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Jon LeSage

Jon LeSage

Jon LeSage is a California-based journalist covering clean vehicles, alternative energy, and economic and regulatory trends shaping the automotive, transportation, and mobility sectors.

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Can Renewable Natural Gas Actually Compete With Diesel?

For truck fleets looking to cut fuel expenses and reliance on diesel — and to meet increasingly stringent emissions standards — renewable natural gas is becoming a hot commodity. There’s also the perk that comes from California’s low carbon fuel standard and the federal Renewable Fuel Standard incentivizing the alternative fuel.

Clean Energy Fuels, a company started years ago by oil tycoon T. Boone Pickens, is growing its presence in the space through its Redeem brand RNG and nationwide natural gas fueling station network — with New York City becoming the latest market to join up. The company is tapping into its existing network on compressed natural gas and liquefied natural gas fueling stations to deliver Redeem.

The company now has 530 fueling stations that are able to distribute RNG, where it delivered 110 million gallons of the fuel in 2018 and claims to have 53 percent of the RNG market in the U.S. This month, the company hosted the opening of its newest natural gas fueling station in Hunts Point, which is the first station in New York City to exclusively offer renewable natural gas (RNG) for medium- and heavy-duty vehicle fleets.

Other companies such as refuse giant Waste Management are running their own RNG production plants to get in on an economically viable tactic for converting landfill waste to clean fuel. As of last year, Waste Management had 110 CNG stations that can deliver 60 million diesel equivalent gallons of natural gas each year. The company has set targets to bring rising volumes of RNG to its fueling network. Its key strategy is turning refuse waste from its vast landfills into RNG. Related: Is This The Next Big Oil Disruption In The Middle East?

At Waste Management’s Outer Loop Recycling and Disposal Facility in Lexington, Ky, waste can be converted to RNG up to 5,000 standard cubic feet per minute (SCFM) of incoming landfill gas. This equates to about 2,500 mmbtu (one million British Thermal Units) per day of RNG, or 18,000 diesel gallon equivalents (DGE) per day. That makes for enough fuel to power about 800 of the company’s compressed natural gas (CNG) refuse collection trucks.

The company’s fleet of 6,700 natural gas trucks makes for 30 percent of Waste Management’s overall refuse collection fleet. The company has committed to converting its fleet from diesel to natural gas with 80 percent of new truck purchases powered by natural gas.

RNG, also known as biomethane, is produced from organic materials — such as waste from landfills and livestock — through anaerobic digestion. The fuel qualifies as an advanced biofuel under the federal government’s Renewable Fuel Standard. California’s low carbon fuel standard, which has been adopted by a few other states and Canada, has been a key driver for Clean Energy Fuels and other suppliers to tap into the burgeoning RNG market.

These incentives have offset some of the steep costs of producing RNG and delivering it to fueling stations.

“In the beginning [2008], we were delivering into a long-term fixed price market under the California Renewable Portfolio Standard to utilities. From there, we saw opportunity to deliver gas to the vehicle fuel market,” said Sahar Kamali, director of business development for Clean Energy Renewables, the company’s RNG subsidiary. Related: Heavy Oil Supply Crunch Cushions Canada From IMO 2020

“Now, we have 50 customers around the country contracted to receive our Redeem brand of renewable RNG, with waste companies being one of our largest markets. But we sell to transit agencies, municipalities and national trucking companies,” Kamali said.

Last year, the company saw its Redeem gas volume grow by 40 percent at its fueling stations. Other companies are starting to tap into the benefits provided by California’s LCFS. L’Oreal, the world’s largest cosmetic company, plans to achieve carbon neutrality this year for its 21 U.S. manufacturing facilities through RNG. Swiss conglomerate Cargill is investing in RNG to hit company targets.

Other countries are taking the fuel seriously with CNG and LNG stations and fueling infrastructures growing — and where RNG can be offered to fleet trucks through these existing stations. One of these markets, India, is seeing 50 percent growth in CNG demand.

India’s government is driving demand through policies and incentives emphasizing cleaner air, expansion of fueling stations, lower gas prices, and multiple natural gas vehicle vehicle launches by automakers. On the fueling side, India oil minister Dharmendra Pradhan prompted state-run oil companies to provide space for CNG dispensers at their gasoline pumps. That boosted the number of CNG stations by 71% in 4 years to 1,730. 

By Jon LeSage for Oilprice.com

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  • Ronald Wagner on July 25 2019 said:
    Great article! I hope to see more articles on natural gas fuel. It is the future.

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