BISON Transport is buying 15 new liquified natural gas (LNG) tractors and in the first deal of its kind in the country, has agreed to purchase the fuel for those vehicles from Shell Canada for five years.
Winnipeg-based Bison and Shell Canada are partners in the resolution of this chicken-and-egg scenario -- what comes first: LNG-adapted vehicles or the fuelling stations to service them?
While LNG is considered to reduce CO2 emissions by about 20 per cent and cost a lot less than diesel fuel, there are currently no publicly accessible LNG fuelling stations.
Not only that, industry sources say, LNG conversions add about $100,000 to the cost of a new tractor or about an 80 per cent premium.
In connection with Bison's agreement to purchase LNG from Shell, the Calgary-based energy company is building fuelling stations in Calgary, Edmonton and Red Deer, Alta.
Lionel Johnston, Bison's corporate marketing manager, said, "This will help set the bar for the industry. We are not the only ones going down this road but we think it is a move in the right direction."
Bison may not be the only one but it is definitely a leader in the area.
Bob Taylor, Shell Canada's LNG business development manager said, "We are speaking to a number of leading fleets across Canada but Bison is really out front in Canada from that standpoint."
Even though there is an apparent cost saving in using LNG rather than diesel and the trucking industry is being compelled to take actions to reduce CO2 emissions, the industry is reluctant to go big into LNG usage.
Terry Shaw, general manager at the Manitoba Trucking Association, said LNG is one of the more legitimate alternatives to diesel.
"The trucks may cost a lot more but obviously there is some belief in the savings to be had or people wouldn't be buying them."
Johnston said the investment in LNG ties in with the company's overall environmentally sustainable practices.
The company estimates there will be a three-year return on its investment. It does not leave a lot of wiggle room considering Bison's policy is to replace its tractors after 48 months.
But with a fleet of about 1,250 tractors, the LNG pilot project is not likely to cause too much financial stress on the company.
Bison has made a system-wide commitment to reduce greenhouse gas emissions through a number of strategies, including aerodynamic improvements such as a tractor-trailer gap fairing, trailer belly skirts and aerodynamic profile tractor; speed and driver management tools such as truck-idling control strategies; intermodal transportation; long combination vehicles; and tire-efficient technology, including low-rolling resistance tires.
Bison believes this strategy is good business for a number of reasons.
"This is really important for us because our clients are the Walmarts, IKEAs, Home Depots and Targets of the world and they are increasingly interested in the practice of their supply chain," Johnston said.
"It means those companies are able to say that their consumer goods are brought to stores using this cleaner technology. That's something that will be of interest to those customers as we expand our practices."
The fuelling stations Shell is building in Alberta at Flying J will be the first of the kind at a traditional truck stop in Canada.
Shell is also developing an LNG refuelling infrastructure in the U.S. and promoting the technology to carriers with a reported guarantee that the price they pay for the natural gas-derived fuel will be at least 30 per cent cheaper than diesel.