UPS Expands Nat-Gas Truck Fleet

UPS (NYSE: UPS  ) was an early entrant into the national move to use more natural gas in transportation vehicles, experimenting with the fuel for more than 10 years, and making a big buy of trucks powered by engines from nat-gas engine pioneer Westport Innovations (NASDAQ: WPRT  ) back in 2011. As we see this week, UPS's enthusiasm for the technology hasn't waned.

On Tuesday, UPS announced plans to buy 700 new liquefied natural gas vehicles, and build four refueling stations for them, by the end of next year. With 1,000 nat-gas trucks on the road already (not all in the U.S.), UPS says that once this project is complete, it will own one of the most extensive LNG-powered truck fleets in the United States.

UPS explains its enthusiasm for the fuel, in part, because of the simple fact that LNG is cheap. Natural gas prices are roughly 30% to 40% lower than the cost of imported diesel, and likely to get cheaper as nat-gas production expands. In addition, environmental advocates point out that nat-gas carbon dioxide emissions are about 25% less pollutive than those of diesel.

Financially speaking, UPS notes that building the refueling stations to power its 700 new trucks will cost it a bit more than $18 million. The price of the new trucks themselves was not disclosed.


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