Commissioning new technology always produces surprises, Paul. Did you encounter any problems in your durability and reliability testing activities?
There were a few, but none that we were not able to fix. We ran our two trucks on the road for some months, but decided it would be better to monitor the operation of the fuel pack whilst it was stationary in the workshop. We built a fuel storage and ‘fast fill’ refuelling system and connected the on-truck fuel pack to it. With this set up, we were able to simulate up to 3,000 km travelled per day, for a total of over 100,000 km, and were able to stress test and troubleshoot the fuel pack in a controlled and comprehensive test program.
We are dealing with gas at over 300 barg, so control valves and shut-off devices can be exposed to pretty severe operating conditions. We identified a need to make some minor alterations to the geometry of float valves in our fuel storage cylinders, and to modify the actuation of control valves to enhance control characteristics and valve durability.
We also took the opportunity to re-design both the crate in which our gas cylinders are racked and the stainless tubing on the pack to eliminate any risk from vibration and /or expansion. This work also resulted in a better layout so that we can now have a five-cylinder pack if required in the same space as the original four-cylinder unit. The re-configuration gave us a bonus in improved accessibility and serviceability for the control systems and pipework. We have plans to further streamline the fuel pack, anticipating that we will eventually need to mass produce them.Article continues below…
Another major benefit from our time in the workshop was that we accelerated the development of a rapid gas transfer system which enables us to re-fuel a fuel pack to pressures above 300 barg in about 20 minutes. This means we can refuel a truck as quickly as a diesel bowser.
What are you doing about gas supply?
We have had help from Australian Power and Gas and APA Group to install a temporary gas supply at Brisbane Truck Centre to which we have connected a gas transfer system to enable us to re-fuel the two demonstration trucks. We commissioned that facility in February. When we move to the next phase of ten or more trucks we will require additional and larger high-pressure facilities. We have had discussions with the Port of Brisbane and others as to where that might be sited.
Are gas producers interested in what iGas is doing?
We have not really engaged with producers as yet. Our approach has been to get the technology right before we worry about gas. The market for gas as transport fuel is untapped and able to provide a substantial net-back to the producer, so the market should work in our favour when we need gas. We are assuming that CSG and shale gas will be looking for a domestic market here. That is certainly the case in the United States.
What is happening in the US?
A Salt Lake City-based trucking company, Carbon Cutter Transport LLC, contacted us late in 2011. They had read of iGas in the November 2010 edition of Gas Today that was re-printed in the US, and wanted to know what we were up to.
One of the principals is new to trucking, but has a gas vehicle background, having recently sold a business to Impco Technologies Inc., a world leader in gas engine technology. He believes the conversion of US highway trucks to gas is both a national imperative and a business opportunity. He already has two Westport HD-engined trucks with LNG fuel systems in his fleet as his entry to gas trucking.
He and his business partner flew to Australia and asked us to provide him with an iGas system for one of his trucks. We have built a fuel pack for them, and they will soon have a truck running between their base in Salt Lake City, Utah, and the Port of Los Angeles as the first iGas US demonstrator.
We learnt from him of the rapid ramp-up of compressed natural gas (CNG) availability at service stations in the US. We also learnt of the determination of the Obama administration to establish natural gas as a transport fuel to reduce America’s dependence on imported liquid fuels, and of the rapid build-up of shale gas production.
There are over 6 million heavy-duty highway trucks in the US. It is a huge market for us, with federal and state cash and tax incentives for conversion to natural gas now becoming available as the US economy rebuilds. It’s pretty exciting.
Do you have working trucks operating in Australia?
Yes we do. Simon Transport, a large Queensland-based transport company, were kind enough to offer an iGas prime mover a spot in the fleet delivering water pipe from Wacol in Brisbane’s outskirts to a site near Dalby for a CSG project. The truck has been hauling about 20 tonnes of large-diameter pipe to Dalby each day which includes climbing the Great Dividing Range to Toowoomba.
We are very grateful to David Simon for the chance to seriously demonstrate our capability, enabling us to extend our reliability testing in a real work situation.
What are your next steps?
It is most important that we demonstrate that we are as reliable and robust as the diesel alternative as we commercialise iGas in three phases.
For Phase 1, we are aiming to have up to ten trucks in tow hire service here in Queensland as soon as possible. That will be our ‘demonstration’ fleet, and will provide iGas with industry and political exposure. We will still be in the durability and reliability demonstration mode with these ten trucks.
Phase 2 is the step where we truly commercialise, with fleet owners changing out diesel trucks for iGas trucks as they turn over their fleet. With this step we will aim to have 250 trucks in Queensland-based fleets and we will need to build at least two refuelling stations on one or more highways. We expect these 250 trucks will still be running out and back from Brisbane, as we build our reputation.
Phase 3 will occur when we are ready to seek a major injection of capital, take on the major inter-city routes nationally and set about installing iGas systems on 1,000 and then 10,000 trucks.
What about in North America?
We have not yet established a plan for North America except to get our demonstration truck running there. When we go over to commission it, we expect our American partners, Carbon Cutter Transport, will have developed a plan to follow on from the first truck. We anticipate great interest in that country as there is a national objective to wean themselves off imported liquid fuels and onto natural gas. CNG is playing a big role in their thinking, with natural gas prices at historic lows due to an abundance of shale gas.
What does the trucking industry think of iGas?
It is a bit early for us to tell, but we have created a great deal of interest. What we do know is that truck owners expect any alternative to diesel to be as reliable as diesel, as flexible as diesel and cheaper. Some truck owners are attracted to the cleaner emissions that gas can provide, but it is a competitive and expensive industry. Reliability and cost reduction are much more important to them, and we are pleased to say we will deliver both.
How large is this potential new market for gas?
Each truck in highway service and running about 250,000 km per year consumes about 6 terajoules per year. Our target market in eastern Australia is about 25,000 trucks; they use well over 120 petajoules per annum, around the same quantity presently consumed in the New South Wales and Australian Capital Territory gas markets combined. We will not get them all, but it is a large untapped market for natural gas.
Think about the US. There are over 6 million ‘big rigs’ on their highways consuming thousands of petajoules of energy equivalent diesel. Transport fuel is a huge market for natural gas.
What does it mean to the trucking industry?
Most importantly, natural gas with an iGas system will be cheaper than diesel whilst oil remains above $60 per barrel, and much cheaper with oil above $100. It will also make the trucking industry cleaner and greener and be better for their engines. Using natural gas instead of diesel will result in about 27 per cent less greenhouse gas emissions and reduced noxious emissions.
How are you going to fund the next steps?
We have spent about $5 million so far, and do not have endless funds. We are making it known that we are looking for funds from people who we believe can share our vision. We are in discussions with potential investors.
What is the Government doing to help?
We have not asked for Government help – at least not yet. There is funding available for ideas such as this, and part of the answer to the previous question probably should have been that we would seek grants to the extent we are qualified, but frankly we have not had the time to do much lobby work or apply ourselves to the question. Now that we are at the early commercialisation phase, we are looking at our eligibility for Commercialisation Australia funding.
What is different this time? Gas seems to promise but not deliver as a truck fuel.
Now that is an excellent question. First and foremost, Westport has developed the Westport HD engine which runs on 95 per cent CNG directly injected into the combustion chambers of the engine. The engine runs on natural gas with identical torque and power characteristics as on diesel. That is the breakthrough that natural gas needed, and it only happened a few years ago.
Second, carbon fibre-wound composite cylinders, which were developed for the space program, are now produced for commercial application. They are lightweight and extremely strong, able to contain gas at the 300 barg injection pressures required by the diesel cycle engine.
Third, crude oil prices have settled above $100 per barrel resulting in diesel prices above $35 per gigajoule. This price permits the additional capital requirements of a gas-fuelled engine, including the provision of the fuel pack and re-fuelling facilities to be amortised within it, and provide a financial incentive to the truck owner to changes to gas, provided a large enough market can be developed.
Fourth, out of the blue, CSG and now shale gas reserves are proving to be immense, ensuring abundant competitive wellhead gas can be available, particularly here and in North America, whilst the cost of imported liquid fuels and energy security are becoming major political issues.
Fifth and finally, we at iGas Energy have developed a CNG delivery system for the Westport HD engine that works, is reliable, fits on the truck, is not too expensive, and can deliver savings to the truck owner.