Tourmaline, Clean Energy Fuels to partner on natural gas fuelling station network

Canada's largest natural gas producer is partnering with a California-based clean energy company to build and operate a network of compressed natural gas (CNG) fuelling stations to help heavy-haul trucks get off diesel.

Calgary-based Tourmaline Oil Corp. made the announcement Tuesday alongside Clean Energy Fuels Corp., an American company that is the largest provider south of the border of low-carbon fuel for the transportation market.

Together, the two companies say they plan to invest $70 million to commission up to 20 CNG stations over the next five years. The stations will be branded Clean Energy and use Tourmaline's natural gas, giving trucking fleets a chance to improve their environmental performance.

"There are plenty of trucking fleets that have shown interest already, so we're feeling really good about our plan," Clean Energy Fuels CEO Andrew Littlefair told reporters in Calgary.

"Most of the customer-facing truck haulers . . . their customers want them to be sustainable."

While still a fossil fuel, natural gas is more environmentally friendly than diesel, with a 20 per cent lower C02 emissions profile. Converting one semi truck to CNG from diesel is the equivalent of taking up to five passenger vehicles off the road.

Swapping to CNG as a fuel source for trucks is an immediate way trucking fleets can impacttheir overall emissions, saysWarren Mabee,director of the Queens Institute for Energy and Environmental Policy.

"This is an option that can give them that immediate impact and give them an immediate reduction in the footprint that's associated with their fleet," he said.

But Mabee says dependingon theroutesa trucking company uses, the disbursement and frequency of these stations might not be suitable to their needs.

He says the cost of switching over to these trucks isanother consideration companies must make.

Mabee says though there is a reduction in emissions by switching to CNG as afuel source, "there is a floorto how far those emissions can be reduced, ...it doesn't take us all the way to net zero. It doesn't solve the problem of emissions altogether. Itgets us part of the way there."

There are other options that the long-haul trucking sector is looking at to reduce its greenhouse gas footprint. In the U.S., Clean Energy operates a network of 590 fuelling stations for the 25,000 heavy-duty trucks, buses and large vehicles in the country that run on renewable natural gas, or RNG.

RNG is not a fossil fuel it's made from organic waste. Switching from diesel to RNG drastically reduces carbon emissions by an average of 300 per cent, Littlefair said.

However, in Canada, RNG supply remains limited, though Littlefair said the fuelling station infrastructure required for RNG is the same as for CNG, meaning it can easily be added to the stations as it comes onstream.

Electric semi trucks may also someday be an option, though right now they don't have the range or power that trucking companies are looking for.

In the meantime, natural gas is abundant, easily distributed and affordable.

"We have to reduce emissions now. It's not about what we can do three decades from now," said Tourmaline CEO Mike Rose. "Natural gas is here now."

The first station under the agreement is located north of Edmonton and is already operational, and additional stations in Calgary, Grande Prairie, Alta. and Kamloops, B.C. are expected to be up and running by the end of next year, the companies said.

One of North America's largest logistics companies, Mullen Group Ltd., has already indicated it plans to use the network of stations for its growing fleet of CNG-powered trucks.

CEO Murray Mullen said his company has been operating CNG trucks in Alberta for more than 18 months. He said while the natural gas-powered engines are about 30 per cent more expensive than a traditional diesel engine, the CNG itself is cheaper than retail diesel fuel.

"CNG is the future. This makes business sense," Mullen said.

Currently, only around two per cent of new Class A heavy-haul trucks sold in North America are natural gas-powered. But Mullen said that's expected to grow rapidly as the sustainability movement gathers steam.

"We've got a lot (of natural gas trucks) on order, but I can't get them because the supply is tight. And the reason is because the industry across North America is moving in the same direction as I am," Mullen said.

"The change is happening so quickly that it's creating bottlenecks in the supply chain."

Mullen said by the end of the decade, 50 per cent of the vehicles he purchases for his fleet will likely be powered by natural gas, RNG or something else that isn't diesel.

"I can feel it when I talk to my industry peers. There's a lot of change happening," Mullen said.

"I don't see anybody that's denying it."