April 1, 2023

Natural Gas Use in Long-Haul Trucks Expected to Rise

The natural gas boom has already upended the American power industry, displacing coal and bringing consumers cheaper electricity.

Now the trucking industry, with its millions of 18-wheelers moving products like potato chips, underarm deodorant and copy paper around the country, is taking a leap forward in switching from petroleum to cleaner-burning natural gas. And if natural gas remains cheap, consumers may benefit again.

This month, Cummins, a leading engine manufacturer, began shipping big, new engines that make long runs on natural gas possible. A skeletal network of refueling stations at dozens of truck stops stands ready. Major shippers like Procter Gamble, mindful of both fuel costs and green credentials, are turning to companies with natural gas trucks in their fleets.

And in the latest sign of how the momentum for natural gas in transportation is accelerating, United Parcel Service plans to announce in the next few days that it will expand its fleet of heavy 18-wheel vehicles running on liquefied natural gas, or L.N.G., to 800 by the end of 2014, from 112. The vehicles will use the new Cummins engines, produced under a joint venture with Westport Innovations.

U.P.S., like the rest of the industry, still has a long way to go in the conversion, but the company hopes to make natural gas vehicles a majority of its new heavy truck acquisitions in two years.

The company is benefiting from incentives provided by various states and the federal government, which offer tax credits and grants for installing natural gas fuel stations and using vehicles fueled by natural gas.

“By us doing this it will help pave the way and others will follow,” said Scott Wicker, chief sustainability officer at U.P.S.

“Moving into L.N.G. is a means to get us onto what we see as the bridging fuel of the future and off of oil,” he said. “It’s the right step for us, for our customers and for our planet.”

The move could also cut the country’s oil import bill. There are currently about eight million heavy and medium-weight trucks consuming three million barrels of oil a day while traveling the nation’s highways. That is nearly 15 percent of the total national daily consumption and the equivalent of three-fourths of the amount of oil imported from members of the Organization of the Petroleum Exporting Countries. Roughly two-thirds of the diesel used as transportation fuel nationwide feeds three million 18-wheelers, the main trucks hauling goods over long distances.

In the last four years, the natural gas shale drilling boom has produced a glut of inexpensive fuel, leading producers to argue that the country should wean its commercial and municipal transportation systems from a
dependence on imported oil to domestically produced natural gas.

It is cheaper, saving truckers as much as $1.50 a gallon, and it burns cleaner, making it easier to meet emissions standards. The domestic fuel also provides some insulation from the volatile geopolitics that can drive up petroleum prices.

Still, manufacturers and fleet owners have been slow to switch, partly because natural gas vehicles can cost almost twice as much as conventional trucks and because only a few gasoline stations have the specialized equipment needed to dispense the fuel.

Now, as name-brand manufacturers and chains like Nike and Walmart have pressed for transportation of their goods by natural gas vehicles and companies like U.P.S., FedEx and Ryder System have started exploring the option, truck makers have begun bringing natural gas vehicles to the market. Major manufacturers, including Navistar and Volvo, have plans to offer long-haul natural gas vehicles.

Clean Energy Fuels — a company backed by the financier T. Boone Pickens and Chesapeake Energy — has peppered major routes with 70 stations, many at truck stops operated by Pilot Flying J. (The truck-stop company, whose chief executive is Jimmy Haslam, owner of the Cleveland Browns, is separately under investigation for potential rebate fraud.)

Clean Energy has plans to complete 30 to 50 more by the end of the year. Shell has an agreement to build refueling stations at as many as 100 TravelCenters of America and Petro Stopping Centers while ENN, a privately held Chinese company, hopes to build 500 filling stations as well.

That emerging network “really has changed the interplay between the shippers and the contracted carriers,” said Andrew J. Littlefair, Clean Energy’s chief executive. “The whole deal’s beginning to change.”

Though the network is growing rapidly, it has a long way to go. As of May 2012, only 53 L.N.G. fueling stations were in the United States, more than two-thirds concentrated in California, along with 1,047 compressed natural gas stations around the country, according to the Energy Department. In comparison, there were 157,000 fueling stations selling gasoline.

Vehicle use of natural gas in the United States is still negligible but it has been growing. Among fleets whose vehicles travel shorter routes, like transit buses, refuse haulers and delivery trucks, use of compressed natural gas is much further along. Last year, more than half of newly purchased garbage trucks ran on compressed natural gas.

The federal Energy Information Administration last year projected that if enough L.N.G. filling stations were built and economic conditions were right, sales of heavy-duty natural gas vehicles could increase to 275,000 in 2035, equivalent to 34 percent of new vehicle sales, from 860 in 2010. But estimates vary. Citigroup recently forecast that 30 percent of the heavy truck fleet would shift to natural gas by the end of the decade, but some in the transportation industry put that figure much lower.

Article source: http://www.nytimes.com/2013/04/23/business/energy-environment/natural-gas-use-in-long-haul-trucks-expected-to-rise.html?partner=rss&emc=rss

787 Dreamliner Battery Problems Put Boeing on Edge

But the grounding, prompted by a battery fire on one jet and the emergency landing of another, has knocked Boeing off stride. Now, investors as well as government officials are paying close attention to see how big the issue becomes for the company, which is one of the nation’s biggest exporters.

Although company officials said they expected to find a solution quickly, federal regulators on Sunday ruled out one simple explanation — that the battery was overcharged. If the problems prove more complicated, they could threaten Boeing’s plans to expand production of the planes, and the jobs that go with them.

“Boeing has a lot at stake, for its headlining airliner and for the company brand,” said Scott Hamilton, the managing director of the Leeham Company, an aviation consulting firm in Issaquah, Wash.

Mr. Hamilton said he had no doubt that Boeing would “work its way through this.” But until more is known about the batteries, he said, “it’s impossible to draw conclusions about what went wrong, what the fix is, how long it will take and what the long-term damage to the 787 and to the Boeing brands will be.”

In what would seem to be the worst possible outcome right now, Boeing might also have to redesign its powerful new lithium-ion battery system, or even switch back to older, safer models. Aviation experts said such changes could cost hundreds of millions of dollars and shave off some of the 20 percent savings in fuel costs that the new jets have delivered.

Analysts say Boeing, which has about $80 billion a year in sales, has the financial muscle to weather the problems and make production of the next generation of airliners succeed in an industry familiar with outsize bets.

But the recent incidents were a reminder of the manufacturing and testing mishaps that had delayed the development of the planes. And any lengthy new delay could tax the patience of airlines and investors who thought the Chicago-based company had put the problems behind it.

Boeing’s stock has dropped only 3.4 percent, to $75.04 a share, in the two weeks since the battery fire on a 787 parked at Logan International Airport in Boston. The Federal Aviation Administration grounded the jets after another 787 made an emergency landing in Japan on Wednesday because of a smoke alarm in the cockpit. The F.A.A.’s order applied to six United jets; an additional 44 around the world have also been grounded.

David E. Strauss, an analyst at UBS, said big investors were “cautiously optimistic” that the batteries just came from a bad manufacturing batch or could be fixed with minor changes.

But, he said, “if the F.A.A. came out tomorrow and said to redesign the battery, and Boeing said it would take three months, the stock is going to go down on that.”

“Investors have been expecting that Boeing would finally start freeing itself of the cash drain from all the problems in developing the plane and that they would start to see more rewards now,” he added.

The National Transportation Safety Board said Sunday that it had ruled out excessive voltage as the cause of the battery fire on the 787 in Boston, adding to the mystery of the cause.

Besides the hazards to passengers if fire or smoke escaped from the battery containers, the problems are important because the 787 relies more on electrical systems than previous planes. Its use of electric rather than hydraulic systems is one of the innovations, along with more efficient engines and a lightweight carbon-composite structure, enabling the plane to save on fuel.

Boeing officials have said they had not previously had any problems with the batteries during 1.3 million hours of flights by their test pilots and eight airlines. Marc R. Birtel, a Boeing spokesman, said Saturday that one lithium-ion battery caught fire in 2006 during tests that Boeing held with the F.A.A. But he said the problems stemmed from the way the test was set up, and not from the battery design.

Jad Mouawad contributed reporting.

Article source: http://www.nytimes.com/2013/01/21/business/battery-fire-resolution-may-weigh-on-boeing.html?partner=rss&emc=rss

DealBook: Wary of a Takeover, Qantas Hires Macquarie

HONG KONG — Qantas Airways of Australia has hired the investment bank Macquarie to provide advice on fending off potential hostile takeover bids after its shares plunged to their lowest levels since the company was privatized in 1995.

Thomas Woodward, a spokesman for the airline, said on Tuesday that hiring Macquarie was a defensive move in case private equity groups or others attempted a takeover. He declined to elaborate on the decision.

Qantas, based in Sydney, could be vulnerable because its shares have declined 26 percent this year as the carrier struggles with high fuel costs and increased competition at home and on international routes.

Speaking in Beijing on Tuesday at a meeting of the International Air Transport Association, Alan Joyce, the chief executive of Qantas, said the airline had not been approached with offers but was preparing for “a whole range of scenarios,” the Australian Financial Review reported.

Shares in Qantas fell more than 18 percent on a single day last week after the company announced that it expected to book a pretax loss of more than 450 million Australian dollars in its international unit in the financial year ending this month. Analysts expect Qantas to record an after-tax net loss from all operations of 230 million dollars ($228 million), its first annual net loss in more than a decade.

Qantas has seen yields on its revenue eroded as it battles lower-cost competitors at home, mainly Virgin Australia, while on long-haul overseas routes it faces ongoing challenges from rival Asian and European carriers. Slumping demand because of the euro crisis, high oil prices and a persistently strong Australian dollar have also weighed on its results.

The airline has also been hampered in recent months by a series of labor disputes, including one that resulted in a two-day shutdown in October. The forecast losses for the current financial year include a charge of 100 million dollars related to industrial action.

Last month, Qantas announced a restructuring plan, splitting its domestic and overseas businesses into separate units in a bid to engineer a turnaround in its international operations by cutting costs and reconfiguring its fleet.

‘‘With the deterioration in inbound travel demand as well as increasing domestic yield pressure, there is much resting on the turnaround of the international business, not least from the ratings agencies,’’ analysts at Credit Suisse in Sydney wrote last week in a research note.

The ratings agency Standard Poor’s put Qantas on watch last week for a one-notch downgrade, to one level above noninvestment grade. The airline’s rating had already been downgraded to that level by Moody’s Investors Service in January.

Qantas had been targeted for a takeover in 2006 by a consortium of investors led by Macquarie and the private equity group TPG Capital of the United States. That deal, which valued the airline at more than 11 billion Australian dollars, ultimately failed to win approval from shareholders.

The airline, moreover, is subject to strict ownership regulations that cap foreign control at 49 percent, meaning Australian parties would have to play a majority role in any takeover bid, and such a transaction would be subject to multiple regulatory approvals.

Shares in Qantas rose 10.8 percent on Tuesday, to 1.08 dollars, after the company confirmed hiring Macquarie to defend against a takeover, leaving it with a market value of 2.4 billion dollars. On Friday, the stock had slumped to a record low of 97 cents, almost half the price of 1.90 dollars a share at which the Australian government floated its 75 percent stake 17 years ago, when it privatized Qantas.

Analysts said the airline’s decision to steel itself against a takeover before any offers had materialized could be read in several different ways.

“It could be they think there is potentially someone coming at them,” said one Australian airline analyst who declined to be identified because he was not authorized to speak to the media. “From a cynical perspective, given the way their shares are down, it could also be a way of saying in the public domain they think they are undervalued.”

Part of Qantas’s recent strategy has been to focus on budget travelers in Asia, announcing plans in March to establish a new low-cost carrier in a $198 million joint venture with China Eastern.

Called Jetstar Hong Kong, it is scheduled to begin service next year and will operate short-haul flights around the region, including to mainland China, Japan, South Korea and Southeast Asia.

Qantas’s low-cost Jetstar brand already operates successfully in Australia and New Zealand and has expanded its footprint to Southeast Asia by flying out of Singapore and Vietnam. A Japanese operation, Jetstar Japan, is poised to begin service next month.

This post has been revised to reflect the following correction:

Correction: June 12, 2012

An earlier version of this article misstated the nature of anticipated losses at Qantas. A pretax loss of more than 450 million Australian dollars is expected in its international unit, not the entire company, which analysts expect to report an after-tax loss of 230 million dollars in the financial year ending this month.

Article source: http://dealbook.nytimes.com/2012/06/12/wary-of-a-takeover-qantas-hires-macquarie/?partner=rss&emc=rss

Emirates Airline Orders 50 Boeing 777s

Emirates, the government-owned carrier based in Dubai, said the deal was worth $18 billion, the largest commercial order by value in Boeing’s history.

The 777 “has served Emirates very well in terms of seat costs,” Emirates’ chairman, Sheik Ahmed bin Saeed al-Maktoum, said at a news conference. Fuel costs took a big toll on the airline’s first-half profits, sending them down 76 percent.

Emirates said it had adequate financing in place for 2012, and planned no new bond issue. Sheik Ahmed said the airline, which began a heavily oversubscribed $1 billion bond issue in June, would consider a bond if it was needed and if the timing was right, adding “we don’t have a push.”

Including options to buy 20 more of the twin-aisle 777 and other agreements, the total deal is worth $26 billion, Emirates and Boeing said.

Delivery of the aircraft is scheduled to begin in 2015.

James F. Albaugh, chief of Boeing’s commercial airplane division, said the order would sustain thousands of American jobs. Boeing delivered 127 commercial airplanes in the third quarter, including 100 of its best-selling 737 narrow-body planes and 21 wide-body 777s. Boeing, which is paid for its airplanes at delivery, set its commercial airplane delivery guidance for 2011 at about 480, down from previous guidance of 485 to 495.

A muted air show two years ago came days before Dubai lurched into its own property and financial crisis in 2009, but the city-state has been recovering after a bailout from neighboring Abu Dhabi.

Dubai’s ruler, Sheik Mohammed bin Rashid al-Maktoum, spent hours at the air show, looking at commercial and military planes and touring the floor before taking a seat at the Emirates news conference, underscoring the keen interest that the emirate has in the success of its airline and ambitions for Dubai to become a major hub.

Demand for passenger aircraft has been remarkably robust, led by rising numbers of the middle classes in Asia and the Middle East and a shift of economic power from the West, but some analysts fear contagion from Europe’s debt crisis.

“Nothing goes up forever, but we really believe the demand for airplanes is driven by world G.D.P.,” Mr. Albaugh of Boeing said on the eve of the show.

Increasing competition to sell military hardware to gulf states amid rising tensions over Iran’s nuclear activities also dominated the start of the show and could lead to an increase in military orders.

In a blow to France, an $11 billion contest to sell fighters to the United Arab Emirates heated up on the eve of the event when the Eurofighter consortium disclosed that it had been asked to present its Typhoon warplane to the country’s top military.

A spokesman for the consortium of companies from Britain, Germany, Italy and Spain confirmed a report on the briefing in Flightglobal.com, an industry publication, but declined to comment further.

The briefing by British officials took place in October in response to a request from the Emirates, which have held long-running talks with France over a purchase of up to 60 Rafale fighters built by Dassault Aviation.

The United Arab Emirates have been in talks with France since 2008 but discussions have been subjected to occasional disruption.

The Emirates have also inquired about the Boeing F/A-18 Super Hornet.

President Nicolas Sarkozy of France has made it a priority to find a foreign buyer for the multi-role Rafale, billed as one of the most effective but also one of the most expensive fighter jets in the world.

Article source: http://feeds.nytimes.com/click.phdo?i=a1f14f7abf8192e9c2c22ef34298a590

European Airfares Look Inviting Next to U.S. Prices

But travelers who have flown within Europe lately often took away a different impression — that airline tickets were surprisingly inexpensive, especially compared with prices to fly within the United States.

A one-way ticket between Edinburgh and Dublin, for instance, can cost as little as $40. A one-way ticket from New York to Washington, about the same distance, starts at $65. Both prices, which vary depending on the travel date, include taxes and unavoidable fees, but not baggage and other optional charges.

While it is tough to do a statistically rigorous comparison, especially since the European Union does not collect fare data for its 27 members, there is little doubt that ticket prices have fallen sharply within Europe, despite higher fuel costs, because of an explosion of competition from low-fare airlines like easyJet and Ryanair. Although Southwest Airlines and other carriers have put similar pressure on prices within the United States, anecdotal data suggests that it is still generally more expensive to fly between major cities in America than it is to fly between cities in Europe.

“Even after taxes, you see a better fare per mile in the European Union than you do in the United States,” said Mark Milke, a director at the Fraser Institute, a public policy research group in Calgary, Alberta, who published a paper last year comparing the lowest fares available on a sample set of routes.

Using that data, Mr. Milke calculated that airline passengers traveling within a single country in Europe last year were paying about 11 cents a mile, including taxes and fees, or 14 cents a mile to fly between two European countries. In the United States, by contrast, passengers were paying about 23 cents a mile.

Since these figures were based on a limited number of case studies, results from a wider set of data would probably vary. In fact, the Air Transport Association, the airlines’ trade group, calculates that domestic tickets in the United States cost about 16 cents a mile, excluding taxes, or at least 19 cents a mile with taxes (using the group’s estimate that taxes add 20 percent to the price of a ticket).

Carlos Mestre, deputy head of the European Commission’s transport unit, said the European Union did not collect data from airlines that would enable it to calculate a similar cost per mile. But based on information the commission has gathered, it has published numerous reports that say airfares have decreased significantly since the late 1990s, when the European Union began allowing airlines to fly freely among member countries.

“Prices have gone down quite dramatically,” Mr. Mestre said, explaining that the rapid expansion of low-fare carriers has increased competition on many routes that were once dominated by a single national airline. The number of routes within Europe has also increased 140 percent from 1992 to 2010.

Low-fare airlines now carry more than a third of all passengers traveling within Europe, forcing older competitors to lower prices, especially on popular routes.

“In Europe, there has been an awful lot more competition in the last 10 years,” said Brian Pearce, chief economist for the International Air Transport Association. “That has led to a lot more choice for passengers as well as it being cheaper to travel.”

Mr. Pearce said European travelers had benefited from the fact that many large cities had multiple airports, allowing newer airlines access to these markets. That is not so much the case in the United States, where airlines like Southwest have fought to obtain scarce takeoff and landing slots in congested cities like New York.

European airlines also face more competition than their American counterparts from other forms of transportation, particularly Europe’s robust rail network.

That competition is likely to increase in the coming years, since the European Commission recently announced an initiative to standardize the information on rail schedules and prices across member countries, making it easier for travelers to compare the cost of airlines versus the train between two cities. On some routes, ferries could be part of that comparison.

Steve Lott, a spokesman for the Air Transport Association, said the shorter distances between cities in Europe was another factor influencing the competitive landscape.

“What type of model capitalizes on frequent short-distance flights?” he said. “Low-fare airlines.”

Those shorter distances also mean that driving is a viable option for many trips within Europe, especially now that border controls have been lifted, creating further competition for European carriers, Mr. Lott said.

Some analysts also note that Europe is going through a competitive phase that already took place in the United States after airline deregulation in the 1970s.

“They’re earlier in a process the U.S. experienced a while ago,” William S. Swelbar, a research engineer with the M.I.T. International Center for Air Transportation, said, noting that when adjusted for inflation, the average domestic fare in the United States has declined more than 50 percent since deregulation.

“We have a maturing market and maturing airlines,” he said. “As a result we’re seeing prices go up.”

Others argue that regulatory policies in the United States favor established airlines, stifling competition and making it harder for new carriers to enter the market and succeed.

Mr. Milke is among those who say they believe that rules prohibiting foreign-owned airlines from operating in the United States — for example, allowing Aer Lingus to fly passengers from Boston to Chicago — keeps ticket prices higher than they would be if this restriction were dropped.

“Low fares are the result of the removal of barriers to competition,” he said. “With lower prices, people travel a lot more, and that creates jobs.”

Article source: http://feeds.nytimes.com/click.phdo?i=9283e4a9f6f3c33b37123dffb9f4b9a0

New M.P.G. Stickers Include Greenhouse Gas Data

The new labels, which replace a five-year-old design that provided only basic information about estimated fuel economy, represent the broadest overhaul in the sticker program’s 35-year history. There will be different labels for conventional vehicles, plug-in hybrids and all-electric vehicles, with cars running solely on battery power estimated to get 99 miles per gallon.

The Environmental Protection Agency and the Department of Transportation, which are jointly responsible for the window sticker program, rejected a radically different design that would have prominently displayed a letter grade from A to D comparing a given vehicle’s fuel economy and air pollution against the entire fleet of new cars.

Automakers objected to that sticker as simplistic and potentially misleading. The government instead adopted a much busier label with more information and a sliding scale comparing vehicles across classes.

“These labels will provide consumers with up front information about a vehicle’s fuel costs and savings so that they can make informed decisions when purchasing a new car,” said Ray LaHood, the transportation secretary.

The new stickers will for the first time include a greenhouse gas rating, comparing a vehicle’s emissions of carbon dioxide and other heat-trapping gases with those of all other vehicles, as well as a smog rating based on emissions of other air pollutants such as nitrogen oxide and particulates.

Cars capable of running on electricity will get the highest greenhouse gas and smog ratings, but the fine print indicates that the measure does not take into account emissions from power plants generating the electricity used to charge up the vehicle. Stickers for plug-in hybrids and electric cars will also include their charging time and estimated range running in electric-only mode.

Gloria Bergquist, vice president for public affairs at the Alliance of Automobile Manufacturers, said the government was right to leave power plant emissions out of its ratings for electric vehicles.

“Upstream emissions raise a complex mix of factors that auto manufacturers have no way of predicting or controlling, including the electric energy mix of a particular geographic region, and how much — or in what manner — vehicles are driven,” she said in a statement.

The labels will include an estimated annual fuel cost based on 15,000 miles traveled at a fuel price of $3.70 per gallon as well as an estimate of how much more or less the vehicle will cost to operate over five years than an average new vehicle. In addition to the familiar city, highway and combined fuel economy estimates expressed in miles per gallon, the sticker will include an estimate of how much fuel the vehicle will need to travel 100 miles.

The E.P.A. said the new gallons-per-mile metric, combined with the estimated fuel costs, will provide consumers a more accurate measure of efficiency and expense than the traditional miles-per-gallon figure, which rarely reflects real-world driving conditions.

The gasoline price is based on Department of Energy surveys and calculations and will typically be updated annually, the E.P.A said.

The label will also include a QR Code that can be scanned by a smartphone to obtain cost estimates based on a consumer’s driving habits and the price of gasoline and electricity where he or she lives, as well as comparisons with other vehicles. Such calculators will also be accessible online.

The National Automobile Dealers Association welcomed the new design and said it was relieved that the federal government had rejected the letter grade label.

“For decades, car and truck buyers have relied on miles per gallon — or m.p.g. — to compare the fuel economy of different vehicles,” the association said in a statement. “NADA applauds the Obama administration’s decision to drop the ill-advised ‘letter grade’ in favor of one that prominently displays a vehicle’s m.p.g. By doing so, car shoppers can make informed comparisons on dealers’ lots, allowing them to take advantage of new technologies, which will ultimately put more fuel efficient vehicles on the road.”

Some environmental advocates pushed hard for the letter grade system, saying it provided car buyers the clearest way to compare vehicles across classes.

Luke Tonachel of the Natural Resources Defense Council said that the letter grade would have been preferable but said he was glad that the new label provides pollution impacts and operating costs.

Dan Becker, director of the Safe Climate Campaign, who has been involved in fuel economy issues for three decades, was far harsher in his judgment of the administration’s decision and the auto industry’s lobbying campaign against the letter-grade system.

“The Obama administration has dashed consumers’ hopes for clear information to make educated choices about which cars are really clean,” he said. “With its $80 billion bailout in hand, the auto industry has beaten the administration into abandoning the letter grade label.”

He said the label adopted by the agencies denied consumers clear information that would help them make informed choices. He added that he hoped the administration would move forward with strong new mileage and emissions standards for the 2017-to-2025 model years, with a mandate for a new car fleet average as high as 60 miles per gallon.

Those new rules are due this fall.

This article has been revised to reflect the following correction:

Correction: May 25, 2011

An earlier version of this article misstated the letter grade label for vehicles in a proposal that was rejected by federal agencies.  It is A to D, not A to F.

Article source: http://feeds.nytimes.com/click.phdo?i=fbd981dfe9abfd5882b57c34ff76b5fe