The "Blueprint for a Clean and Secure Energy Future" unveiled by U.S. President Barack Obama last week calls for "putting in place new incentives" for medium- and heavy-duty trucks that run on natural gas or other alternative fuels and providing a credit for 50 percent of the incremental cost of a dedicated alternative-fuel truck for a 5-year period.
"The natural gas vehicle market is already growing but the vehicle incentives the president calls for would help accelerate that growth and help displace foreign oil use even faster," Richard Kolodziej, president of Natural Gas Vehicles for America, an organization that promotes natural gas and biomethane as transportation fuels, said in a statement.
Frederick W. Smith, chairman and chief executive of FedEx Corp., told The Wall Street Journal he expects 5-30 percent of the nation's long-distance trucking to be fueled by compressed or liquefied natural gas over 10 years.
FedEx is testing four trucks, two each for liquefied and compressed gas. If the trial works well, the company will consider switching more of its 90,000 vehicles to the fuel, Smith said, adding, "We'd be remiss if we didn't."
Meanwhile, hundreds of FedEx's lighter vehicles are electric or hybrids.
However, challenges remain, including the cost of building infrastructure to supply and store the gas.
"The key driver of economic success is how quickly you can build up demand around any infrastructure," Colin Abraham, Shell's vice president for downstream LNG business development told the Financial Times. "You need to create the demand, given that the barrier to change is there and the infrastructure needs to be built," he added.
Yet LNG as a transport fuel has the potential "to make up a decent share of total road transport diesel demand," over the next decade, Abraham said.
Shell announced earlier this month plans to build plants in Geismar, La., and Ontario, Canada, to produce liquefied natural gas for heavy trucks and large ships.
China's largest non-state owned gas distributor, ENN, operates two LNG stations in the United States and has plans to build more.
"We think that right now the conditions are very good for developing this market, because America's natural gas is cheaper than gasoline or diesel," Jiang Yu, chief executive of ENN's international division, was quoted as saying by the Times.
Although LNG trucks typically carry a $40,000 to $80,000 premium over conventional diesel trucks, figures by energy consulting firm IHS CERA indicate that LNG heavy-duty trucks would recoup the initial cost of investment within three years without government incentives.