The International Energy Agency (IEA) released its latest Medium-Term Gas Market Report in St. Petersburg, Russia last month. Although the IEA sees the growth of gas in the power sector slowing, they also cite its emergence as "a significant transportation fuel." What really caught my eye was their projection that gas over the next five years would have "a bigger impact on oil demand than biofuels and electric cars combined," in light of the US shale gas revolution and tougher pollution rules in China.That's quite an assertion, considering oil's longstanding dominance in transportation energy. As I noted in March, Italy, Pakistan and several other countries already have well-established demand for compressed natural gas (CNG) for passenger cars. Despite these hot spots only 3% of gas is currently used in transportation, globally, based on analysis from Citigroup. The IEA is forecasting that transportation growth will consume 10% of the projected global gas production increase of roughly 20 trillion cubic feet (TCF) per year by 2018. That's 2 TCF per year of additional natural gas demand in the transport sector, equivalent to 1 million barrels per day of diesel fuel.
I'd be more skeptical about that figure if I hadn't seen a presentation from Dr. Michael Gallagher of Westport Innovations at the Energy Information Administration's annual energy conference in Washington, DC last Monday. Westport specializes in natural gas engine technology for heavy-duty trucks and played a major role in implementing the LNG vision of the ports of Los Angeles and Long Beach, CA a few years ago.
Dr. Gallagher made a strong case for gas in heavy-duty trucking, starting with the low cost of US natural gas compared to oil and its products. Initial growth rates in several segments look encouraging, including transit buses and new trash trucks, for which natural gas now has around half the market. Growth in China has apparently been even faster, with LNG vehicles increasing at over 100% per year (from a small base) and natural gas refueling stations growing at 33% per year since 2003.
Tuesday, 30 July 2013
Could Natural Gas Fuel a Trucking Revolution ?
Sunday, 21 July 2013
A New Debate Emerges: LNG or CNG for Long Haul Transport
Amidst the constant discussion of plentiful domestic natural gas and its use as a transportation fuel, an unusual technological and philosophical debate has emerged. Those familiar with the industry know that until recently, fleet managers considering the conversion from gasoline or diesel to natural gas had basically two options: compressed natural gas (CNG) was the choice for any return-to-base, short mileage vehicles, and liquefied natural gas (LNG) was the option for long-haul on-highway Class 8 trucks, also known as tractor trailers or semis. The reasoning behind this was relatively straightforward, and more or less a product of a few issues inherent to gaseous rather than liquid fuel (energy density, tank storage capacity, re-fueling time). However, due to a variety of innovations, a paradigm shift may be under way.In comparing alternative fuels to gasoline or diesel, a major consideration is the relative energy density and associated cost, weight and size of on-board fuel storage. For natural gas, when compressed, its energy density is only about a quarter that of diesel, and when liquefied just 60% of the energy density of diesel. Therefore, either option requires greater fuel storage capacity to achieve a comparable range, which means more and/or larger tanks.
Compared to CNG, LNG contains 2.4 times more energy per diesel gallon equivalent (DGE). Moreover, since LNG, like diesel and gasoline, is a liquid, one could achieve comparable refueling speed, whereas the level of compression required to “fast-fill” with CNG is very high (~3,600 psi). As a result, for the long-haul trucking sector, the energy density and associated cost(s), weight and on-board storage capacity of LNG have long been viewed as the more attractive, viable option.
Relatively recent advances in tank storage capacity and “fast fill” refueling technology have allowed room for debate as to whether LNG really is the only natural gas option for the long-haul trucking industry. To best highlight the philosophical nature of this emerging debate, it may be best to look at two of the leading natural gas refueling infrastructure providers, Clean Energy Fuels (CLNE) and Trillium CNG (TEG subsidiary), each of which has taken an opposing view on this topic.
Clean Energy was the first mover in the industry and is now by far the largest provider of natural gas refueling infrastructure in the US. They are betting big on the fact that CNG is the choice for local urban fleets (refuse vehicles, delivery trucks, etc.) but that LNG is the option for long-haul tractor-trailers. Alternatively, Trillium CNG, along with their partners at AMP Americas, a Chicago-based investment firm, strongly believe that CNG should be the choice for all heavy-duty fleets, regardless of distance traveled or route. Without commenting on which approach is better, the following will help to explain each company’s thought process.
CNG and LNG are both proven forms of natural gas storage, with distinct advantages over diesel and gasoline when used as a transportation fuel. To produce CNG, natural gas is taken directly out of the United States' expansive network of natural gas pipelines, whereas LNG must be cryogenically liquefied to -260 degrees F (to become a liquid) and often must travel via ground transportation (tanker truck) to stations across the US. With pipeline access, LNG can alternately be produced from the gas grid through MMLS (movable modular liquefaction system) units. On-site, CNG is compressed immediately and enters a truck in a process that is almost identical to traditional fueling practices, from the driver’s perspective. On the other hand, LNG requires drivers to wear a mask and gloves to protect themselves against cryogenic burns.
For the Class 8 truck sector, Trillium/AMP have made the decision to build CNG stations because, in their words, “it is a cheap, simple and safe way to transport and store natural gas.” They have also found that the additional simplicity of CNG over LNG makes it an easier product to maintain, as well as a less expensive product to produce. For example, according to their general pricing model and marketing materials, on average, “end users of CNG gain a $.48 advantage over LNG, for a product that works equally well, has less associated hazards and a greater built-in infrastructure across the US.”
Alternatively, Clean Energy has invested heavily in LNG infrastructure, including two liquefaction facilities, to supply their network of 150 existing refueling stations and more in the works that they refer to as America’s Natural Gas Highway. While the production and transport of LNG require greater technical expertise and significantly more capital than for CNG, LNG cost savings are realized on refueling infrastructure/operation. This is primarily a result of the high electricity demand/cost required to achieve the compression necessary for a “fast-fill” CNG station. There is also greater flexibility in where a station can be located (no need for natural gas pipeline access) and in future expansion of existing stations.
