Westport Innovations is a developer of technologies that allow vehicles to operate on clean-burning fuels such as natural gas, hydrogen and hydrogen-enriched natural gas (HCNG). From its origin as a spinoff from a research program in the department of mechanical engineering at the University of British Columbia, Westport has grown into the world's leading provider of environmentally friendly engines for heavy-duty vehicles such as trucks and buses.
In 2001, Westport formed a global strategic partnership with Cummins to build and distribute natural gas and propane engines worldwide. Cummins Westport customers now have more than 5,000 vehicles in service in cities such as Washington, Boston, Los Angeles, Beijing, Cairo, Paris and Moscow.
David Demers is the founder of Westport and has been chief executive officer of the company since it was formed in March, 1995. He started his career at IBM Canada in 1978, holding several positions in marketing and management there before leaving to form a consulting company providing management services to early-stage technology companies.
He has a bachelor of physics degree and a bachelor of laws degree, both from the University of Saskatchewan. He is married and has two children.
Vaughan: We're starting to get smog alerts now in Southern Ontario. What would it mean to air quality around here if we could actually clean up the dirty emissions from diesel engines?
Demers: I don't live in Toronto but I travel there a lot and the smog problem seems more evident than 10 years ago.
While it's not as bad as Los Angeles, I suspect the situation in Toronto parallels it. The South Coast Air Quality Management District, which is responsible for air quality regulation in the Los Angeles area, reports that 70 per cent of overall risk associated with toxic air contaminants is attributed to diesel particulates, primarily from heavy-duty trucks.
Along Highway 401 west of Toronto is a known problem area. Almost 40,000 heavy-duty diesel trucks travel up and down that highway every day.
Our economy is more dependent than ever on trucks to move goods around, and there are more of them on the road now than ever before. By switching to natural gas with our engines, we could cut emissions of nitrogen oxides per vehicle in half and particulate emissions by up to 90 per cent even compared to modern, cleaner diesel engines.
Compared to an average, older truck we would have even more impact. And greenhouse gases could be cut by up to 25 per cent.
Vaughan: But why is it necessary to convert diesels to natural gas? Can't a new generation of diesel engines control the pollution problems without taking on the additional problems of driving around with huge tanks of highly explosive natural gas?
Demers: I'll come back to "clean diesel" but I have to start by protesting the assumptions in the last part of your question. Natural gas is actually an extremely safe fuel; safer than propane or gasoline.
This is why it's used in home heating -- even in a "low-tech" home environment, it takes a rare combination of negligence and bad luck to get an explosion. The LNG (liquefied natural gas) tanks on our trucks have been tested in crashes, have been in fires, even had bullets fired through them -- and the LNG doesn't "explode."
It's not even under pressure, so if a tank is somehow ruptured, the fuel simply dissipates into the air. Of course, like any fuel, LNG has to be treated with respect, but it's not an unusually dangerous fuel.
NGVs -- natural gas vehicles -- are in use around the world and have an excellent safety record. There are close to two million on the road today. There are rigorous codes and standards for all components used on vehicles, and their installation.
As for "huge tanks" -- we only need about 50 per cent more volume of LNG to have the same energy as diesel fuel, so it's unlikely you'd be able to tell the difference just by looking at the truck. There's typically room on the side rails for slightly longer tanks.
On the main point: of course, diesel engines can (and will) be cleaned up. This is being driven by tough international regulation. But this is going to be expensive equipment, operating costs and fuel consumption will rise, and this doesn't do anything for oil security or climate change.
We believe that our natural gas products will be cheaper overall than "clean diesel" products by 2010. Natural gas is attractive to countries and customers concerned about oil supply and climate change (for which there's no good wide-scale solution except a switch to natural gas) and the environmental benefits are clear.
And if you believe we are headed for the hydrogen economy, natural gas is a logical first step. We can share a lot of the same infrastructure and equipment and help hydrogen vehicles emerge more quickly.
Vaughan: I've driven around in a big 18-wheeler running on your natural gas technology in the Vancouver area. But when are we going to see some on the smoggy, truck-choked 401?
Demers: The first five "next generation" Westport HPDI (high pressure direct injection) demonstration trucks have just been delivered to Challenger Motor Freight of Cambridge, Ont. You will see them on the road in May, we expect. Look for the "clean air corridor" design on the truck cab.
Vaughan: You and your partner Cummins Diesel have made a big push into China. What's your experience there and can you actually make money in that market?
Demers: We are making money in China today, and we hope to make more in the future.
China's growth plans are spectacularly ambitious. Their two biggest challenges are oil supply security (given the rapid growth in vehicles on the road) and the environment (particularly urban air quality and pollution from vehicles). They are therefore encouraging natural gas vehicles.
We have worked hard to demonstrate that natural gas is a practical and cost-effective solution for China. For example, in January Prime Minister Paul Martin visited the Beijing public transit system where we have more than 2,500 engines in operation. We think China shows great promise for quick adoption of natural gas as a major transportation fuel. We hope to be a big part of that transition.
Vaughan: I have no problems with Cummins, but what if my fleet runs on Caterpillar or Detroit diesels? Aren't you limiting yourself by partnering up so closely with one manufacturer?
Demers: Cummins have been a great partner for us -- patient, helpful and committed to the long-term vision of environmental products.
We think they make great engines and we're proud to be associated with them around the world through our joint venture, Cummins Westport.
That said, we are working today with other partners, including Isuzu, Ford, BMW and MAN, and we intend to work with other companies to address the expectations of our customers. It's a big industry.
HPDI has been tailored to operate on Cummins' flagship truck engines, but it can be adapted to any diesel engine, from small passenger cars to large off-road engines.
Michael Vaughan Live is on at 6 to 7 p.m. Monday to Friday on Report on Business Television.
