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Monday, March 26, 2012

Road Freight Transport Costs

Up, Up and Away

lean Air Power Tackling Road Freight Transport Costs Bi-Fuel Diesel and CNG (compressed natural gas) lean Air Power Tackling Road Freight Transport Costs Bi-Fuel Diesel and CNG (compressed natural gas)
Clean Air Power: Solving Road Freight Transport Costs Diesel/Gas Australia: Solving Road Freight Transport Costs

In December 2011 the Australian Government announced the release of an Energy White Paper.

However the Australian Government made no announcement of  a number of significant energy policy papers prepared on the on the same date.

No announcement reveals  "The cost of road freight transport is expected to increase in the next decade because there are fewer unrealised fuel efficiency gains available to offset rising oil prices...."

The impact on business, consumers and rural producers may well far exceed that of any price on carbon. Yet the Australian media ignores this serious issue and remains fixated on the "Carbon Tax". This is likely to be little more than a minor irritant in comparison to the expected increase in the cost of road freight.

The Australian media is also doing little or nothing to inform business, agricultural interests and industry of measures being taken to provide transport energy security and stable fuel prices.
Keep on truckin’ with LNG
The planned LNG fleet refuelling network will include transport company depot refuellers located at the transport company yard, and public refuellers located at selected truck-focused service stations and roadhouses around Australia. (From Keep on truckin’ with LNG, Gas Today — November 2011)

The serious problem of increasing cost of road freight is buried within the following information - available on the web site of Australian Department of Resources, Energy and Tourism -

Strategic Framework for Alternative Transport Fuels

The Australian Government released the Strategic Framework for Alternative Transport Fuels (the Framework) on 13 December 2011.  The Framework was developed in consultation with industry, government and other stakeholders throughout 2011 and is an input to the Energy White Paper development process. Information about the Energy White Paper process is available at

The Framework establishes a long term approach to a market led adoption of alternative transport fuels in Australia and includes 20 actions for industry, Government and other stakeholders to implement to address identified barriers to uptake, including:
  • providing leadership and certainty through the: application of Alternative Transport Fuels Principles; continuation of coordinated policy approach; the collaborative review of guidelines to remove unintended measures that could limit feedstock and technologies; and establishment of relevant advisory mechanisms.
  • ...Read More

The final document listed on the above web page is entitled "Possible Futures: Scenario Modelling of Australian Alternative Transport Fuels to 2050".

At page iv this documents includes several observations -

  • The extent to which transport fuel self sufficiency remains at this level or improves further is largely dependent on whether there are strong social and economic factors driving alternative fuel uptake. ...If no alternative fuels are developed at all, Australia’s fuel self-sufficiency will decline to 35 percent by 2030. 
  • The whole cost of road passenger transport (cents/km) is projected to be fairly stable into the future due to fuel efficiency improvements, alternative fuels and improving technology that act to prevent costs from rising.
  • The cost of road freight travel [sic, transport] is expected to increase in the next decade because there are fewer unrealised fuel efficiency gains available to offset rising oil prices, total road freight costs are more sensitive to fuel price changes and that sector is assumed to pay a carbon price on diesel. 
The paper has failed to recognise the decision of Shell to close and demolish the Clyde Oil Refinery by mid-2013. This refinery meets about 50 per cent of the petroleum needs (petrol and diesel) of New South Wales.

The Department of Resources, Energy and Tourism provides a paper "Alternative Transport Fuels Strategy – Gaseous Fuels, Summary of Fuel Forum 2" with the forlorn and clueless opinion:

A constant theme during the course of the discussions on gaseous vehicles related to the absence of natural gas refuelling infrastructure and the difficulty of investing in this infrastructure without any certainty around the timing and quantum of future demand. Essentially, this demand uncertainty means that investment in natural gas refuelling infrastructure is not able to be justified on commercial grounds given the likely substantial lag between deployment of capital and realisation of income from fuel sales.

Participants pointed to the fact that this dilemma – commonly referred to as the ‘chicken and egg’ scenario – was seriously retarding growth of the market.

This cluelessness on how to introduce new fuels makes a joke of the Department's statement on the role of the Australian Government Strategic Framework: "providing leadership and certainty".

Luckily the Australian Government that replaced leaded-petrol vehicles and infrastructure with unleaded petrol was not so challenged for ideas on how to go about providing leadership and certainty.

Nevertheless, the Department of Resources, Energy and Tourism illustrates the Australian Government still has some capacity for forward-planning. This is demonstrated by the extract shown of the table below. This is from page 2 of a document on its web-site "Paper 2: Summary of current government policies and programs relating to alternative transport fuels in Australia".

Table 1: Alternative fuels excise and excise-equivalent customs duty rates

Fuel type From
1 Dec 2011
1 Jul 2012
1 Jul 2013
1 Jul 2014
1 Jul 2015
(final rate)
CNG c/kg 5.22 10.45 15.67 20.9 26.13


Gerbilnow said...

CNG Infrastructure and Fuel Availability
Availability of CNG and CNG fueling stations across the United States.

See discussion on US CNG Infrastructure

Gerbilnow said...

According to Eric Marsh, Executive Vice-President, Natural Gas Economy & Senior Vice-President, USA Division: “Today, there are more than 12 million natural gas vehicles worldwide but less than 1 percent of them are in North America. The precedent has already been set in Europe where natural gas figures far more prominently as a transportation fuel and the technology for natural gas vehicles is proven, reliable and safe. Other countries have already made the switch. In addition to providing an abundant, affordable alternative to gasoline and diesel, natural gas is also far less emissions-intensive. Quite simply, using natural gas as a transportation fuel results in cleaner air. Natural gas doesn’t contribute significantly to creating smog because it emits 75 to 95 percent less nitrogen dioxide, 99 percent less sulfur dioxide and 90 percent less particulate matter.

Source: Canada: Encana opens new compressed natural gas (CNG) station in Alberta

Askgerbil said...

Royal Dutch Shell is planning to develop a string of liquefied natural gas (LNG) refuelling stations along the Hume Highway between Melbourne and Sydney as part of an effort to sway truck drivers to switch from diesel to what Shell argues is a cheaper, cleaner-burning fuel option, according to The Australian.
Source: Shell to build LNG fuel network