New Fuels for Trucking: Big retail, communications and package delivery companies use an enormous amount of fuel to power their own fleets. Finding a low-carbon alternative fuel is key to ensuring consumer products stay at affordable prices. Image: Ian Halsey/Flickr
Through their control over transport and logistics operations, companies have the power to make deep cuts in greenhouse gas emissions, but business leaders are being wary as they select from a wide array of alternative fuels and technologies.
Big retail, communications and package delivery companies use an enormous amount of fuel to power their own fleets and indirectly through their suppliers. According to the Department of Energy, medium- and heavy-duty trucks consume 16 percent of energy used by all modes of transportation. Overall, energy consumption in the trucking sector is expected to continue growing as the U.S. economy expands.
In this context, switching from high-cost diesel to a low-carbon alternative fuel isn't just the green thing to do; it's key to ensuring consumer products stay at affordable prices, Elizabeth Fretheim, director of business strategy and sustainability logistics at Wal-Mart Stores Inc., explained at a symposium last week hosted by the nonprofit group Business for Social Responsibility (BSR).
But there are a number of complexities related to the viability of a new fuel, Fretheim added, such as the vehicle payback period, the need for new infrastructure, overcoming maintenance issues and sourcing enough of an alternative fuel to test it and to fully adopt it if it works. There are concerns that a company will make big investments in a fuel or technology that's eventually pushed out of the market.
Picking an alternative fuel is like entering the VHS versus Betamax battle, "but supersized," said Fretheim. "We're very concerned about making the wrong switch -- buying the VHS when the Beta is the winner. So it's obviously something we're moving very slowly with."
Wal-Mart tested biofuels in its fleet made from the grease produced at its own stores but found the fuel did not work well in its new truck engines. The company also started a pilot with biofuel maker Dynamic Fuels, but limited fuel supply forced it to put the project on hold. Wal-Mart is currently testing a handful of trucks running on liquefied natural gas (LNG).
UPS tries liquefied natural gas
For United Parcel Service Inc., which has experimented with a wide range of alternative fuels across its fleet, LNG for long-haul trucks has been the clear standout, said Steve Leffin, director of global sustainability at UPS.
The domestically produced fuel is cheaper and cleaner than diesel and offers broader national security benefits, he said. Accessing infrastructure is a manageable issue, since UPS trucks refuel at the same hubs. LNG is also available for purchase from municipalities that use natural gas for heating homes, which alleviates concerns about fuel supply, said Leffin.
UPS is "very aggressive" on LNG, he said. This year, the company purchased 700 LNG trucks, bringing its total to 1,000.
But unknowns with respect to the life-cycle benefits of a given fuel are still a big concern for UPS. "We don't want to have companies spending capital and politicians making policies with unintended consequences," Leffin said.
The carbon footprint of an electric vehicle, for instance, varies drastically based on location and the energy mix. So depending on the route that vehicle runs, the fuel may make more or less economic and environmental sense. There are also outstanding questions related to the real-world efficiency gains of natural gas fuels and the life-cycle emissions they produce based on methane leakage in the production process.
"There will be greater investment [in alternatives] if there's greater confidence that a technology or fuel will not do more harm than good to the planet," Leffin said.