Background

Since 1988, federal and state 

legislation has mandated the adoption

of alternative transportation fuels,

primarily because of environmental

and energy security concerns.

Recently, however, much of the 

alternative fuels activity has shifted.

With the electoral revolution of 1992,

Congress is rethinking environmental

regulation and cutting federal appropriations for alternative fueled vehicles (AFVs). The U.S. Enviromental

Protection Agency (EPA) may delay

implementation of stringent emission

standards, and the U.S. Department

of Energy (DOE) has delayed

requirements for alternative fuel

adoption that were set to go into

effect on September 1, 1995.

In the late 1980s and early 1990s,

as federal and state legislation was

being crafted across the country,

developments were made that would

shake the foundation of the AFV

market in the mid-1990s. The dominant share of AFV, particularly 

natural gas vehicle (NGV) activity,

focused on light-duty vehicles that

belonged to the natural gas utilities, 

state governments, the federal 

government, services, and selected

small private fleets. Fueling infrastructure evolved from utility service

yards to the property of major and

independent fuel marketers. In 

the wake of the Clean Air Act

Amendments of 1990 (CAAA-90)

and the 1991 Intermodal Surface

Transportation Efficiency Act, transit

authorities became the first to adopt

alternative fuels, primarily compressed natural gas (CNG), for their

heavy-duty fleets.

In this atmosphere of legislative

retreat and market evolution, heavyduty trucks are poised to accelerate

the growth of the alternative transportation fuels market.

Liquefied Natural Gas (LNG)

Since 1990, LNG has taken enormous steps toward becoming a recognized alternative transportation fuel.

Although LNG applications were 

initially considered for transit buses,

new engine and storage technologies

have led to LNG applications in a

growing number of medium- and

heavy-duty trucks.

Volume 4, Number 2

Heavy-Duty Trucks Poised to Accelerate 

Growth of American Alternative Transportation

Fuels Market by Christopher P. Pedersen, President, Pedersen Consulting Group

INSIDE THIS ISSUE

Heavy-Duty Vehicle 

Program Update..................3

Natural-Gas-Powered

Hybrid-Electric Bus ............5

Ethanol Mandate Denied ....5

AFV Purchase Rule to 

be Delayed...........................6

Labeling Rule 

for Alternative Fuels 

and AFVs.............................6

Alternative Fuels Alive 

and Well in Texas ................6

New CNG 

Refueling Stations................6

“Self-Serve” LNG 

Dispenser in New Mexico ...7

Propane Injection 

System in Vancouver............7

ADEPT Group Heads

Propane Engine Project ......7
The driving force behind adopting

LNG as a viable alternative transportation fuel has not been the 

environment or energy security, 

but economics!

Six factors have been working to

improve heavy-duty truck LNG 

economics:

1. Fuel price differential. This 

allows operators of heavy-duty 

trucks to consider a move from 

diesel to LNG.

2. High fuel consumption. This 

allows even a small fuel price 

differential to provide a reasonable payback on investment in 

LNG conversion and fueling 

infrastructure.

3. Reasonable incremental cost. 

The premium charged for 

LNG-fueled vehicles has 

dropped significantly during the 

past few years, reducing the 

absolute levels of the fuel price 

differential and fuel consumption needed for acceptable 

economics.

4. Reduced excise taxes. In addition to lower commodity cost, 

excise taxes for LNG are lower 

than for diesel, and provide for 

a substantial per gallon savings 

compared with diesel.

5. High-duty cycle. Heavy-duty 

trucks operate at high average 

speeds, reducing throttling 

losses and bringing natural 

gas engines close to diesel 

efficiency.

6. Lower station costs. LNG fuel 

station costs have been coming 

down during the past 3 years, 

reaching a level below that of 

CNG in many cases. In addition, a number of private LNG

fuel station owner-operators 

have moved to eliminate fuel 

station costs from the heavyduty truck fleet altogether.

The NGV Industry Strategy

In late 1993, the natural gas

industry decided it was time to articulate a comprehensive strategy for

developing natural gas as a transportation fuel. After many delays, the

strategy was released this past May at

the annual Alternative Fuels Market

Fair and Symposium in Austin,

Texas. In what some consider a 

surprising move, the strategy emphasized LNG use in heavy-duty fleets

from 1995 to 2010.

Clean Corridors and Private

LNG Marketers

One constraint to the expanded

use of LNG by heavy-duty fleets has

been the lack of a sufficient fueling

infrastructure. Two developments

have begun to address this concern,

and will have profound implications

on the trucking industry for the next

15 years:

1. Expansion of the Clean Cities 

Program into Clean Corridors, 

connecting cities with convenient and accessible fueling.

2. Formation of a number 

of private LNG marketers, 

which focused on the fueling 

infrastructure.

Forces have begun moving to

make the Southwestern NGV Zone, a

concept developed several years ago

for CNG, an LNG reality. Beginning

in California, an LNG fueling infrastructure is being planned from Los

Angeles east to Phoenix and on into

Texas, northeast to Salt Lake City

(the western-most point where 

trucking can move on to both 

San Francisco and Los Angeles), 

and north to San Francisco and

Sacramento. Ultimately, the eastern 

route will continue to Florida, and

the northern route will continue to

Vancouver. Similar corridors are

expected to be built in the Southeast,

the Northeast, and the Midwest 

during the next several years.

The formation of private LNG

marketers is the force behind the

Clean Corridors, and should remove

any remaining substantive barrier 

to the adoption of LNG. Pacific

Enterprises, the parent of Southern

California Gas Company, has formed

an LNG marketing company with

MESA, Inc. Marcum Fuel Systems

has entered into an agreement with

Minnesota Valley Engineering.

EcoGas has moved into the United

States after initiating operations in

southeast Asia.

Applied LNG Technologies 

Finally, one of the most aggressive companies in the growing LNG

marketing arena is Applied LNG

Technologies, or ALT. Formed by

Jack B. Kelley, Inc. (a trucking company based in Amarillo, Texas), and

Cryenco Sciences, Inc. (a cryogenic

equipment company based in Denver,

Colorado), ALT has moved quickly

to a perceived position of leadership.

ALT has staked its growth on 

the I-10, I-5, I-15 triangle that

encompasses Salt Lake City,

Sacramento, and Los Angeles. 

ALT recently signed a letter of 

intent to build an LNG station at the

Ramos Oil Company station in West

Sacramento, in addition to existing

LNG facilities in Salt Lake City 

and Los Angeles. At the same 

time, Golden Spread Energy, a 

2 Alternative Fuels In Trucking — Volume 4, Number 2
Jack B. Kelley company, signed a letter of intent to acquire Tren • Fuels,

Inc., and its 11 FleetStar branded natural gas fueling sites in Phoenix, Las

Vegas, and northern California 

from Transco Energy Company.

ALT has a clear vision for implementing its aggressive business plan.

Ken Kelley, Chief Executive Officer

(CEO) of ALT, and Dale Brubaker,

President of ALT, are committed to

developing a $1 billion LNG fueling

industry during the next 5 years.

Realization of this plan should give

heavy-duty trucking fleets confidence

that their move to LNG will be part

of a historic evolution of the

American transportation sector.

Christopher P. Pedersen is

President of Pedersen Consulting

Group, based in Austin, Texas. The

firm provides professional services in

alternative transportation fuels—

including strategic and business

planning, marketing, funding, and

feasibility studies—in the United

States. He is also Chairman and

CEO of Enveco, Inc., based in

Houston, Texas. Enveco provides 

professional services, primarily in

alternative transportation fuels, in

selected international markets.

Clients include municipalities, gas

industry companies, and foreign 

governments. Mr. Pedersen was formerly Vice President of Marketing

and Business Development for 

Tren • Fuels, Inc., and Fleet Star,

Inc. He is an active member of the

NGV Coalition and the European

NGV Association.

Each year, DOE’s Office of

Alternative Fuels reviews heavy-duty

engine research and development,

alternative fuel truck demonstrations,

heavy-duty emissions regulations,

and the availability of information

from ongoing and completed tests.

The results of this survey are summarized in a report made available to

the trucking industry and other interested parties. This year, the first 

third of this report was prepared. 

Steve Goguen, who heads DOE’s

Alternative Fuel Truck Application

Program, presented it at DOE’s

Diesel Engine Emission Reduction

Workshop in La Jolla, California, 

on July 24, 1995. The updated 

report will be presented in Dearborn,

Michigan, at DOE’s Contractors’

Coordination Meeting October

23–27, 1995. Federal alternative fuel

heavy-duty truck efforts grew out of

Section 400 BB of the Alternative

Alternative Fuels In Trucking — Volume 4, Number 2 3

The U.S. Department of Energy Alternative Fuel

Heavy-Duty Vehicle Program Update

by Peter W. McCallum, Systems Engineer, Antares Group, Inc.

Cummins Engine Company natural-gas-powered L10-300G

Photo courtesy of Cummins Engine Company
4 Alternative Fuels In Trucking — Volume 4, Number 2

Motor Fuels Act of 1988 (AMFA).

AMFA was intended to encourage the

development and use of alternative

fuels and to stimulate the production

of alternative fuel engines. The 

Clean Air Act Amendments of 1990

(CAAA-90) reinforced AMFA’s goals

by requiring “clean fuel” fleets in the

country’s poorest air quality regions.

The CAAA-90 also imposed stringent new emissions requirements 

on heavy-duty engines, making the

adoption of alternative fuels an 

effective near-term compliance measure. Finally, the Energy Policy Act

of 1992 (EPACT) provided incentives to fleet operators to purchase

AFVs and refueling facilities.

This year’s survey makes clear

that engine manufacturers and fleet

operators have made natural gas, of

all the available alternative fuels, the

focus of their efforts and interests.

Detroit Diesel Corporation (DDC),

which has had considerable success

with its methanol- and ethanol-fueled

6V-92TA engines (there are 550 in

service), reports it has no current

orders for the 6V-92TA engine plant.

DDC is marketing its Series 30G gas

engine and its Series 50G bus engine,

and developing the Series 50G and

Series 60G natural gas engines for

the truck market. Caterpillar has

developed the G3306 and G3406 

natural gas engine, derived from its

diesels. Cummins is producing or

developing four medium- and heavyduty natural gas engines—the B5.9G

and L10G are in production, the

C8.3G is undergoing testing, and the

M11G is slated for a 1998 introduction. Navistar International developed

its 7.3-liter natural gas engine jointly

with DDC and will also market it.

Navistar may enter into a second

joint venture with DDC to develop a

natural gas engine based on Navistar’s

8.7-liter diesel engine. Mack Trucks

is field testing a natural gas derivative

of its E7 engine and expects to offer

it in two ratings. Hercules Engines’

5.6- and 3.7-liter natural gas engines

have achieved wide acceptance in

medium-duty applications, and

Hercules is pursuing electronic feedback fuel metering. Tecogen (a division of Thermo Power Corporation)

will provide 276 additional 4.3-liter

V-6 natural gas engines to United

Parcel Service and is developing 

a diesel-to-natural-gas conversion

package for the Navistar DT466.

Most of these companies’ engines 

are represented in DOE or Trucking

Research Institute demonstration fleets.

The availability and favorable

pricing of natural gas are expected to

make it the alternative fuel of choice

for the immediate future. LNG’s 

energy storage density will suit it

best for line-haul trucks, and CNG

will make inroads in the vocational

markets and city fleets with central

refueling facilities. In the future, 

an increasing degree of electronic

engine control will be employed to

protect medium- and heavy-duty 

natural gas engines from thermal

stresses and from the effects of 

variable fuel composition. 

Peter W. McCallum is a Systems

Engineer with ANTARES Group, Inc.,

in Landover, Maryland. ANTARES

provides consulting services on the

technical, economic, regulatory, and

policy issues affecting transportation

and alternative fuels. For the past 2

years, ANTARES has been working

with the National Renewable Energy

Laboratory to support DOE’s

Alternative Fuels Program.

Detroit Diesel Series 50 natural-gas-powered engine

Photo Courtesy of Detroit Diesel Corporation
Alternative Fuels In Trucking — Volume 4, Number 2 5

New York State Transit

Operators to Demonstrate

a Natural-Gas-Powered

Hybrid-Electric Bus

Seven New York state transit

operators (from Albany, New York

City, Ithaca, Long Island, Westchester

County, Buffalo, and Niagara Falls)

will demonstrate a natural-gas-powered

hybrid-electric bus as part of an

ongoing research project sponsored

by the New York State Energy

Research and Development

Authority, Albany, New York; and

Unique Mobility, Inc., Golden,

Colorado. Unique Mobility converted the 25-foot Orion II bus to use

a natural-gas-fueled engine to power

a generator that continuously charges

thirty 12-volt batteries while the bus

is operating. Ultra-low tailpipe emissions are achieved in a way reported

practical and cost-effective. If the

demonstrations prove successful, transit operators are expected to add similar vehicles to their fleets to comply

with clean air mandates.

Federal Court Denies EPA’s

Mandate to Require Use of

Ethanol in Reformulated

Gasoline (RFG)

A federal appeals court in

Washington, D.C., has ruled that 

EPA may not mandate the use of

ethanol in RFG. The decision is a

major setback to the ethanol industry.

Had the directive been upheld, 15%

of oxygenates in RFG would have

come from ethanol beginning this

year, increasing to 30% in 1996. 

Natural-gas-powered hybrid-electric bus being demonstrated in New York

Photo courtesy of Unique Mobility, Inc.
The court proclaimed that EPA

lacked the authority to order the 

use of renewable oxygenates. The

American Methanol Institute, the

American Petroleum Institute, and

the National Petroleum Refiners

Association challenged the decision

in court.

DOE Set to Delay AFV

Purchase Rule

DOE has announced that it will

publish a notice of limited reopening

of the comment period, which would

delay the proposed rule under EPACT

that requires state and fuel-provider

fleets to begin adding AFVs on

September 1, 1995. A letter signed 

by 29 members of the House of

Representatives called the DOE fleet

rule “excessive and unreasonable,”

and requested that the rule be withdrawn and “re-proposed in a form

consistent with the intent of the law.”

Citing the need for sufficient lead

time to evaluate and order AFVs for

fleet use, most affected parties have

requested delays in the rule.

Federal Trade Commission

(FTC) Issues Final Labeling

Rule for Alternative Fuels

and AFVs

The FTC has issued final labeling

rules for nonliquid alternative fuels,

such as CNG, electricity, and hydrogen; and for AFVs. Under the rule,

cost and benefit information must 

be made available for each fuel, and

dispensers of the gaseous fuels must 

display a label that identifies each

fuel and its principal component. 

The label must be displayed conspicuously and will have three sections:

• Information on cruising range 

and EPA emission standards

• A list and explanation of factors 

consumers should consider 

when purchasing an AFV

• Directions for consumers 

to obtain additional information from DOE and the 

Department of Transportation 

(DOT).

Alternative Fuels Move

Ahead in Texas Despite

Recent Legislation

The alternative fuels industry is

alive and well in Texas despite recent

legislation that allows RFG and 

low-sulfur diesel to be classified as

alternative fuels, said Garry Mauro,

Texas General Land Commissioner,

at the recent Alternative Fuels Market

Fair and Symposium in Austin, Texas.

More than 2900 Texas DOT vehicles

have been converted to operate on

propane or natural gas since 1991,

and at least 50% of the entire 10,000-

vehicle fleet will be running on 

one of the gaseous fuels by 1996.

Traditional alternative fuels will

probably be needed to achieve the

lower emission levels required in 

the late 1990s under CAAA-90 and

EPACT.

New CNG Fueling Stations

Expand NGV Refueling

Infrastructure

The CNG infrastructure continues

to expand as more refueling facilities

come on stream. Columbia Gas of

Ohio and Emro Marketing have

opened Ohio’s first public natural 

gas refueling facility in a commercial service station in Middleburg

Heights. Two new stations have

opened in Baltimore, Maryland, 

the result of a joint effort between

Amoco and Baltimore Gas and

Electric. Park City, Utah, and

Petersburg, Virginia, also have 

newly opened public facilities.

New Jersey’s First Public

CNG Refueling Station

Opens

Public Service Electric and Gas

Company and Shell Oil opened New

Jersey’s first public CNG refueling

facility in a service station near the

Holland Tunnel in Jersey City. 

The utility company converted 108

vehicles to CNG in 1993 and added

130 new NGVs in 1994. Shell and

the New Jersey utility shared the

$250,000 cost of the natural gas compressor. The utility has a $3 million

rebate program in effect that gives

individuals $1,000 and fleet customers as much as $50,000 toward

conversion costs. Bell Atlantic, N.J.

Transit, and the State of New Jersey

are cooperating, as they already have

natural-gas-powered vans, cars, and

buses in service and will be able to

take advantage of the new fueling

location.

6 Alternative Fuels In Trucking — Volume 4, Number 2
South Florida to Have 10

New Public Refueling

Stations

Florida Natural Fuels and Amoco

have announced that 10 public-access

natural gas refueling stations will be

built and opened in southern Florida

within the next 2 years. The strategy

is to locate a CNG facility about

every 10 miles for vehicles traveling

along Interstate 95 between Miami

and Palm Beach Gardens. Current

estimates put the number of NGVs

in the area at about 500, although 

the count should increase rapidly in

an area with 92 municipalities and

about 3 million vehicles.

First “Self-Serve” LNG

Vehicle Fueling System

Installed

CH-IV Cryogenics, Lawrence,

Massachusetts, has installed the first

“self-serve” LNG fueling dispenser

for vehicles in Bloomfield, New

Mexico. Four years of effort went

into developing the system that

allows LNG vehicles to be fueled

similarly to gasoline vehicles. This 

is in sharp contrast to normal LNG

vehicle fueling, which requires

trained operators to wear protective

clothing and follow strict procedures.

The patent-pending design allows the

driver to remove the fueling nozzle

from the dispenser, insert the nozzle

in the vehicle, wait for the fueling to

be completed, and return the nozzle

to the dispenser.

Project Under Way to

Develop Clean-Burning

Heavy-Duty Propane

Engine

Mogas Sales, Inc., and B.C.

Research Inc., both of Vancouver,

British Columbia, are working on 

a joint project to develop a cleanburning propane injection system 

for a 250-hp engine. The project is

important, in that heavy-duty vehicles

must meet 1998 emissions standards

in Canada and several U.S. states. 

A heavy-duty truck with a Cummins

C 8.3 engine will be modified and

operational in 1996 for use in ICG

Propane’s fleet. Detroit’s automakers

are introducing propane injection 

systems for small vehicles, but the

Canadian project is focusing on

medium- and heavy-duty engines.

Project Under Way to

Develop Heavy-Duty

Engine for Mobile and

Stationary Applications

The ADEPT Group, Inc., is managing a Series 50 Propane Engine

Project that will develop, certify, 

and demonstrate the first dedicated

heavy-duty propane engine for

mobile and stationary applications.

The project is being conducted in

conjunction with the Alternative

Fuels Research and Education

Division, Railroad Commision of

Texas; Natural Resources Canada;

South Coast Air Quality Management

District; and DOE through NREL.

DDC manufactures the 8.5-liter

engine, which will be targeted for

mass transit buses, Class 7 trucks,

generator sets, and agricultural pump

engines. The $4 million project began

in August 1994 and is expected to be

completed in December 1996.

Alternative Fuels In Trucking — Volume 4, Number 2 7
Volume 4, Number 2

René Texeira, Editor

Dean Armstrong and 

John Leedholm, Graphic Designers

Alternative Fuels in Trucking is published quarterly

by the National Renewable Energy Laboratory

(NREL), a U.S. Department of Energy (DOE) national laboratory. The newsletter is written by the

American Trucking Association Foundation’s

(ATAF’s) Trucking Research Institute.

The aim of Alternative Fuels in Trucking is to

inform fleet owners and operators, equipment suppliers, government officials, and other interested parties

about important developments in the use of alternative

fuels in heavy-duty trucks. Suggestions and comments

are welcome and may be directed to the National

Alternative Fuels Hotline at 1-800-423-1DOE. Views

expressed by guest authors are their own, and not

those of ATAF, DOE, or NREL.

NREL/TP-425-7522

Fall 1995

Printed with a renewable-source ink on paper

containing at least 50% wastepaper, including

20% postconsumer waste

UNITED STATES OF AMERICA

• DEPARTMENT OF ENERGY •

U.S. Department of Energy

Office of Energy Efficiency and Renewable Energy

Office of Transportation Technologies