A Cummins joint venture focusing on natural gas engines has landed two big orders from transit fleets on the West Coast.
LA Metro wants to add 550 natural gas buses to its fleet in 2014 and might add 350 more buses in 2016, Cummins Westport Inc. said in a news release. CWI, based in Vancouver, is a 50-50 joint venture between Cummins Inc. and Westport Innovations.
LA Metro runs more than 1,500 natural gas buses with CWI engines.
“LA Metro is dedicated to being 100 percent natural gas, and CWI is a valued partner in that,” John Drayton, manager for vehicle technology, said in the release.
According to its website, LA Metro has just more than 2,200 total buses, 183 bus routes, nearly 16,000 stops and about 1 million passengers per weekday.
The San Diego Metropolitan Transit System had announced in December that it will buy up to 468 natural gas buses over the next four years.
All buses will be powered by the 8.9-liter Cummins Westport ISL G engine.
The success of the Cummins joint venture is benefiting employees in Columbus, where about 75 people work exclusively on on-highway natural gas engines.
Cummins is banking on natural gas-powered engines taking an ever greater share of the diesel market.
Abundant domestic natural gas reserves and new excavation methods have cut energy costs in half in the past few years, and trucking fleet owners are crunching the numbers and finding that the lower fuel costs quickly are offsetting the initial higher cost of natural gas-powered trucks.
Although the market for on-highway natural gas engines is small, with about 5,000 engines sold annually, it has been growing at 20 percent to 30 percent for each of the past 10 years, according to Cummins.
The growth in that market benefits Cummins more than its competitors, because Cummins’ market share for on-highway, natural gas-powered vehicles exceeds 90 percent.
“Natural gas engines are likely to be a key part of the Cummins business moving forward as the infrastructure catches up with the technology and as more modes of transportation look for alternative fuels,” Jon Mills, director of external communications, said via email.
Craig Kessler, president and chief investment officer of Columbus-based Kessler Investment Group, said he has high hopes for Cummins in the natural gas engine market.
“The prospect of growth in the natural gas segment, I think, is the most exciting thing about the future of Cummins,” he said.
Kessler said that down the road he expects that people will look at Cummins as a natural gas engine maker as much as a diesel engine maker.
The Columbus-based industrial equipment maker announced about a year ago that it will begin producing a 15-liter natural gas engine in 2014, to be used in long-haul trucks.
The company also landed an important customer in December, when Monarch Beverage, the state’s largest beer and wine distributor, announced that it would switch its trucking fleet from diesel to natural gas engines.
The contract marked a change in attitude among trucking operators: Until then, natural gas engines had proved popular mostly with municipal transit fleets on the coasts, which had bought the natural gas vehicles primarily for environmental reasons.
Monarch, however, is a company in the Midwest and it is switching to natural gas to protect the environment and save money.