Natural Gas is Affordable, Abundant and American
Natural gas is proving to be the most exciting transportation fuel in recent years. Natural gas offers fleets an average 30-50% price reduction at the pump.
Natural Gas vs. Diesel
The retail spread of diesel versus compressed natural gas (CNG) during 2013 was $1.53 per diesel gallon equivalent (DGE), with the 2013 national retail diesel average of $3.92/gallon compared with $2.39/DGE (diesel gallon equivalent) for compressed natural gas.
For example, an annual fuel burn of 15,000 gallons would result in a nominal annual fuel cost savings of around $23,000 per year per tractor. This savings is generally sufficient to provide a simple payback of the higher cost natural gas tractor in the 1 – 2 year range.
This diesel-to-Natural Gas price spread may fluctuate over time as commodity markets commonly do; however, the plentiful supply of domestic natural gas has effectively decoupled the U.S. from global pricing for natural gas, thus assuring a higher degree of price stability.
The natural gas commodity component of the Natural Gas pricing can also be effectively hedged for a much longer time than diesel to provide a higher degree of price assurance over the life of the vehicle.
Utilizing compressed natural gas also helps organizations reduce their environmental footprints as natural gas produces significantly lower emissions than most traditional fuels.