• 1 hour Canadia Ltd. Returns To Sudan For First Time Since Oil Price Crash
  • 3 hours Syrian Rebel Group Takes Over Oil Field From IS
  • 3 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 3 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 3 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 3 days Schlumberger Warns Of Moderating Investment In North America
  • 3 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 3 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 3 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 3 days New Video Game Targets Oil Infrastructure
  • 3 days Shell Restarts Bonny Light Exports
  • 3 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 3 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 4 days British Utility Companies Brace For Major Reforms
  • 4 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 4 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 4 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 4 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 4 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 4 days Rosneft Signs $400M Deal With Kurdistan
  • 4 days Kinder Morgan Warns About Trans Mountain Delays
  • 4 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 5 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 5 days Russia, Saudis Team Up To Boost Fracking Tech
  • 5 days Conflicting News Spurs Doubt On Aramco IPO
  • 5 days Exxon Starts Production At New Refinery In Texas
  • 5 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 6 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 6 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 6 days China To Take 5% Of Rosneft’s Output In New Deal
  • 6 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 6 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 6 days VW Fails To Secure Critical Commodity For EVs
  • 6 days Enbridge Pipeline Expansion Finally Approved
  • 6 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 6 days OPEC Oil Deal Compliance Falls To 86%
  • 7 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 7 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 7 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 7 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
Major Oil Traders See Upside For Oil Prices

Major Oil Traders See Upside For Oil Prices

The world’s oil trading majors…

World Class Copper Auction Draws Major Interest

World Class Copper Auction Draws Major Interest

Peru’s mega Michiquillay copper is…

LNG Locomotives to be Common in the US by 2016

LNG Locomotives to be Common in the US by 2016

In 2011, US railroad companies consumed a little over 3 billion gallons of diesel, nearly 5.5% of the total consumption for the entire country.

Oil is currently much more expensive than natural gas, which thanks to the shale boom, is at record low prices in the US. Switching engines to run on LNG instead of diesel is expected to help operators drastically cut their costs. Yet whilst most energy experts have predicted that LNG will not be ready for widespread consumption across the rail industry for a decade or more, the Railway Age has stated that LNG powered locomotives will be common on US railroads by 2016.

Fuel currently accounts for 30% of operating expenses on major Class 1 railroads in North America, dwarfing all other operating costs. Every three months Burlington Northern Santa Fe (BNSF), the railroad company owned by Warren Buffett, spends over a billion dollars on fuel alone. It is calculated that switching to LNG could help save $200,000 a year per locomotive.

Related article: Azeri Gas Sells Big in Europe

BNSF has begun to experiment with LNG powered locomotives with an idea of switching most of its train fleet to cheaper and cleaner LNG. Railway Age wrote that “test programmes at BNSF and Union Pacific are expected to start in the fourth quarter.”

It is expected that the first trains will use a combined fuel of 80% LNG and 20% diesel, which would require few engine modifications, and allow for the motor to be reverted to full diesel if any problems arose with the LNG supply. The share of LNG could be boosted to 95% mixed with just 5% diesel, but this would require much heavier modification to the engine, and prove much more difficult and expensive to switch back to pure diesel.

It is thought that if the large gap between the price of oil and the price of natural gas continues, then it could allow LNG to capture a significant share of the transport market before the end of the decade.

LNG is already becoming more popular as a fuel source for large horsepower engines, and oilfield operators have begun to use heavy-duty, dual-fuel engines for drilling and pumping operations in order to slash the costs of running a well, and increase profits. Major road transport companies have also begun to prefer LNG trucks rather than the traditional diesel.

By. Charles Kennedy of Oilprice.com



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News