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Thread: American Power Group Diesel/NG Conversions, Glider Trucks, etc.

  1. #1

    Default American Power Group Diesel/NG Conversions, Glider Trucks, etc.

    You may enjoy these articles / blog posts. There are two, here:

    http://seekingalpha.com/user/554561/instablog

    Commentary welcome.

    Best,
    Odaat

  2. #2
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    Default Re: American Power Group Diesel/NG Conversions, Glider Trucks, etc.

    Intriguing blog Odaat. I have been following dual-fuel engine systems for large Class 8 trucks and keep wondering why all we see on the road and thru EPA approvals are out of useful life (OUL) systems from APG (Cummins ISX & Detroit Diesel) and Eco-Dual (Cummins ISX only)? Chesapeake's "Peak Fuels" dual-fuel is new engine certified but, as you state in your blog, the word on the street is that this system is rife with problems and that Chesapeake is putting it on the block so as to focus on the CNG-in-a-box refueling station product with General Electric. I have heard that Clean Air Power has EPA approved new engine certification for its dual-fuel (which engine?) but I have not confirmed this yet.

    From a 30,000 ft view, the OUL market seems to be an unsustainable business model. Scavenging up old engines & transmissions to rebuild and place onto new chassis can only go so far in the "glider" approach before this equipment eventually dries up. I believe California / CARB is cracking down on this approach as well since it circumvents CARB's initiatives in getting old diesel engines off the road.

  3. #3

    Default Re: American Power Group Diesel/NG Conversions, Glider Trucks, etc.

    I appreciate your intelligent response. I've had to do some dd, and, bear in mind I am a long investor in APGI. That said, I'm not gullible either. To address each matter:

    Glider Kits: Pretty much a niche market mostly for the second and third tier fleet owners, but a growing one at that. The companies I talked to in my region who run cartage operations of that nature are fed up with the high cost and lower gas mileage of the new emission standards. There are like around 1/3 of a million Detroit Diesel 60 Series engines on the road, still from the days of that engine's popularity in the 90's, and generally were rebuilt with 3 year/300,000 mile warranties by Daimler/Freightliner Dealers and Glider Kit companies alike. In the testing done on those engines, APGI's system reduced carbon-monoxide emissions by 80%, eliminated Non-Methane Hydro Carbons (NMHC), and reduced NOX and PM by 25%-30% compared to the emissions of a rebuilt Series 60 engine. (Those emission reduction percentages are typical of the results they've gotten on other engine families, too.) According to what I have gained from 3rd parties, APGI has been contacted by fleets with older CAT (300,000 on the road) and Cummins engines (200,000 at least still on the road) to convert to dual fuel glider kits. So, I don't know that I can discount the Glider Truck approach, as it's pretty nifty in its niche. The economic benefits of a glider are nothing to shake a stick at. To wit:

    · $20k to $25k lower purchase price than a new diesel truck
    · $60k to $90k lower purchase price than a new dedicated natural gas truck
    · Normal motor oil versus high-temp for natural gas trucks
    · Higher fuel efficiently on the Series 60 engine compared to new SCR engines
    · No diesel exhaust fluid to purchase and deal with.
    · Significantly lower maintenance costs on a Series 60 Engine
    · APG's unit gives a further 20%-30% per year net annual fuel savings and significantly lowers emissions.
    · APA just received EPA approval this week on 37 pre-EGR Detroit Diesel Series 60 engine families primarily for the glider kit market.

    So, I'm known for dd, not math. But on the back of the napkin I have in front of me, I figure if APG could tap even 5% of the 850,000 engines referenced above (about 42,000 engines conservatively), that is an addressable market of $425 million over a multi-year period.


    As to the Outside of Useful Life Market: They are different target engines. The glider market looks toward pre-EGR emission engines from 2002 back through the mid 1990’s. The OUL market is comprised of trucks greater than 435,000 miles, which at 100,000 miles per year, would be model years 2009 and older. This like almost 75 to 80 percent of all of the heavy-duty trucks on the road. What I love about the APG system, and what I think serves as one part of the counterargument regarding ongoing earnings, is that the APG system can be transferred from one model to another for very little cost (like a few thousand dollars) Compared to buying ONE natural gas vehicle, a fleet could convert SIX existing diesel engines. Which would you do as a trucking outfit? Which would return the investment of, say, $180,000, sooner? I know that answer. :-)

    Now, remind you, I got my only C in high school in Algebra II/Trig, but even with a conservative 3%-5% market penetration, there is a $1 BILLION to $1 and a half BILLION dollar addressable market.

    As for the newer or "Inside Useful Life" engines. (On a side note, hey, um, guys, can we all stick together and not let the wives know about the concept of something a little older being no longer useful? lol)

    I see two reasons why you have not seen many IUL approvals. First is financial. Most of this realm is still driven by small companies with limited capital resources, and they could commercialize OUL engines much quicker with a larger addressable market. IUL test are close to a CARB/CERT without the expensive durability tests required of a new OEM engine. IUL EPA testing currently costs 4X to 5X more than the cost of an OUL test. I like APGI because even the most simple view of the EPA approvals list favors them by a wide, if not insurmountable, margin. They have like 208 OUL engine family approvals, which include CAT, Cummins, Detroit Diesel, Mack, Big Mac (that was a joke), Mercedes Benz and Volvo for a wide manufacture date span. They are testing for IUL and seeking approval for Cummins, Detroit Diesel, and Volvo, to pick up the key 2010-2012 SCR technology engines. That will pick up another 15% of the market which is another $250 million dollars of addressable market at a 5%
    market penetration (which, in all of these estimations, I see as conservative, especially when groups with the conversion start winning cartage bids due to their lower fuel costs, and the competitors will be scrambling to stay alive by also getting APGI's conversions.)

    Keep in mind, only 10% of the trucks on the road are less than two years old, meaning, even if APGI doesn't (yet) have approval for like the ISX-15 family, we're talking 10% of the market "missed" - and even those engines will then be eligible for conversion after just two years on the road or so.

    As for California, the situation, like their breathing air, is hazy. The goal of eradicating old diesel engines may make sense in theory but is not a practical goal across the U.S. Many experts project that by 2030 , dedicated natural gas engines will capture 30% of the market. Good for you, Westport and Chesapeake or GE or others. But at, say, 200,000 new trucks per year today, that means that 140,000 new diesel trucks still hit the road every year and when they are two years old, can become a significant perpetual source of conversion opportunities. Further, these companies have to look at the cost/benefit ratio, too, and converting an older engine to one that meets emission requirements AND saves significant amounts of fuel with a speedy ROI time makes most sense. There is also range anxiety / infrastructure concerns and the fact that NG is still a commodity subject to price variation, that going 100% NG presents more risk than a conversion system that optimizes NG use / savings, but allows for instant 100% diesel / biodiesel when required or when preferred.

    Those same arguments are making APG the winner in the stationary market as well, where the combination of the excellent or at least equivalent performance (especially at certain load levels and pressure levels) and the MUCH lower cost of APG's system than, say, of CAT's Dynamic Gas Blend system, are leading to the nod going to APG. We'll start seeing the tangible results of all of that field testing, especially from mining and fracking, in 1Q14.

    It's amaxing what one can learn by just sitting and listening to groups of mining, fracking, and cartage operation employees who are just way too loud and way to forthcoming with trade and material information over morning coffee and donuts. I don't know if that would count as dd or just luck, but I'm long APGI!

    On another note, I hid out in the air ducts above the head offices at CARB, and according to what I heard over the din of the blower motors running, those executives either said " Let's tonight a PG movie and discuss the dramatic emotions we'll perceive" - or they said "Let's invite APG to discuss the dramatic emission results they have achieved." It's the latter. Yes, that's right, my inside source with CARB says they actually LIKE what APG is doing with their system.

    My inside source with a technical college that trains diesel mechanics, and an inside source who is a big wig with the Wheeltime network also say APG is it. Finally, I don't mean to get too far ahead of myself, so I'll just throw out there that I actually have about a 40% firm belief right now, pending some further dd, that the big F itself may be considering, even already testing, APG's technology for a PRODUCTION version dual fuel F series truck. Use all diesel under heavy load / on the farm, then use the dual fuel when it's time to drive to get feed, run to the Farm and Fleet, haul that grain pup in to the elevator, sit idle waiting for the scalehouse, or drive to tho 100 acres you farm 40 miles away; or the contractor who uses it onsite but has to drive to do bids, get supplies, etc. Or maybe the public utility that sends a crew of 4 workers in a crew cab and they need diesel power, but could save a lot by having the commute to the job site save some fuel. A dual fuel F-150, F-250 would make TOTAL sense, and with APGI's clear connections with Ford (e.g. Bob Natkin), I'm serious, I think there maybe something there, but needless to say, finding out anything like that is not gonna happen, or at least not happen without me ending up in the drink with concrete boots. :-)

    If anyone attended that recent horsepower trade show in Chicago, I'm confident they've started doing dd on APGI, if not invested already.

    Best wishes,
    Odaat

  4. #4

    Default Re: American Power Group Diesel/NG Conversions, Glider Trucks, etc.

    An interesting take on things. I am well familiar with both APG and EcoDual, as well as Peake, D2G,, one or two others whose name escapes me, and I also wonder about the OUL market. From what I'm seeing, companies are going out and buying new. When you figure in the cost of a kit plus another $45K for a 700 mile range storage system, why not? Where we are seeing increased quotes for conversions is in the class4-6 markets.

  5. #5

    Default Re: American Power Group Diesel/NG Conversions, Glider Trucks, etc.

    Curious if the OP (original poster) . . . . Odaat . . . can post a current link that works for blog mentioned above?? Currently it says that Odaat has no current instablogs.

    Also, I'd like clarification as I always like the term BLENDED FUEL when you're talking about mixing CNG with diesel on these older big rig trucks. When term "dual fuel" is used, it often is equated to Bi-Fuel meaning that vehicle could run entirely on either fuel (ie exclusively just diesel, or exclusively just CNG). For a blend-fuel big rig, those older OUL trucks would be non-spark diesels so best case scenario might be blend of say 25% diesel / 75% CNG.

    Here are couple good articles about APGI and it does clarify that "dual fuel" really means blended fuel.
    http://finance.yahoo.com/news/americ...130000586.html
    http://www.overdriveonline.com/glider-story/

    At the pickup level, I've seen installs in Oklahoma of OUL diesel pickups where blend-fuel setup is terrific with MORE horsepower, coupled with lower fuel cost since CNG price is very low in Oklahoma.
    Last edited by KSneedsCNG; 11-07-2013 at 03:27 AM.

  6. #6

    Default Re: American Power Group Diesel/NG Conversions, Glider Trucks, etc.

    Quote Originally Posted by natgasman2014 View Post
    An interesting take on things. I am well familiar with both APG and EcoDual, as well as Peake, D2G,, one or two others whose name escapes me, and I also wonder about the OUL market. From what I'm seeing, companies are going out and buying new. When you figure in the cost of a kit plus another $45K for a 700 mile range storage system, why not? Where we are seeing increased quotes for conversions is in the class4-6 markets.
    If you are "well familiar" with APG and Eco-Dual, Peake, etc. then surely you understand where Peake's dual fuel program is at (somewhere between Chesapeake trying, unsuccessfully, to sell it, and dead), and that while Ira Dorfman spent years spouting off on how Eco-Dual's product was superior to APG's, Eco-Dual has gone completely back to the drawing board for a product, which, of course, Ira will also claim is superior. The problem with that idea is that what's happening in the real world is heavily favoring APG's system. It's great to show that injector-invasive or direct high pressure systems can get a higher fuel displacement, but what good is higher displacement if you have a ton of down time due to mechanical failures? And that is what is happening...in the road tests (millions of miles and tens of thousands of hours of stationary application testing), the one system that is easiest to install, is most reliable by a very long shot, and is most cost-effective is APG's fumigation-type system, even after accounting for its lower displacement at some load levels. For example, here is a response from one of the largest LNG cartage operations in the world:

    We, as well as several of our customers, have trialled many and various natural gas engine systems over a period of about 12 years to varying degrees of success. The severe duty cycles of Australian on-highway trucks have seen many systems enter the market and fail; unable to meet the expected performance, reliability and safety levels.

    We have chosen the APG system as the most versatile, robust and reliable. As a fumigation-type system it uses the simplest method for gas induction. And although there are other fumigation-type dual fuel systems on the market with similar hardware, we have found the APG control system to be the most sophisticated. It has comprehensive fail-safe engine protections, “tuneable” fuel mapping (for optimizing engine performance & natural gas substitution), and very fine control of gas induction. The hard part is not getting natural gas into the engine – the hardware required for this is quite simple. The real challenge is being able to precisely control the amount of natural gas being inducted into the engine to ensure the engine responds properly to the driver’s demand for torque / power, and combusts the natural gas safely without causing unwanted ‘knock’ or over fuelling.

    So in a nutshell, I would say we have chosen the APG system because of the simplicity of its hardware and its sophisticated software. We also feel it offers good value in terms of cost Vs performance.


    As for your statement about smaller trucks, the APG system could easily be made to work with them as well, and would be well received in how operator-agnostic they are. However, I don't get the math for that. The annual fuel usage for a Class 4 – Class 6 truck is significantly less than Class 8's. A Class 8 truck traveling 100,000 miles a year at 6 mpg consumes 16,700 gallons of diesel per year.
    - This creates a $17k per year savings at a 25% annual dual fuel savings.

    A Class 4 truck traveling 70,000 to 80,000 miles per year at 14mpg consumes 5,000 to 6,000 gallons per year.
    - A 25% annual dual fuel savings would be $5k to $6k per year making the payback over 3.5 years which I don't see as a strong business argument.

    Installing APG's V5000HD system on a class 8 truck, however, has a return on investment that is rapid and quite attractive. Those orders are already coming in, are ramping up, and The Wheeltime Network is fully set to roll with APG's system.

    That said, you've got Ford coming out with an all NG F-150, and working on some kind of dual-fuel solution for lighter duty vehicles at their Lima, Ohio plant,(I believe), and despite the connections between Bob Natkin, Ford, and APG, it's not APG technology, nor, I think, that of any of the other companies you mentioned. Which kind of leads to the next point that in the end, what's probably eventually wanted in the market is for some OEM engine manufacturers to simply offer their own dual or multi-fuel ready engine themselves. The layout in R&D, support, and more probably means we'll only see that from the very largest of the engine mfgr's, and even at that, it's quite a risk. Sure, NG is cheap now, and abundant, and good for the U.S., but it's still a commodity, subject to price fluctuation, and even with commitments from several entities, including Shell, toward building an NG fueling infrastructure, it's a lot of risk. So, what kind of carriers can't afford huge risk? The very type that have the huge number - the overwhelming majority of engines on U.S. highways, - the OUL engines. They will go with the system that as A) most flexible, B) least expensive C) has the quickest ROI, and D) most reliable

    It is by no means just my opinion, or, frankly, a matter of opinion at all, that APG's system is the only one to meet that set of criteria. Everyone's entitled to their own opinions, but none of us are entitled to our own facts. And that fact is, in head to head, real life trials, for example the major one that happened in Australia, which is a landscape that presents a serious load challenge and work duty for these engines, ONLY the vehicles with APG's system made the run. All off the rest broke down due to problems with their dual fuel system, including those you are "well familiar with."

    I don't mean to sound argumentative, but Odaat is known for doing serious dd long before ever opening my mouth. I've done it, much deeper than I am sharing here, and for this time when dual fuel conversions have their day, APG's V5000HD fumigation-type system is the hands down winner. Cat's DBG is perhaps the best runner up, but still presents a much greater installation and maintenance requirement and cost, and most of all, straight from some mining companies out east, the upfront cost compared to APG's system presents a serious barrier. When you go to do a field test and one system is up and running in a day, and the other requires you to have an additional mechanic and takes four days, and then the less expansive system has no breakdowns but the injector-invasive system does, and you only notice two load levels where the CAT system saved more fuel than the other....you go with the other...and that's what's happening. Congratulations, American Power Group.

    Besides, as we speak, APG has right at about 450 engine family EPA aspprovals...leagues ahead of any competitor. It's not even close. Once the EPA get's over their government shutdown flu, you'll see the update on their site, here: http://www.epa.gov/otaq/consumer/fue...s/altfuels.htm (about 3/4 way down the page)

    Best,
    Odaat

  7. #7

    Default Re: American Power Group Diesel/NG Conversions, Glider Trucks, etc.

    My blog, which was quite detailed, has disappeared from the Seeking Alpa site. I don't know why. It was deleted by them. It's probably some mole at Eco-Dual, lol. More likely, I made an edit and didn't hit the proper "publish" or save button. Sorry about daat. I am working on it, and it will be the same link, and/or I will post it here.

    Indeed, terminology can be confusing. APG's system, by the terms you use, would be a blended fuel, I guess, in that the engine can instantly and seemlessly and without any operator intervention go to 100% diesel, but it is not a system by any means that makes these engines run on only NG. It enriches the air coming in with a brilliant and sophisticated software-driven mix for the perfect ratio of NG, which then by default the engine itself calls for less diesel fuel.

    I’m not sure how familiar you are with the various technologies, but basically there are three main operating principles for dual fuel systems:

    1. Fumigation – Pre-turbocharger gas induction (without control of turbocharger speed / charge air pressure). Possible to achieve ~75% peak substitution at optimum speed and load, but will average ~40-60% under typical on-highway conditions. This type of engine can revert to 100% diesel at any time. The APG system fits into this category, and is its clear leader, if not only real viable option out there, actually.

    2. Multi / Single Point Gas Injection – Post turbocharger gas injection with turbocharger waste-gate control (charge air pressure control) and usually with master diesel fuel injection control on common rail engines. Achieves 75-80% natural gas substitution on vehicular engines and up to ~99% on large bore medium speed engines. This type of engine can revert to 100% diesel at any time. The Clean Air Power dual fuel system fits in this category for vehicular engines while Cummins, Caterpillar, MaK, Wärtsilä and others offer similar dual fuel systems for larger engines.

    3. High Pressure Direct Injection – Gas is injected directly into the combustion chamber. This allows for 95-99% natural gas substitution and practically eliminates ‘knock’. This type of engine cannot revert to 100% diesel operation as the specially modified dual-needle fuel injector has limited capacity for diesel injection. Currently there is only one HPDI vehicular engine produced by Westport and it is now only offered for the Australian market. Wärtsilä also manufactures a large bore medium speed engine using direct gas injection.

    Best,
    Odaat

  8. #8

    Default Re: American Power Group Diesel/NG Conversions, Glider Trucks, etc.

    Quote Originally Posted by natgasman2014 View Post
    An interesting take on things. I am well familiar with both APG and EcoDual, as well as Peake, D2G,, one or two others whose name escapes me, and I also wonder about the OUL market. From what I'm seeing, companies are going out and buying new. When you figure in the cost of a kit plus another $45K for a 700 mile range storage system, why not? Where we are seeing increased quotes for conversions is in the class4-6 markets.
    Apparently someone who I would argue knows much more about the trucking industry than you and I combined, disagrees with your assessment. I speak of Mr. Jack Roberts, Executive Director of CCJ and Overdrive, who was not exactly a cheerleader for dual fuel by any means....until now...until being wow'ed by American Power Group's dual fuel glider. He did a two-day test ride and visit, hosted by Smith Power, Blu LNG, Ervin, and a Wheeltime Network member. Just like is happening with customers like Evol LNG and various cartages and fleets, he walked away positive indeed, likes what he saw and drove, and has gone from doubter not just to believer, but to advocate, in regard to both APG's superior V5000HD dual-fuel solution, the strength of what Wheeltime adds for installation and support, and the compelling financials of APG's dual fuel glider program. That's not just my overlyoptimistic long opinion. His tweets from the experience are worth reading...overwhelmingly positive, with the best one, I think, in supportl, being:

    “I had a great natural gas glider test drive yesterday and am convinced they are a great option for fleets looking to get in the alt fuel game,”


    His tweets continued positive from there, and are ongoing.

    Then he also made a video, and there are others (the first is him in the glider, the second has to do with LNG and refueling, and the 3rd is from the a Wheeltime Network leader.) See them here:

    http://www.ccjdigital.com/video-log-...gas-glider-kit

    I'd look to see him do write ups in the magazines.

    Anyway, sure, it's a niche market. But it's also the ideal "toes to test the water" entry for customers into the nat gas realm.

  9. #9

    Default Re: American Power Group Diesel/NG Conversions, Glider Trucks, etc.

    My Seeking Alpha Instablog is now revised, and active, here: http://seekingalpha.com/author/odaat/instablog

    Also, there will be an actual SA article / newswire/Yahoo! Finance article tomorrow around 9 am.

    Sorry for the delay.

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