Posted on 03/20/2012 5:18:57 AM PDT by thackney
Now that we know we can successfully produce gas from U.S. shale gas plays, the question remains: What do we do with all this supply?
Price differentials between the low U.S. natural gas prices versus diesel, gasoline and propane are providing incentives for fuel-switching in other demand areas aside from the electric power and industrial sectors, and the abundance of U.S. natural gas has prompted some oil and gas companies to find new ways to use gas.
The U.S. trucking sector offers the greatest opportunity for gas to substitute transportation fuels. Prior to the economic downturn, approximately 65 billion gallons a year were consumed by diesel vehicles; two thirds of the vehicle segment is comprised of large semi tractor trailers, said David Schultz, vice president of fuels at Pivotal LNG, a subsidiary of Atlanta-based AGL Resources. Through Pivotal, AGL is positioning itself using its existing gas liquefaction capacity to capture the growing market opportunities for switching to gas from other fuel options.
Liquefied natural gas (LNG) is a viable, economic and environmentally beneficial substitute for heavy duty truck and competes attractively with propane. Propane prices, which track oil prices, have risen along with crude, giving LNG a competitive cost advantage. Opportunities for fuel switching to natural gas will likely continue as U.S. gas prices and crude oil prices trade at a widespread, as demand for crude oil is enormous worldwide, and the amount of U.S. gas that can't participate in the international gas market is enormous, said Schultz.
LNG, which is a denser energy source than compressed natural gas (CNG), works best for heavy duty fleet vehicles, while CNG makes more sense for lighter vehicles such as personal cars or garbage trucks that require less energy density.
After trucking, the drilling rig sector is the second largest potential market for fuel swapping, with approximately 1 billion gallons of diesel consumed a year. Pivotal is selling LNG to EnCana to power rigs drilling in Louisiana's Haynesville shale play.
EnCana also has utilized gas-powered drilling rigs owned by Calgary-based rig provider Ensign Energy Services to drill at its Jonah field in Wyoming's Green River basin. The company, which owns 350 rigs worldwide, has a fleet of 16 rigs that can be powered by LNG or wellhead gas.
The company, which drilled the first well with a gas-powered rig in 2007, has received numerous calls from operators and producers interested in utilizing the rigs, said Will Matthews, vice president of marketing at Ensign.
"We see it as a three-legged stool of benefits. It saves operators a lot of money, it's significantly better for the environment and it utilizes a fuel that's domestically produced," Matthews said.
Beyond vehicles, rigs and marine vessels, new markets that represent new gas demand continue to emerge. In Minnesota, one company switched from using propane to dry corn to natural gas. In less than one corn drying season, they were able to pay off the dryers.
According to a 2010 IHS CERA report, Fueling North America's Energy Future, as much as 36 Bcf/d of gas would be required to displace transportation fuels if all North American light duty vehicles were converted to gas. If all diesel trucks converted to gas, 13 Bcf/d of gas would be required, or 6 Bcf/d if only heavy duty vehicles switched. An estimated 0.5 Bcf/d of gas would be needed to displace transportation fuels if all diesel buses switched to gas.
America's Natural Gas Alliance (ANGA) has touted the use of natural gas vehicles in the U.S. as a means of weaning U.S. dependence on foreign energy imports while creating jobs in the U.S. The organization said natural gas vehicles outperform conventional vehicles with a significantly higher octane rating, and provide better fuel efficiency and lower operating costs while reducing emissions. –
According to ANGA press materials, gas vehicles run 25 percent cleaner than vehicles powered by gas or diesel, and can help curb U.S. carbon dioxide emissions, of which transportation accounts for 30 percent. Gas-powered vehicles also can reduce smog-producing nitrous oxide pollutants by up to 95 percent.
Growing the infrastructure to support natural gas as a transportation fuel will be critical to growing the fleet of gas-powered vehicles on U.S. roads. Some efforts have been made to increase the usage of natural gas in transportation, such as natural gas corridor highways and fueling stations in California, Utah and Texas. Public bus fleets in cities such as Los Angeles, Boston, Dallas and Washington D.C. also have been converted to gas-powered buses.
Growing widespread use of gas in this sector is a chicken and egg situation, said IHS CERA Director of Global Gas and LNG Rafael McDonald.
"Why build a retail fueling station when you have no trucks on the road, and why would you buy a gas powered truck if you have nowhere to refill it?" McDonald questioned.
To lock down demand, cooperative efforts for gas consumption in the transportation sector likely will continue. One example of these efforts is Chesapeake Energy and GE's March 7 announcement of an alliance to promote the use of natural gas as a fuel for cars and trucks.
ANGA reports that 112,000 gas vehicles are on the U.S. roads today, and about 1,000 gas fueling stations in existence, mostly of which are concentrated in New York and California. Globally, more than 12 million gas vehicles are in use, according to the American Gas Association website.
McDonald said IHS CERA is even more optimistic on marine bunkers for gas demand in the transportation sector, particularly heavy duty marine bunkers, which use even more fuel than the trucks.
The ability of marine bunkers to burn LNG is critical in emission control areas in parts of the world where emissions of sulphur and nitrous oxides must be controlled, such as Northwest Europe, the Baltic Sea area and the U.S. East Coast; similar rules are expected to be adopted in the Caribbean and Mediterranean regions.
Farther out at sea, polluting fuels can be used, but some are deciding it's easier to go with a straight LNG ship. Scrubbers, which are used to curb emissions from power plants, also can be used on vessels to reduce emissions.
Shell's Efforts to Find Markets for Gas
Global efforts to develop the gas value chain are also underway. Royal Dutch Shell CEO Peter Voser told attendees at the IHS CERAWeek conference earlier this month that the company is working hard to find ways to use abundant gas supplies.
The use of liquefied natural gas (LNG) as a transportation fuel holds tremendous promise as a cleaner transportation fuel.
"As an alternative to diesel, it's a smart way to reduce emissions of sulphur-oxides and particulates," Voser said.
Shell is looking at using LNG as a marine fuel in Singapore and the port of Rotterdam, The Netherlands. The company also is preparing to make LNG available this year to fleet operators along the busy truck route from Calgary to Edmonton, Voser said.
The company will also install a small-scale gas-liquefaction plant in Alberta and dispense LNG at Shell/Flying J truck stops throughout western Canada.
"Drawing on the region's natural gas to produce to LNG, we believe fleets on this route could see a reduction in greenhouse gas emissions of up to 20 percent on a well-to-wheels basis," Voser commented.
Additionally, Shell is investigating ways to use LNG as a transport fuel in the rail and mining sectors, as well as in oil and gas drilling, Voser noted, adding that gas can provide "a cleaner source of electricity than coal for the world's growing fleet of electric vehicles, which would further reduce many countries' need to import oil."
Gas-to-liquids technology, in which gas is transformed into higher value liquid fuels and chemicals, is another area in which Shell is expanding the value chain for gas. In 2011, Shell opened the Pearl GTL plant in Qatar, the world's largest GTL plant. Pearl produces GTL gasoil, a clean-burning diesel-type automotive fuel, GTL kerosene that can be used for jet fuel, and a variety of chemical feedstocks for lubricants, detergents and petrochemicals.
"We think GTL technology could make a lot of sense in North America," said Voser. "It would further reduce the need for imported oil while deriving greater value from this region's natural gas resources."
I suspect you mean either CNG or LPG, not LNG.
LNG required constant refrigeration down to -260°F or it constantly will boil off requiring venting (or keeping the engine running).
but it may be too volitile for urban or suburban areas
LNG or CNG is just natural gas, methane. LNG tends to be more pure methane because of they cryogenic freezing to make it liquid.
LPG is propane used for the BBQ.
Have the govts(state and federal) figured out a way to tax natural gas as a transportation fuel ?
This might be the road block. IF huge amounts of the public switch to this fuel, the govts. lose a big revenue stream.
Are there laws in place to tax this on the state and federal level ?
If you can fill your automobile at your house or place of work , how does the govt. tax you on it ?
That is the very first transportation app I would expect cheap natural gas to fill. Just convert to CNG, which is practical for local operations because you can simply switch the engine from gasoline to NG, which has a good octane rating, and the only real penalty is the space/weight of the Compressed Natural Gas tank. It makes far mor immeciatee sense than any other application.One transportation app for LNG conspicuously got no mention - railroads. That is another very natural app, even more so than the long-haul trucks. Diesel-electric locomotives could very easily run on NG, because diesel engines can use it directly so long as you don’t make the fuel-air mixture rich enough to auto ignite. You just use a pilot charge of diesel oil to trigger ignition. A thermodynamically very efficient use of fuel, especially desirable when gas is so relatively cheap.
Use of LNG to fuel ships also sounds like a winner.
Link?
Clean Energy (T. Boone Pickens) is building over 100 LNG stations to put the claim on the that market.
http://www.cleanenergyfuels.com/pdf/CE-OS.ANGH.012412.pdf
The first phase includes 150 fueling stations with approximately 70 anticipated to be open in 33 states by the end of 2012 and the balance in 2013.
Make fertilizer........we can harvest the energy later.........
Isn’t one of the byproducts of burning natural gas water vapor, a so called greenhouse gas?
Yes, Shell is using them in Qatar and another location.
The process economically competes at locations where the essential market is making LNG to ship to another location.
It doesn’t compete economically in a market where the natural gas can be used without an LNG conversion cost.
Construction of the world’s largest gas to liquids (GTL) plant, Pearl GTL in Qatar, is a major step towards meeting the world’s growing demand for cleaner energy.
http://www.shell.com.qa/home/content/qat/products_services/pearl/
It’s funny that there is no leftist jihad against things that produce water vapor when nearly ALL of the atmospheric greenhouse gas effect comes from water vapor.
Of course, you can’t tax water... yet.
Yes, it needs insulated tanks that will keep it from getting warm before it's used. In a dual-fuel vehicle (like UPS's LNG trucks), you fill up with not more than the amount of LNG you expect to use in the next few hours, and then when it's done you use gasoline/diesel. With commercial vehicles, you have a good idea of how much fuel you will use that day, and can fill up accordingly.
Only for a defined time, before you have to vent or use. Insulation is not refrigeration. The heat is flowing in, but at a reduced rate.
What is done with Vehicle tanks is that tank is also built to contain a build up of pressure as the boil off occurs within the tank.
It will continue and build in pressure. In the US and Canada, vehicle LNG tanks must be able to contain the vapor build up of pressure for 5 days. Past that point, it is going to vent; either into a recovery system or into the atmosphere via a safety pressure valve.
What is Boil-off?
http://www.unece.org/fileadmin/DAM/trans/doc/2011/wp29grpe/LNG_TF-02-06e.pdf
See page 2 of 5
Want to really screw things up? Shell, BP and other oil companies should produce their own vehicles that runs on LNG and then add capabilities to their gas stations.
Become self contained.
Boy would that piss off Government Motors.
CNG is a far better fuel for residential vehicles over LNG.
Same fuel source, natural gas. Less expensive to create, no need to vent fuel over time without use.
LNG is a better choice for commercial type use, running most of the day, on nearly every day. It has better range/volume and dealing with the cryogenic temperatures (-260°F) is not for the casual user.
Interesting they made claims $1.50 or $1.60 per gallon five years ago and don’t seem to have done anything with it since.
Natural gas would make an ideal clean motor fuel for city and school buses, delivery vehicles and business fleets. Why not give some incentives for developing these alternatives which use existing technology instead of pouring taxpayer dollars down green rat holes like the electric cars, algae and ethanol?
#3 Is the correct answer ;-)
“Have the govts(state and federal) figured out a way to tax natural gas as a transportation fuel ?”
As it is TODAY I could fill up at the one station which allows private vehicles so the mechanism is in place at the pump just only one pump.
For those who installed a NG compressor at home you should have to pay a tax and that could/should be based upon miles driven. It could be verified each year when the car must under go it’s yearly safety inspection. At that time a check of the odometer & taxes paid could be compared to see if they are reasonably related.
GM To Launch Natural Gas-powered Pickup Trucks
(RTTNews.com) - Automaker General Motors Co. (GM) said Monday it plans to launch natural gas-powered pickup trucks in April to be sold in the U.S. and Canada. The trucks will have the option to run both on gasoline and compressed natural gas, ‘seamlessly’ transitioning between the two fuels.
The Detroit, Michigan-based company currently plans two bi-fuel truck models: the 2013 Chevrolet Silverado and 2013 GMC Sierra 2500 heavy-duty extended cab pickups. The trucks are projected to save the owners thousands of dollars in fuel costs over three years.
“The bi-fuel Chevy Silverado and GMC Sierra provide customers with choices in advanced propulsion technology, and because CNG (compressed natural gas) is a clean-burning, domestically produced fuel, it has wide appeal,” said Ed Peper, general manager, GM Fleet and Commercial Operations.
Booking for the models will begin in April for fleet owners and retail consumers, with deliveries expected to begin late this year. The models will offer a range of more than 650 miles, and will be available in standard and long box, with either two- or four-wheel drive, GM said.
GM is offering three-year, 36,000-mile new vehicle limited warranty and five-year, 100,000-mile limited powertrain warranty and vehicle emissions warranty.
According to reports, Chrysler is also expected to announce Tuesday an alternative fuel-based Ram truck to be built at its Saltillo, Mexico-based plant that will travel 255 miles on CNG before automatically switching to an 8-gallon gas tank.
Rising gasoline prices have triggered demand for CNG-powered vehicles or alternative fuel vehicles. The initiative by automakers to use alternative fuel is also gaining the U.S. government’s support.
http://www.nasdaq.com/article/gm-to-launch-natural-gas-powered-pickup-trucks-20120306-00013
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