Strategic Partnership to Build America’s Natural Gas | My Assignment Tutor

Part Three: Planning Companies Form Strategic Partnership to Build America’s Natural Gas HighwayConsumers face a series of important questions when shopping for a new vehicle: Electric or hybrid? Regular or diesel? Powerful or fuel-efficient? Sporty or economical? Yet for eco-minded consumers who seek the ultimate in green motoring, the decision to purchase a vehicle often comes down to one simple question: Where do I fill it up? Where to refuel is a perplexing issue for buyers of alternative-fuel vehicles. This is because cutting-edge green vehicles lack a nationwide fueling infrastructure. The United States has more than 100,000 standard gas stations, yet few are equipped to fuel vehicles that run on electricity, natural gas, or biofu.el. For most consumers, that’s a deal-breaker. Despite the push for cleaner automobiles, today’s car buyers find themselves in a Catch-22: an ecologi-cally responsible vehicle might fit in with their needs and desires, but if there is no place to fill up, they can’t drive it, so why consider buying one? A similar dilemma exists for fleet purchasers, automakers, and gas station chains: Why purchase or even manufacture alternative-fuel vehicles if there aren’t any filling stations? On the other hand, why build filling stations if no one is pur-chasing or making alternative-fuel vehicles? Fortunately for consumers and the environment, Clean Energy Fuels Corp. and Navistar International have a plan to solve this chicken-and-egg dilemma. In 2012, the California alternative fuels provider and the Illinois semi-trailer truck giant announced a strategic partnership to build America’s Natural Gas Highway, a first-of-its-kind network of natural gas fueling stations across the United States. Slated for completion in 2014, America’s Natural Gas High-way will feature 150 liquefied natural gas (LNG) fill-ing stations in major metropolitan areas across the country—San Diego, Los Angeles, and Las Vegas out west; Houston, San Antonio, and Dallas in the Texas Triangle; New York in the east; and major cit-ies in the Midwest and South. Well-placed stations on in-between routes will tie the whole network to-gether, resulting in a coast-to-coast refueling infra-structure for natural gas vehicles.Top-level planners behind America’s Natural Gas Highway say their goal is to offer transport compa-nies a package deal made up of eco-friendly fleets, in-expensive fuel, and reliable fueling stations. “Navistar and Clean Energy have come up with a breakthrough program that offers customers a quicker payback on their investment, plus added fuel cost savings from day one of operation;’ says Navistar CEO Dan Ustian. “Together, our companies will demonstrate how a natural-gas-integrated vehicle offering the right dis-tribution and fueling solution can be integrated into a fleet’s operations to reduce costs and drive efficiencies:’ For a natural gas highway to work, effective collaboration must occur between a truck maker, a fuel supplier, a truck stop chain, and a natural gas driller. Navistar and Clean Energy have the first two bases covered: Navistar will sell its best-in-class LNG truck fleets to shippers, along with a mandatory five-year fuel-purchase contract through Clean Energy. News releases indicate that two other companies are included in the plan. Pilot Flying J Travel Centers, the largest network of truck and travel stops, is providing service locations where trucks can refuel. Likewise, Chesa-peake Energy, the number-two natural gas driller in the United States, has invested $150 million toward the initial rollout. So Navistar sells natural gas trucks to shippers, Clean Energy supplies the fuel, Pilot Flying J provides the fueling stations, and Chesapeake drills natural gas and provides investment capital. The plan sounds good on paper, but can it work? Clean Energy CEO Andrew Littlefair says that Amer-ica’s Natural Gas Highway is already well underway. “Clean Energy has already engaged over 100 shippers, private fleets, and for-hire carriers that have shared their operations to qualify for the economic opportu-nity of operating natural gas trucks. This has helped us in turn plan the first phase of the natural gas fueling highway;’ Littlefair says. Clean Energy’s chief marketing guru, Jim Harger, adds that the financial advantages of the plan are such that transport businesses simply can’t refuse.”You get the same lease cost of a diesel truck and get fuel savings too;’ Harger says. These natural gas fuel savings—approximately $1.50 per gallon compared to gasoline or diesel—have led to a sharp increase in the number of natural gas vehicles (NGVs) on the road in the United States. According to Natural Gas Vehicles for America (NGV America), 135,000 NGVs were in use in 2013, up from 120,000 in 2012.Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.


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