas vehicles.

Robert noted that Westport’s technology is unique in that it offers leading vehicle performance and emissions reductions. Because of the lead time associated with converting an entire fleet to natural gas and building the required fuelling infrastructure, the time to act is now.