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Jon LeSage

Jon LeSage

Jon LeSage is a California-based journalist covering clean vehicles, alternative energy, and economic and regulatory trends shaping the automotive, transportation, and mobility sectors.

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Is Boone Pickens Wrong On Natural Gas?

NatGas

Bloomberg is attempting to make the case that Tesla’s CEO Elon Musk and cheap gasoline prices have driven natural gas away as an economically viable vehicle fuel. But that does not seem to be the case if you look at the role compressed natural gas (CNG) and liquefied natural gas (LNG) has been playing on a global level.

Pickens is cited in the article for making the business case for natural gas vehicles going back to 2008 with the oil price spike and skyrocketing pump prices of gasoline and diesel. His arguments focused on the cheaper, stable price of natural gas and how it allowed the U.S. to free itself of oil imports, especially from OPEC.

As co-founder of the nation’s largest natural gas vehicle fueling infrastructure company, Clean Energy Fuels Corp., Pickens saw his company reach market valuation in 2012 of about $1.8 billion. The Bloomberg piece points to Clean Energy Fuels stock plummeting 90 percent since that peak as another sign that the alternative fuel is on a downturn.

Even if gasoline and diesel prices stay stable for a few years, and if Tesla and other electric vehicles see significant sales increases during that time, natural gas is expected to continue doing well for companies working in that sector.

Andrew Littlefair, CEO at Clean Energy Fuels, conceded that natural gas vehicles aren’t heading for widespread consumer adoption. However, for fleets, it is much different.

Dallas Area Rapid Transit, which has 660 vehicles in its fleet powered by natural gas, has extended its operation and maintenance contract with Clean Energy Fuels. A few cities around the country have also decided to work with the company.

Major corporate fleets such as Ryder System Inc., AT&T, and UPS, have brought in thousands of CNG-powered trucks and vans to their fleets, along with several fueling stations. Related: Natural Gas Prices Poised To Rise As Exports Boom

Honda decided to get out of the natural gas-powered passenger car business when it stopped production of the Honda Civic NGV in 2015. However, NGVs are expected to see growth in Europe as Volkswagen has launched a natural gas version of one of its sedans and may launch other NGVs. Government officials in Europe are putting pressure on VW and other automakers to find a cleaner burning fuel. NGVs find support for their drastic reduction in tailpipe emissions and sizable reduction in greenhouse gas emissions.

Fleet operators choosing NGVs will calculate the emissions reductions but are sometimes even more impressed with the stability the fuel offers. Fuel price volatility from petroleum, which ran rampant from 2008 through about 2013, convinced them to invest in a more stable fuel price and infrastructure, which helped companies in the NGV sector.

Fleets are also fascinated with the development in California and a few other states of renewable natural gas, which is receiving generous government subsidies backing the new fuel. Energy is being extracted from landfills and other sustainable, renewable sources to supply existing natural gas fueling stations with the clean fuel.

Another sign that natural gas is taking off as a viable energy source for transportation comes from exports of LNG. The U.S. will become a net exporter of natural gas on an average annual basis by 2018, according to the recently released Annual Energy Outlook 2017 from the U.S. Energy Information Administration. Related: How Much Fuel Does It Take To Get To The Moon?

“The transition to net exporter is driven by declining pipeline imports, growing pipeline exports, and increasing exports of liquefied natural gas (LNG),” the study says.

Natural gas has been a transportation fuel sold in high volumes in several countries around the world for many years. Italy turned to natural gas vehicles and fueling infrastructure after World War 2, as the oil supply became tight and the alternative fuel became a necessary option to tap into.

By Jon LeSage for Oilprice.com

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  • Anon on August 19 2017 said:
    At the rate battery technology is improving, CNG's use case is shrinking. Buses & delivery are going electric & really benefit from regen braking, so it looks to me like CNG will be competing most directly with diesel: long-distance trucking, maybe agriculture.
    Ideal CNG uses: locomotives, harbor tugs. Larger shipping is already shifting to LNG.
  • Michael DiCroce on August 20 2017 said:
    I couldn't agree more. All of the articles that were published lately are a PR attempt to discredit the natural gas transportation movement which is reaching critical mass. With the release of the Cummins Westport Low Nox engine, the heavy duty trucking market now has a super clean, comparably priced solution to diesel. As more stations come online the move to domestic gas is almost unstoppable. All the talk about battery operated trucks is just noise. If that was the future, cummins' engineers would have started working on that years ago. They're not, which tells you a lot about the only viable options for moving tons of freight at a profit: diesel and natural gas.
  • moron on August 20 2017 said:
    And where do EVs recharge? Electricity from natural gas.
  • Edju on August 21 2017 said:
    CNG as a motor fuel.
    I'm a retired plumbing contractor from Milwaukee WI. Around 1972, the time of the 1st Arab oil embargo, I entered into a deal with WI. Natural Gas Co. to convert my fleet of service trucks to dual fuel. I dreaded the thought of not being able to provide the necessary 24 hour emergency services that my Company, Blau Plumbing Inc. provided to Milwaukee and suburbs. The intent was to fuel the trucks overnight from a "cascade" of 30 high pressure containers (bottles) to a PSI of around 3600 PSI. I had great co-op and assistance from the Gas Co. I also had speaking engagements on the subject, which was about our experience using compressed Natural gas (CNG) for out fleet.

    Initially, it worked quite well. The trucks could run 35 to 55 miles on a couple of bottles fastened under the truck. The engines started well in any kind of temperature. If a truck's dry gas (we called it that) fuel gauge became very low, the driver could switch back to gasoline on the fly, finish his service calls and make it back to our shop and hook up his truck to the high pressure refueling hose located in each truck’s designated parking spot.

    These large step vans all had the heavy duty 454 GM engines and at first, it seemed like a dream come true. Never more an interruption of our 24 hour emergency PHC services, so we thought. We had an endless supply of "gas" for our trucks. However, unusual problems began to set in. Under a load, the engines began burning up exhaust valves. Exhaust manifolds turned orange-yellow hot under an uphill load and that resulted in exhaust manifold cracking.

    After 4 or 5 years, the 25 Hp. Electric motor driven compressor began to pump inefficiently, barley able to reach optimum operating pressure. The 30 bottle cascade required a mandatory "static test" of all bottles to certify that they could safely be used after so many fill-deflate cycles. The pair of "bottles" installed under each of the 18 trucks, also had to be removed for static testing.

    The estimated cost to overhaul the compressor, static test all the compressor cascade bottles and the labor cost to remove the bottles from the underside of each truck, ship them out for static testing and reinstall them offset the fuel cost per mile savings of the previous years of our participation in this CNG experiment. At the time this experiment came to its dismal end, WI. Natural Gas was, I believe, equally dismayed. The experiment ended. So why am I writing this? Because I am seeing the resurrection of Natural Gas as a motor fuel. It is real easy for individuals and businesses to go for the Natural Gas motor fuel idea. At first glance, it looks like the solution to our motor fuel problems. But T. Boone, take it from one who has been there and done that, a user has to know the hidden costs down the road, literally. Natural Gas may be a boon to you, T. Boone but from what I experienced, I would suggest you not put your stamp of approval on CNG without first polling individuals, businesses and fleet operators who use Natural Gas as a motor fuel for 5 or more years WITHOUT the monetary support or co-op of a Natural Gas utility. Same goes for public transportation.

    Public fueling stations are essential, so as to do away with the cost of privately operating and maintaining a compressor and power hungry drive motor for a special compressor. "Bottles" have to be installed somewhere, usually in the trunk, so you loose trunk space. Smaller the trunk, smaller the bottles. Static testing, how often and at what cost? Engine exhaust valves, manifolds, how affected by the hotter dry gas combustion flame? In cold climates, the condensate byproduct of CNG is very corrosive so as a consequence, the exhaust system will rot away must faster than gasoline or diesel.

    Natural Gas has been used as a motor fuel for many decades. One must ask:
    If it's such a dream come true, why is CNG not in broad use everywhere, especially since '72, when there were block long lines at the gasoline stations for 5 gallons of fuel. Been there and done that to. So, that's my story. Ed Blau

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