LNG replacing diesel? Not for a long, long while

All the elements seemed right for the experiment to work.

Bison Transport purchased 15 liquefied natural gas (LNG)trucks and ran them back and forth from Calgary to Edmonton. The trucking company partnered with Shell to providefuel stations to fill up.

The motivation was obvious as the companyexpected to save 30 per cent on fuel costs with LNG trucks compared to diesel, and produce 30 per cent feweremissions.

The industry is still chicken and egg for sure- TravisBalaski, Ferus

But after two years, and more than 1.5 million kilometres travelled,Bison Transport hit the brakes.

The trucks were sold and the pilot project was shelved.

LNG has long been hailed as a potential game changer for the transportation industry, but thetechnology is still fledging.

Challenges

The main problems for Bison Transport were the cost to convert its trucks,higher than expectedoperating expenses and the fuel economy.The return on investment was takinglonger than forecast because of low fuel economy and maintenance costs twice as high as diesel trucks.

CN tried a similar experiment running two LNG locomotives between Edmonton and Fort McMurray for 12 months in 2012-2013, and again in August 2015 that project was also not sustainable.

"CN will need more long-term LNG tests and to see more industry research and development work proving the rail technology employing natural gas is effective and economic," said spokesmanMark Hallman in an email.

• Shell backs out of Alberta gas liquefaction project

LNG on the road

Not all experiments with LNG have failed.Currently, atleast eight different companies across the country use natural gas powered trucks and buses, according to the Canadian Natural Gas Vehicle Alliance. Groupe Robert trucking in Quebec runs 125 trucks on LNG.

When Bison Transport put up its LNG trucks for sale, they were bought byVedder Transport in B.C., which was already running 50 of its trucks on natural gas.

VedderTransport's experience with LNG seems remarkablydifferent, as it says maintenance costs and performance have not been an issue.

The LNG industry is much larger south of the border, where more than 150,000 vehicles use the fuel, according the U.S. government's department of energy.

"In Western Canada right now, the over the road transportation business is challenged because we don't have a lot of infrastructure built and there isn't a lot of viable engine technologies for the Western Canadian market," saidTravisBalaski, an executivewith Calgary-based natural gas company Ferus.

Technology

Ferusoperates its own LNG plant near Grande Prairie, Alta., which produces about 190,000 litres of the fuel. That's the equivalent of about 110,00 litres of diesel, according to Ferus. The company ships most of the LNG for use in the oil and gas industry to fueldrilling rigs, pressure pumping services,heavy-dutytrucks and remote power generation. Ferusalso has some of its own pickup trucks and semi trucks that run on natural gas.

"The industry is still chicken and egg for sure," said Balaski."I don't think we're at the best technology yet."

Balaskisuggests it's a challenge right now for transport companies to switch to LNG, but they stand a better chance if they operate inin B.C. compared to Alberta. That's because B.C.'s tax structure favoursLNG compared to diesel. In addition, it also offersincentives to cover the cost of converting vehicles to natural gas.

"The technology in the vehicle needs to continue to develop to make sure this is a sustainable industry long term," said Balaski.