The last decade has been witness to an incredible transformation in the US energy fortune. The combination of hydraulic fracturing and horizontal drilling in upstream operations targeting ultra-low porosity, ultra-low permeability hydrocarbon bearing shale formations has unlocked a bounty of natural gas and crude oil resource. This transformative innovation has literally turned the US energy market on its head. Fewer than ten years ago a number of large capital players were developing liquefied natural gas (LNG) regasification terminals with an eye toward importing large volumes of natural gas to the US from distant locations. Today, there is a prevailing expectation that the US will soon be an exporter of LNG, largely due to the rapid growth in natural gas production from shale that has occurred in the last 8 years (see Figure 1). In fact, US gross natural gas production has risen from an annual average rate of 64.3 billion cubic feet per day (bcfd) in 2005 to 82.7 bcfd in 2013, driven primarily by growth in production from shale from less than 4 bcfd to over 31 bcfd.

The recent emergence of natural gas as an abundant, inexpensive fuel in the United States could prompt a momentous shift in the level of natural gas utilized in the transportation sector. The cost advantage of natural gas vis-à-vis diesel fuel is particularly appealing for vehicles with a high intensity of travel and thus fuel use. Natural gas is already a popular fuel for municipal and fleet vehicles such as transit buses and taxis. In this paper, we investigate the possibility that natural gas could be utilized to provide fuel cost savings, geographic supply diversity and environmental benefits for the heavy-duty trucking sector and whether it can enable a transition to lower carbon transport fuels. We find that a small, cost-effective intervention in markets could support a transition to a commercially sustainable natural gas heavyduty fueling system in the state of California and that this could also advance some of the state’s air quality goals. Our research shows that an initial advanced natural gas fueling system in California could facilitate the expansion to other U.S. states. Such a network would enable a faster transition to renewable natural gas or biogas and waste-to-energy pathways. Stricter efficiency standards for natural gas Class 8 trucks and regulation of methane leakage along the natural gas supply chain would be necessary for natural gas to contribute substantially to California’s climate goals as a trucking fuel. To date, industry has favored less expensive technologies that do not offer the highest level of environmental performance.