Drillers dropping diesel for cheaper natural gas

Reuters ^ | u Apr 12, 2012 | Anna Driver

[thackney]

North American oil and gas companies are trying to take the sting out of low natural gas prices by using it instead of costlier diesel fuel to drive their drilling rigs.

Oilfield technology such as horizontal drilling and hydraulic fracturing have unlocked record supplies of natural gas in North America, pushing prices to a 10-year low and cutting profits. The oversupply has prompted gas producers to actively promote the fuel as a low-cost, cleaner burning means of fueling vehicles and other equipment.

Apache Corp, the largest U.S. company focused solely on oil and gas exploration and production, is in the process of converting its first rig to run on power generated by liquefied natural gas (LNG). Canada's Encana Corp's already has 15 of its more than 40 rigs driven by gas, and plans to convert even more.

"What we need to do is increase the amount of natural gas demand in this country," Steve Farris, chief executive of Apache, said in a recent i n terview in New Orleans. "From an economic standpoint, it's a no brainer."

Two years worth of fuel savings can cover the cost of conversion, according to Encana.

U.S. natural gas producers including Chesapeake Energy Corp and Apache have long touted compressed natural gas as a fuel for truck and vehicle fleets. Now, more energy companies are looking to natural gas as a means of powering their drilling rigs.

"We've seen interest just kind of explode in the last six to eight months," said Ron Bertasi, chief executive officer of Prometheus Energy Group Inc, which provides LNG and services to energy companies to run drilling rigs.

So far Prometheus, owned by Cargill Inc backed-Black River Asset Management and Royal Dutch Shell's technology fund, service about 10 rigs that have been converted to run on natural gas...

[DiogenesLamp]

Since natural gas is the feed stock for methanol obviously no. But the current spot price for methanol is only 1.34 a gal.

That is because of the current demand. Would it stay low if demand were significantly increased?

The big economy is not in the fuel but in the cost of conversion. You need no new infrastructure for Methanol. The conversions are cheap, and even cheaper if put in at the factory. Current supply and delivery systems for gasoline will work just as well for methanol. Room temperature liquids are just easier to handle than a gas. Even an fairly easy to handle gas like methane.

It occurs to me that if this idea is so easy, why isn't it going anywhere? Where can I buy liquid Methanol for $1.34/ gallon. (And is it cost per liquid gallon, or energy equivalent gallon?)

A flex fuel car can burn gas without having to lug around the extra fuel tank. For a methane burner to be able to switch between fuels you need both a gasoline and a methane tank. That just adds mass as one of the two tanks is always dead weight.

If the idea is viable, it has obvious benefits. I just keep thinking that if it is viable, it's a no brainer, so why hasn't it been widely proposed. Why is there no "Pickens Plan" for Methanol?

As a final advantage the ability to rapidly switch between fuels is a strategic advantage. For the prepper it is nice to know that in the case of a fuel disruption caused by Iran or Saudi Arabia, or just rioting here in the US, you can use whatever fuel you can get your hands on. Most high school chemistry students can brew up ethanol in a pinch. Methanol is a bit harder, but not beyond the ability of a garage mechanic.

Well, i'm committed to my current activity regarding natural gas, but if methanol is really a viable alternative, then I will certainly be interested in using it. My thinking is that we need to do whatever it takes to remove monetary power from the middle east by virtue of their control over so much oil energy.

We need to bankrupt those b@stards and make them irrelevant, i.e. the way they were for most of their History.

[BfloGuy]

So, what’s taking so long for somebody to jump on T. Boone Pickens for saying natural gas’ best use is as a motor fuel?

Oh, there's nothing wrong with that statement, it's just that he wanted the government to give him a few hundred billion in "incentives" to do it.

[Pining_4_TX]

Nah, I’ll jump on Boone for wanting to use taxpayer money to subsidize his business ventures.

[GonzoGOP]

I mean, could I take my E-85 flex-fuel SUV over to the dragstrip, fill up with some methanol racing fuel, put it in the tank, and just drive off?

For the newer cars that use exhaust gas monitoring the hardware is ready to go. In the one case I saw an extensive write up on a 2007 Chevy Cobalt was run on 100% methanol by replacing the fuel-pump seal made of Viton, which is not methanol compatible, with one made of Buna-N, which is. Cost of about 41 cents. To get the benefit of the extra horsepower available from the methanol the owner also advanced the timing. Note that the Cobalt was not a flex fuel vehicle to start with so you may not even have to do that much.

[GonzoGOP]

That is because of the current demand. Would it stay low if demand were significantly increased?

Methanol production costs increase by a factor of 1.6 when you double the size of the plant. So assuming the cost of methane doesn't go up you the price will actually go down with a ramp up.

As for why it isn't more popular is that it doesn't have a natural lobbying group. Ethanol has the farmers. Gasoline has the Saudis. Natural gas has T Boon. Each group wants to lock you into their fuel. But the advantage of a flex fuel vehicle is exactly that it doesn't lock you in. It also doesn't require a big government bureaucracy so the Democrats aren't interested.

[TheOldLady]

Click the Pic

That reminds me!
Free Republic could use a fill-up too

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[DiogenesLamp]

As for why it isn't more popular is that it doesn't have a natural lobbying group. Ethanol has the farmers. Gasoline has the Saudis. Natural gas has T Boon. Each group wants to lock you into their fuel. But the advantage of a flex fuel vehicle is exactly that it doesn't lock you in. It also doesn't require a big government bureaucracy so the Democrats aren't interested.

Show me how to make it from natural gas and i'll start making it myself. Do you have an information on the process used to convert it? With modern fuel injection systems, it is mostly a function of software to use a liquid fuel with a different energy density. There may also be an issue with additives and what if any may be necessary to burn methanol in an ordinary engine.

Methanol doesn't need a lobbying group, it just needs someone to do it. (If it is viable.)

[thackney]

As for why it isn't more popular

Not to mention its high level of toxicity and ability to be absorbed through the skin or breathing the fumes. Short term exposure effects include blindness and death.

http://www.inchem.org/documents/icsc/icsc/eics0057.htm

http://emedicine.medscape.com/article/1174890-overview

[GonzoGOP]

Not to mention its high level of toxicity and ability to be absorbed through the skin or breathing the fumes.

I wouldn't advise drinking, bathing in or inhaling the fumes of gasoline either, but we manage to use that as a fuel. In fact methanol is less toxic than gasoline. So to follow your argument we need to get rid of all those dangerous gas stations.

METHANOL VS. GASOLINE—CONTRAST AND COMPARISON"

Speaking of gas stations in event of a fire methanol or ethanol can be put out with water. Also in event of a fuel spill they dilute rapidly in water and break down by UV from sunlight. An Exxon Valdez with methanol would be no big deal as the alcohol would rapidly be diluted by the ocean. With ethanol it would be even less so.

[thackney]

In fact methanol is less toxic than gasoline.

I understand that to be false. Also methanol has significant skin absorption issues compared to gasoline.

MSDS sheets shows the exposure limit for methanol to 200~260 ppm and 300~500 ppm for gasoline.

http://www.midi-inc.com/pdf/MSDS_Methanol.pdf

http://www.valero.com/V_MSDS/002%20-%20UNLEADED%20GASOLINE.pdf

You can put out a methanol fire with water, but you cannot see the fire to know it is even burning until it spreads to something else. It is very difficult to find and extinguish a fire you cannot see. If the methanol fire is not contained, water will spread it without it being seen.

[GonzoGOP]

You can put out a methanol fire with water, but you cannot see the fire to know it is even burning until it spreads to something else.

Only true for 100% methanol. However it is normally sold as M85 which contains 15% gasoline and hence burns with a very visible yellow flame.