Here's a truly super opportunity for stimulus

[opebo]

According to this article:Analysis: Thrifty truckers wary of pricey natural gas vehicles

There's a great opportunity here for the government to make no-interest long-term loans and a guaranteed buy-back on these vehicles to replace the nation's diesel fleet with natural gas powered trucks. 

Care would need to be taken, however, not to damage diesel truck makers who aren't quite yet ready with the new technology - so large subsidies would be in order on that end as well (as long as said makers continue to accept full, strong unionization of all their plants and suppliers).

[Indy Texas]

That doesn't address the fact that we don't have the pipeline and retail infrastructure to support widespread adoption of LNG.

If diesel truck makers who "aren't quite yet ready" are damaged by a shift to LNG, so much the better for the truck makers who were ready. Or are companies whose management fails to innovate also victims of capitalist oppression?

[opebo]

If diesel truck makers who "aren't quite yet ready" are damaged by a shift to LNG, so much the better for the truck makers who were ready. Or are companies whose management fails to innovate also victims of capitalist oppression?

No, no, you are assuming a lot of nonsense about 'the market' etc.  Things aren't so simple.  After all, if we accelerate the adoption of a new technology through government action - which can't easily be predicted - we must also compensate for the damage that such acceleration does to 'companies'.

[Franknburger]

If diesel truck makers who "aren't quite yet ready" are damaged by a shift to LNG, so much the better for the truck makers who were ready. Or are companies whose management fails to innovate also victims of capitalist oppression?

No, no, you are assuming a lot of nonsense about 'the market' etc.  Things aren't so simple.  After all, if we accelerate the adoption of a new technology through government action - which can't easily be predicted - we must also compensate for the damage that such acceleration does to 'companies'.

But the market - in this case the truck companies' customers - is already acting.

I have done quite some research on innovation in various countries. Next to grain farmers, the transport sector always came out as the most conservative, least innovation-prone sector - as it does here again. Asides from the fact that I am not particularly fond of rewarding such conservatism with public grants, you have to be careful how to dose public intervention in order to not create additional distortions. Structural change takes time and efforts on various levels - here it is not only truck companies, but also truck manufactures, natural gas suppliers, fuel stations, probably also manufacturers of gas filling equipment,  that need to adapt. If you are only targeting one element in the chain, you risk ineffectiveness due to bottlenecks on other levels (e.g. gas pipelines).

The wise thing to do (if it is not already done) is for the government to organise dialogue between all sectors involved, in order for a common vision on the kind, depth and intensity of required change to evolve. This could remove uncertainties on all levels (truckers not knowing whether the gas filling infrastructure will be built up, gas companies not knowing whether demand will justify investment, etc.). In addition, government may find out that the regulatory environment needs adaptation (e.g. fire protection standards). Once that has been done, and there are still market failures that prevent the change (e.g. problems in access to finance for smaller truck operators), further, targeted government action may be discussed. Even then, you may come up with more effective and less costly solutions (e.g. leasing schemes offered by truck manufacturers) than the subsidy scheme you propose.

In any case, I don't think anybody (neither "we" not the government) must compensate companies for their inability to timely identify and adapt to structural change. There are much more worthwhile and deserving targets of government intervention, e.g. single mothers, or children from low-income families that cannot afford college.

[opebo]

If diesel truck makers who "aren't quite yet ready" are damaged by a shift to LNG, so much the better for the truck makers who were ready. Or are companies whose management fails to innovate also victims of capitalist oppression?

No, no, you are assuming a lot of nonsense about 'the market' etc.  Things aren't so simple.  After all, if we accelerate the adoption of a new technology through government action - which can't easily be predicted - we must also compensate for the damage that such acceleration does to 'companies'.

But the market - in this case the truck companies' customers - is already acting.

No, that's just a PR gimmick.  It isn't any kind of reliable causation.

...you have to be careful how to dose public intervention in order to not create additional distortions. Structural change takes time and efforts on various levels - here it is not only truck companies, but also truck manufactures, natural gas suppliers, fuel stations, probably also manufacturers of gas filling equipment,  that need to adapt. If you are only targeting one element in the chain, you risk ineffectiveness due to bottlenecks on other levels (e.g. gas pipelines).

In any case, I don't think anybody (neither "we" not the government) must compensate companies for their inability to timely identify and adapt to structural change. There are much more worthwhile and deserving targets of government intervention, e.g. single mothers, or children from low-income families that cannot afford college.

I'm all for spending on poors, and children and all that stuff.. heck I'd be for complete socialization of the industry frankburger (after all the purpose of all such policies is precisely to create distortions - 'distortions of the market' are not bad), but the point is that if you are going to bring about structural change by sudden government policy you have to provide for all factors which might be effected - either those who need to provide part of the infrastructure, or those who might be harmed by the changed. 

You wrote a nice paragraph above detailing ways that might be done (things which I didn't bother to list in my original post, or to repost from your post here, since after all they are obvious to anyone), but you seem to forget that the closure of truck-building companies could be quite harmful and in any case quite unnecessary with just a bit of care and subsidy.

[DINGO Joe]

What is the benefit of NG trucking that you are pursuing?

Is it the lower cost of NG vs diesel?  The "savings" going to whom?

Is it energy independence as NG is North American produced and we still import oil from a variety of places, mainly friendly?


The NG drilling boom has dropped the price of NG considerably as well as the price of it's main competitor--coal.  These savings have in fact worked their way to the consumer in lower utility bills (though not as low as one might hope).  There has also been an increase in industrial projects trying to take advantage of low NG.

Would a sudden increase in NG demand for transportation increase the price of NG and thus increase utility prices, probably, to what degree is unknown as there is a probability that supply could grow at a certain price point.  

As far as energy independence while the NG boom has been impressive, the shale oil/tar sands boom hasn't been far behind.  As some point in 2015, North America won't be able to absorb all the oil it produces and thus somebody will have to start exporting the excess.

As an added twist, both shale oil and tar sands aren't the best type of oil for producing diesel, which happens to be the most profitable type of fuel for refineries to produce, so don't be surprise if US refiners keep buying oil from the Middle East while producers try their luck selling oil elsewhere.

Wait,  there is more, there is actually a law that says the Us can't export unrefined oil without permission from the Commerce department (which has granted oil to be exported to Canada which ultimately comes back to the US as a finished product).  Will the US change it's law, will Canada export oil thru the Keystone XL (which I think is highly probable)?

More, More, More....The US has approved one LNG export facility and several others are moving through the process, what will that do the NG prices.  Can North American oil production actually cause global prices to come down, it's possible if China's demand curve starts to flatten which it just might.

My conclusion.  I'm pretty agnostic on the whole thing.  While I think NG is great for fleet vehicles (garbage trucks, buses, taxis, etc...) it's a more mixed bag for long haul trucking.  

I really don't think it would be a huge stimulus to the economy, more of a winners and losers type thing.

[opebo]

dingojoe you've pretty much sold me - based on a kind of motorhead skepticism.

Certainly that utter waste of time and resources - gasohol - suggests we should be skeptical of these fuel-innovations.

Here in Thailand many vehicles run on gas (LPG, CNG, etc) rather than petrol, both cars and buses, and I can report that the mechanics and drivers all say - it causes a lot of problems and costs in terms of engine wear and breakdowns compared to the old-fashioned fuel.