Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Drillers dropping diesel for cheaper natural gas
Reuters ^ | u Apr 12, 2012 | Anna Driver

Posted on 04/12/2012 5:13:15 AM PDT by 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...

(Excerpt) Read more at reuters.com ...


TOPICS: News/Current Events
KEYWORDS: energy; naturalgas

1 posted on 04/12/2012 5:13:22 AM PDT by thackney
[ Post Reply | Private Reply | View Replies]

In 2010:

Encana’s drilling rigs to run entirely on natural gas. After successfully testing the LNG storage and vaporization system the units were readied for operation in the Haynesville Shale Play covering vast amounts of Northern Louisiana. The design of the system was a successful collaboration between Prometheus, Ensign and Encana. The project enabled Encana to realize an estimated $1,000 per day fuel savings versus a drilling rig burning diesel, while also reducing NOx and PM emissions by as much as 25%.

http://www.prometheusenergy.com/solutions/producers/documents/EncanaCaseStudy.pdf


2 posted on 04/12/2012 5:18:43 AM PDT by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 1 | View Replies]

To: thackney

“The project enabled Encana to realize an estimated $1,000 per day fuel savings versus a drilling rig burning diesel, while also reducing NOx and PM emissions by as much as 25%.”

Wonderful, now you did it. The minute Obama finds out he will regulate it out of existence.


3 posted on 04/12/2012 5:25:30 AM PDT by EQAndyBuzz (Solyent Pink is Sheeple!!!!)
[ Post Reply | Private Reply | To 2 | View Replies]

To: thackney

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?


4 posted on 04/12/2012 5:29:03 AM PDT by ngat
[ Post Reply | Private Reply | To 2 | View Replies]

To: thackney

There will be even more savings when manufacturers produce equipment and engines that run on LNG, rather than users having to take a diesel engine and apply a separately purchased conversion kit.


5 posted on 04/12/2012 5:33:21 AM PDT by PapaBear3625 (In a time of universal deceit, telling the truth is a revolutionary act. - George Orwell)
[ Post Reply | Private Reply | To 1 | View Replies]

To: PapaBear3625

I’ve long said that the wealth of natural gas under Michigan could have an enormous industrial benefit in the form of cheap energy even with the unions and high taxes.

Unfortunately our power companies are going green in an effort to soak up tax breaks and subsidies for themselves and driving prices even higher.

Personally I would sell the natural gas to industrial parks at wholesale prices and let them generate their own power completely independent of other private consumers. They could even sell the excess electricity to local communities.


6 posted on 04/12/2012 6:36:49 AM PDT by cripplecreek (What does it profit a man if he gains the whole world but loses his soul?)
[ Post Reply | Private Reply | To 5 | View Replies]

To: ngat
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?

Turn it into methanol and make it easier to handle. NG you need a reinforced fuel tank so anything smaller than an SUV is going to take a performance penalty due to the weight of the tank. Convert the car to flex fuel (could be done for $100-$500 per car) and you can burn methanol, ethanol or good old fashioned gasoline. You have to burn twice as much methanol as gasoline, but if it is less than half the price it is still a good deal. You use whatever is cheaper. And you don't need any new infrastructure.

Sometimes options are better than plans.
7 posted on 04/12/2012 6:38:16 AM PDT by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
[ Post Reply | Private Reply | To 4 | View Replies]

To: ngat
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?

This is a topic in which I am highly interested. I have researched conversions for several years. A "legal" conversion, (i.e. one using an EPA certified system and installer) can cost $12,000.00 for a car. That is simply too excessive to make it practical.

There are kits that people can buy on Ebay to do conversions, and these kits run around $500.00, and they do not include the CNG fuel tank, which must be bought separately. CNG fuel tanks cost from $200.00 used, up to several thousand for new. (Depending on size, of course)

The main problem with getting CNG popularized is the high cost of conversion, and the general absence of CNG filling stations. I am currently working on both problems for my area. I am installing my own CNG filling station on my property, and I am going to convert all my own vehicles over to natural gas.

I intend to sell my compressed natural gas for $1.00 per gallon. Hopefully other enterprenuers will follow suit, and CNG can be expanded to take over transportation from gasoline and diesel.

If we could convert our transportation fuels from an oil based system, we could tell those D@mned Arabs to go to H3ll and we would therefore stop supplying them with money which allows them to try and kill us. It is in the best interest of our country to do this, and I am doing my part.

8 posted on 04/12/2012 6:38:53 AM PDT by DiogenesLamp (Partus Sequitur Patrem)
[ Post Reply | Private Reply | To 4 | View Replies]

To: GonzoGOP
Turn it into methanol and make it easier to handle. NG you need a reinforced fuel tank so anything smaller than an SUV is going to take a performance penalty due to the weight of the tank. Convert the car to flex fuel (could be done for $100-$500 per car) and you can burn methanol, ethanol or good old fashioned gasoline. You have to burn twice as much methanol as gasoline, but if it is less than half the price it is still a good deal. You use whatever is cheaper. And you don't need any new infrastructure.

Do you know of a means to produce methanol as cheaply as natural gas? As far as the tanks go, you can get them in different sizes and different weights, it all depends on how much you are willing to spend. The Cheaper tanks are heavier, and the expensive tanks are lighter, but even the heavier tanks are not a significant burden for a normal automobile, and not a burden at all for heavier trucks or tractor trailer rigs.

Bear in mind, that CNG vehicles burn either CNG *OR* gasoline. At $1.00 per gallon, you can see that it is worthwhile to use CNG as often as possible, but being able to also use gasoline makes it less of a concern if CNG stations aren't as readily available.

9 posted on 04/12/2012 6:45:52 AM PDT by DiogenesLamp (Partus Sequitur Patrem)
[ Post Reply | Private Reply | To 7 | View Replies]

To: cripplecreek
Personally I would sell the natural gas to industrial parks at wholesale prices and let them generate their own power completely independent of other private consumers. They could even sell the excess electricity to local communities.

I used to sell systems to do just that.

10 posted on 04/12/2012 6:48:36 AM PDT by Mind-numbed Robot
[ Post Reply | Private Reply | To 6 | View Replies]

To: thackney

Encana has a nice filling station CNG right next to the red river in Coushatta. Encana and Shell has just about shut down the drilling in the Haynesville shale because of the low prices and dry gas.


11 posted on 04/12/2012 6:51:21 AM PDT by wild74
[ Post Reply | Private Reply | To 2 | View Replies]

To: thackney

Encana has a nice filling station CNG right next to the red river in Coushatta. Encana and Shell has just about shut down the drilling in the Haynesville shale because of the low prices and dry gas.


12 posted on 04/12/2012 6:51:37 AM PDT by wild74
[ Post Reply | Private Reply | To 2 | View Replies]

To: thackney

Wait wait wait, this is confusing! This article seems to imply that if we drill more, it drives prices down? But that can’t be because Obama said that drilling for more oil wouldn’t drive oil prices down!

/sarcasm


13 posted on 04/12/2012 6:58:31 AM PDT by Marko413
[ Post Reply | Private Reply | To 1 | View Replies]

To: thackney

I have enjoyed several interviews of Boone Pickens by Cavuto.

Pickens strongly pushes LNG for fueling , especially of our big rig fleet. He says that if the big rigs were converted, the pressure on supply would evaporate and prices would come down.

He is a plain and outspoken man who seems to tell it like it is. One winders if he is not involved in the transition noted. It would be application of using the thoughts at home before pressing others to make the change.


14 posted on 04/12/2012 7:06:24 AM PDT by bert (K.E. N.P. +12 ..... Crucifixion is coming)
[ Post Reply | Private Reply | To 1 | View Replies]

To: bert
Keep in mind Pickens already controls the largest Nat Gas vehicle fueling company in the US.

I am not saying he is wrong in this, but his company will grow fantastically if the US subsidizes or otherwise mandates this system.

I see what Pickens is doing as more than mere advertising to the free market.

15 posted on 04/12/2012 7:16:31 AM PDT by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 14 | View Replies]

To: ngat
T. Boone may not be our pick politically, but he's right about promoting NG as the best motor fuel to decrease the quantity of oil we consume and need to import from muslim’s that prefer freedom and America dead.

What most people never realize is that methane (Natural Gas) is a renewable resource. It can be produced (by the anaerobic microbes) in 30 days in sewer plants and landfills from almost any organic waste.

Additionally, most never know that there is likely an unlimited supply of NG in hydrolyzed methane in most oceans just waiting to be unlocked.

16 posted on 04/12/2012 7:27:43 AM PDT by X-spurt (Its time for ON YOUR FEET or on your knees)
[ Post Reply | Private Reply | To 4 | View Replies]

To: bert
One winders if he is not involved in the transition noted

T Boone is a huge player in the natural gas market, so he has a vested interest in pushing it. Still makes a lot of sense, but to me it makes more sense to use it for generating electricity.

It would take a long time and a lot of money to build an LNG/CNG infrastructure to support fueling over the road vehicles. Makes sense for service vehicle fleets, but not over the road.

17 posted on 04/12/2012 7:27:43 AM PDT by 6ppc (It's torch and pitchfork time)
[ Post Reply | Private Reply | To 14 | View Replies]

To: DiogenesLamp
Do you know of a means to produce methanol as cheaply as natural gas?

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

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.

If the price of natural gas does go up you can use ethanol or gasoline instead of methanol. The ability to rapidly and effortlessly switch between three fuels will force the price down to that of the cheapest alternative.

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.

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.
18 posted on 04/12/2012 7:42:20 AM PDT by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
[ Post Reply | Private Reply | To 9 | View Replies]

To: GonzoGOP
The conversions are cheap, and even cheaper if put in at the factory.

Just as a side note, in the case of Fords with electronic fuel injection the cars can be converted to flex fuel with a software upgrade alone. The fuel lines and seals are already flex fuel compatible.
19 posted on 04/12/2012 7:48:22 AM PDT by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
[ Post Reply | Private Reply | To 18 | View Replies]

To: GonzoGOP

“Sometimes options are better than plans.”

Yes, but that is completely antithetical to the way the world works now. In a world where government controls everything, plans are better than options.

By the way, are the flex-fuel vehicles of the last few years capable of using methanol as well as E-85 without modification? 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?


20 posted on 04/12/2012 8:45:05 AM PDT by ngat
[ Post Reply | Private Reply | To 7 | View Replies]

To: GonzoGOP
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.

21 posted on 04/12/2012 8:49:10 AM PDT by DiogenesLamp (Partus Sequitur Patrem)
[ Post Reply | Private Reply | To 18 | View Replies]

To: ngat
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.

22 posted on 04/12/2012 8:49:10 AM PDT by BfloGuy (The final outcome of the credit expansion is general impoverishment.)
[ Post Reply | Private Reply | To 4 | View Replies]

To: ngat

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


23 posted on 04/12/2012 8:55:06 AM PDT by Pining_4_TX ( The state is the great fiction by which everybody seeks to live at the expense of everybody else. ~)
[ Post Reply | Private Reply | To 4 | View Replies]

To: ngat
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.
24 posted on 04/12/2012 8:59:05 AM PDT by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
[ Post Reply | Private Reply | To 20 | View Replies]

To: DiogenesLamp
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.
25 posted on 04/12/2012 9:12:50 AM PDT by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
[ Post Reply | Private Reply | To 21 | View Replies]




Click the Pic

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


Donate monthly to help abolish FReepathons
Sponsors will donate $10 for each new monthly sign-up

26 posted on 04/12/2012 9:19:46 AM PDT by TheOldLady (FReepmail me to get ON or OFF the ZOT LIGHTNING ping list)
[ Post Reply | Private Reply | View Replies]

To: GonzoGOP
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.)

27 posted on 04/12/2012 9:47:12 AM PDT by DiogenesLamp (Partus Sequitur Patrem)
[ Post Reply | Private Reply | To 25 | View Replies]

To: GonzoGOP; DiogenesLamp
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

28 posted on 04/12/2012 10:33:51 AM PDT by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 25 | View Replies]

To: thackney
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.
29 posted on 04/12/2012 11:09:04 AM PDT by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
[ Post Reply | Private Reply | To 28 | View Replies]

To: GonzoGOP

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.


30 posted on 04/12/2012 11:40:32 AM PDT by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 29 | View Replies]

To: thackney
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.
31 posted on 04/12/2012 11:49:50 AM PDT by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
[ Post Reply | Private Reply | To 30 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson