In 2012, U.S. President Barack Obama visited a UPS facility in Las Vegas and said, “As the people at UPS understand, we’ve got to have an all-out, all-in, all-of-the-above strategy that develops every source of American energy.” As he spoke, President Obama was standing in front of a UPS tractor powered with liquefied natural gas that was produced in the United States.
Liquefied natural gas (LNG) is one of the most promising alternatives to conventional diesel fuel for trucks, especially in the United States. LNGconfigured heavy-duty tractors combine strong pulling power and long range, so they compete operationally with comparable diesel-powered tractors – while offering a lower emission profile. The cost of operation can also be lower, because LNG is growing in availability from sources within the United States and thus is not burdened with the issues associated with imported oil.
The challenge is creating a critical mass that brings prices down. LNG tractors can travel only within range of LNG fueling stations, and it’s not cost-effective to build those stations without plenty of vehicles to use them. That’s one of the reasons for President Obama’s visit: UPS is making substantial financial and operational investments in LNG vehicles and infrastructure in the United States. Bigger LNG fleets enable manufacturers to achieve economies of scale. They also make it economically viable for companies to build fueling and maintenance stations. As LNG-fueled commercial transportation becomes more widely affordable, it will help the country lower its greenhouse gas emissions.
UPS already plays an important role in the nation’s longest LNG corridor, known as the Interstate Clean Transportation Corridor (ICTC). This corridor stretches from the West Coast to the Rocky Mountains and into the Southwest. We built a station along the ICTC in 2010 and have deployed 93 LNG tractors in the region, and by mid-2013, we had deployed more than 100 LNG tractors.
In the Southeastern United States, UPS is rapidly building up a substantial presence in LNG-fueled commercial transportation primarily using a hub-and-spokes strategy, which means that our long-haul tractors return each evening to a base near one of our LGN fueling stations. When possible, we make these fueling stations available to the public so that other companies can benefit from greater availability of LNG as well.
In 2012, we planned and budgeted for two new LNG stations in Tennessee, in Nashville and Knoxville, and for 122 new LNG tractors to utilize these stations. We expect to announce more LNG stations and tractor purchases during 2013, which will expand the number of regions and states we serve with low-emission LNG technology.