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New contract between Cummins, Monarch Beverage marks change in attitude among operators

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WHEN Monarch Beverage, the state’s largest beer and wine distributor, announced this month it would switch its trucking fleet from diesel to natural gas engines, Cummins rejoiced.

The contract marked a change in attitude among trucking operators: Until then, natural gas engines had proven 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.

“We’re starting to see small-to-medium-sized fleets in the heartland ... start to embrace natural gas,” said Roe East, general manager of on-highway natural gas engines for Cummins.

That’s good for Cummins because its market share for on-highway natural gas-powered vehicles exceeds 90 percent.

Monarch Beverage announced Dec. 5 that by the end of 2015, about 90 of its 105 trucks would be powered by Vancouver-based Cummins Westport.

Though the engines from the 50-50 Cummins joint venture are produced in New York and North Carolina, engineering and support functions rest in Columbus.

“All that design and development work is done here at the tech center,” East said.

About 75 people in Columbus work exclusively on on-highway natural gas engines.

Fred Dufour, Monarch’s senior vice president of operations, said the company is making the switch because it is forecasting higher diesel prices over the next few years as demand increases in India and China.

Meanwhile, abundant domestic natural gas reserves and new excavation methods have cut prices 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.

Dufour that Monarch estimates it will recover the higher cost of the trucks after about 200,000 miles, or just more than 2.5 years.

Monarch, based in Indianapolis, employs 600 people and typically drives its trucks for nearly 70,000 miles per year to reach its 1,100 customers across the state. The company usually keeps trucks for 10 years.

The natural gas vehicles are fueled from a temporary compressed natural gas station on Monarch property, which will be replaced with a permanent station by March.

Dufour said the new trucks also will reduce soot emissions by more than 50 percent and output of some greenhouse gases between 50 percent and 90 percent. Even better, he said, the new trucks will lower carbon dioxide emissions by 20 percent. The new fleet is projected to cut carbon dioxide emissions by 1,500 tons per year.

Dufour said the 8.9-liter Cummins CNG engines the company tested were innovative, efficient and dependable.

Monarch now has 14 trucks powered by the 8.9-liter. 325-horsepower engines, and one with the new 400-horsepower, 12-liter ISX12G.

Cummins also announced in March that it will begin producing a 15-liter natural gas engine in 2014, to be used in long-haul trucks.

East said that although the market for on-highway natural gas engines is small, about 5,000 engines sold annually, it has been growing at 20 percent to 30 percent for each of the last 10 years.

And while Cummins has to compete in the diesel market with other engine makers, it is dominating the natural gas market.

East said as long as natural gas prices remain much lower than diesel prices, the market will continue to grow.

An American Trucking Association natural gas summit last week in Washington, D.C., drew 800 people, mostly truck fleet executives, East said.

And, East said, early next year at least one more Indiana company, Fair Oaks Farms, will power its milk delivery trucks by natural gas — and it will be getting its fuel from a really natural source: cow manure.

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