UPS putting $50M on more natural gas

UPS will spend $50 million to build nine new liquefied natural gas refueling stations over the next year, including one in Houston, the company said this week.

The decision adds to previous plans to build four stations by the end of next year, meaning that the shipping company will now build 13 new LNG refueling stations by the end of 2014.

UPS also plans to buy 1,000 LNG-powered tractors to move its loads of boxes and packaged goods, the company said.

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The decision comes as corporate fleets increasingly look to natural gas as a way to cut their fuel costs and reduce carbon emissions. Diesel, the primary fuel used to power high-horsepower engines, can be more than $1 more expensive than a comparable quantity of natural gas.

A gallon of diesel in Houston was selling Thursday for about $3.68, according to AAA. The price for a gallon-equivalent of compressed natural gas, which is cheaper than liquefied natural gas, was selling in Houston for as low as $1.67 on Thursday, according to CNGNow.com.

With UPS hoping to power its vehicles over 1 billion miles using alternative fuels by the end of next year, natural gas could provide huge savings.

“The natural gas industry needs companies to commit to using natural gas to help establish a reliable alternative to traditional fuel, and that is just what UPS is doing,” UPS Chief Operating Officer David Abney said in a statement. “The UPS strategy is both environmentally friendly and economically viable. LNG is becoming more readily available, plus it’s more insulated from market volatilities than diesel fuel.”

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The company’s new stations will be located in Florida, Illinois, Indiana, Mississippi, Missouri, Ohio, Pennsylvania and Texas, UPS said in a press release.

UPS says it operates one of the largest alternative fuel and advanced technology fleets in the shipping industry, with 2,700 vehicles. Some of those vehicles run on electricity, hybrid-electric systems, CNG, LNG, liquid propane gas or biomethane.


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