May 24, 2013

Renewable Natural Gas in the United States: Potential and Ambition

This is the fourth in a series of blog posts that highlight the market and environmental potential of renewable natural gas (RNG). 

Image courtesy of the European Commission.
In this post we turn from how renewable natural gas (RNG) supports sustainable transport in Europe to its role in the United States. Policy support for renewable and low-carbon fuel for transportation in the U.S. has concentrated on liquid biofuels. In the absence of similar policies for RNG, several firms across the U.S. have taken the lead to capture RNG and use it in their fleets.

RNG has vast potential across the U.S. The American Gas Foundation estimates that anaerobic digestion together with thermal gasification has the potential to replace 45 percent of the 38 billion gallons of diesel fuel consumed annually across the country.  Blended with current conventional natural gas resources, this volume of RNG can contribute to greenhouse gas (GHG) emission reduction targets and fuel security objectives.

Federally, the Environmental Protection Agency’s (EPA) historical focus on air quality impacts from biogas sources provides a foundation of experience for the development of RNG infrastructure. Landfills, dairy operations and municipal solid waste streams are the most promising commercial sources of biogas – EPA has long regulated such sources and required recovery and combustion of landfill gas to improve local air quality.   Increasingly, these sources are considered prime targets for methane capture and energy for transportation.

Beyond EPA requirements, Renewable Portfolio Standards (RPS) in various states typically encourages waste methane capture for electricity generation. However, without similar   transportation policies, much of the RNG potential in the U.S. remains just that: according to Energy Vision, of 541 landfill methane capture systems in place across the U.S., only five use the resulting gas for vehicle fuel, and EPA counts another 501 sites as viable methane capture opportunities. 1,500 waste water facilities recover biogas and another 2,000 are considered ideal candidates, and 186 farms have anaerobic digestion facilities, while a further 6,900 could economically produce renewable gas.

RNG’s potential contribution to environmental and climate goals is shown by California’s Low Carbon Fuel Standard (LCFS) for vehicle fuels. It sets standards for the overall carbon intensity allowed for all fuels sold in the state (a declining share over time) and gives fuel providers flexibility to use a range of alternatives - including conventional natural gas and RNG. Under California’s LCFS, waste feedstocks made up less than 1 percent of biofuel volumes in 2012, yet generated 10 percent of all biofuel credits due to their exceptionally low carbon intensity.  In other words, RNG made from wastes – which is nearly all sources currently suitable for transportation – helps fleets and fuel providers achieve tremendous progress toward meeting the standard.

Early adopters of RNG for transportation are often companies who already handle feedstocks and see the benefits of converting waste (which carries a cost) into a fuel that powers their businesses. Examples are:

Fair Oaks Farms - a dairy producer in Indiana that generates 865 MMBtu or just under 5,900 Diesel Equivalent Gallons of RNG every day from their 11,000 cows, fueling 53 daily deliveries of milk, resulting in $2.5 million annual fuel savings, and GHG emissions reductions of more than 16,500 tonnes.

The Altamont Landfill in California says it’s the largest RNG for transportation operation in the world, powering nearly 400 garbage trucks with fuel produced from the waste it hauls.  Operated by Waste Management, the facility has been recognized by the EPA, the U.S. Department of Energy and the State of California, among others, for their sustainability leadership.

Similar projects include Rodefeld Landfill in Dane County, Wisconsin, which powers nearly 30 vehicles by waste-derived RNG, and the Janesville Wastewater Plant in   Wisconsin, which has produced biogas since 1970 and added a facility in 2011 to bring it to vehicle-quality standards. It plans to power over 40 vehicles by 2022.

These examples of “self-fuelling” systems show the many ways RNG can help firms reduce transport fuel costs, reduce their energy footprint, and make a substantial contribution to climate and environmental goals.

[1] American Gas Association, “The Potential of Renewable Natural Gas: Biogas Derived from Biomass Feedstocks and Upgraded to Pipeline Quality” (2011).
[1]Environmental Protection Agency, “Landfill Methane Outreach Program” accessible via: Directly venting methane has a more potent climate impact than carbon dioxide (converted through combustion and flaring).
[1] Energy Vision, “Renewable Natural Gas (RNG): The Solution to a Major Transportation Challenge” (2012).
[1] Sonia Yeh, “Status Review of California's Low Carbon Fuel Standard Spring 2013 (REVISED VERSION)”, UC Davis Institute of Transportation Studies Research Report (2013).
[1] 1 MMBTU of natural gas = 6.81 Diesel Equivalent Gallons
[1] Innovation Center for US Dairy, “Case Study: Dairy Power” available at
[1] Energy Vision (2012).
[1] Waste Management, “Altamont Landfill”:
[1] Energy Vision (2012).

May 15, 2013

NGVs: What IS the payback time?

Natural gas is making headlines as the newest transportation fuel of choice. The New York Times and Bloomberg both recently reported on large companies, such as FedEx and AT&T Inc., switching to natural gas vehicles (NGVs) for their fleets.

Amidst this activity, there have also been varying estimates about the amount of time it takes to recoup the extra initial cost of purchasing an NGV from the savings gained from filling up with either compressed natural gas (CNG) or liquefied natural gas (LNG) as compared to diesel or gasoline.
Media outlets quote sources as saying it takes anywhere from six months to eight years. It’s worthwhile to consider payback times carefully, given it’s a key factor in the decision-making process to transition a fleet to natural gas.

Brad Edgelow, Westport’s Senior Director of North American Sales, outlines some of the key factors in determining how long and how much the payback will be for a company’s specific requirements:

What is the differential in cost between the original fuel (gasoline or diesel) to the new fuel (CNG or LNG) in energy equivalent units?
What is the incremental cost of buying a natural gas truck? This calculation can vary since some states or provinces offer tax incentives. The U.S. Department of Energy’s Alternative Fuels Data Centre is a great resource for determining tax incentives in the U.S.
What is the total fuel consumed in one year? This calculation is based on miles driven and fuel economy. Note idle hours, if they exist in large amounts, should be converted to miles driven at the rate of 32 per hour for gasoline engines and 20 for diesel engines.

Edgelow says every customer has to assess what he/she currently pays for a diesel gallon and what they would pay for an LNG/CNG gallon based on their location since prices vary between stations, states and provinces. For instance, according to this Wisconsin State Journal article, average prices by state for CNG range from a low of $1.20 in Oklahoma to $3.34 in Connecticut.

Payback Calculation: Pickup Trucks

Let’s break it down:

  • The upfront, additional cost of a CNG-powered pickup is $9,500.
  • A truck driving 30,000 miles (48,000 kilometres) per year getting 15 miles (24 kms) per gallon (3.7 litres) on gasoline uses 2,000 gallons of fuel per year.
  • Assumption: Gasoline price is $3.50 and CNG price is $1.50 
  • $2 per gallon difference x 2000 gallons used = $4000 estimated per year in savings.  
  • Estimated payback time = 28 months.

Here’s our payback calculator for the Westport WiNG™ Ford pick-up series of trucks where you can make your own calculations.

A Real Life Example: REV LNG

REV LNG is a Pennsylvania-based LNG distribution company that supplies on and off road customers with LNG. The company designs and implements LNG fueling systems for companies and hauls materials for the oil and gas sector. They own 17 Peterbilt 18-wheeler trucks that are fueled with LNG, purchased since 2011.

President and COO, Preston Hoopes says since they operate their trucks 24 hours a day, they are experiencing an 18 month payback time period. In his experience, the payback time has ranged from 18 months to three years, depending on how many hours a company runs its trucks.

“We thought we’d get ahead if we ordered natural gas trucks,” Hoopes says. “A lot of our clients have been calling and asking about how they can go green. Since we run our own fleet of LNG trucks, we can tell them exactly what it’s like.”

The company has over one million documented miles on natural gas tractors and was one of the first trucking operators to convert their traditional diesel fueled trucks to natural gas in Pennsylvania. They were operating a natural gas fleet before an LNG fuel station was commissioned in the state.

“We’re using the trucks ourselves, so when our clients ask us what it’s like to actually drive them, we can speak from experience,” Hoopes says.

Additional Resources:

Information about tax incentives for NGVs in North America

Fuel Cost Calculator from Cummins Westport:
A Map of North American On-Road Incentives:
Clean Energy CNG/LNG Station Locator:
CNG Now Station Locator: