Turning to natural gas here at home

I spent my weekend in Houston and came across an article in the Houston Chronicle that I found interesting:  “Pickens expects approval of key natural gas plan”.   It is no secret that T. Boone Pickens is concerned with our nation’s dependency on foreign oil and the tremendous transfer of wealth that results from our purchase of that oil.  As the article points out, he has spent more than $60 million promoting his “Pickens Plan”, which advocates the creation of millions of jobs by building out the country’s capacity to generate electricity from wind, revamping the electricity grid, providing homeowner incentives for energy savings, and using natural gas as a transportation fuel (Pickens Plan).

I feel that much of what has been discussed of Pickens’ alternative energy initiatives in the media have been focused on the large investments he has made in wind farms.  However, he has also made a big push for using domestic natural gas supplies as a transportation fuel with the hope of alleviating some of our dependency on foreign oil.  As the article points out, the transportation sector accounts for most of the 21 million barrels of oil per day that our country currently consumes.  Pickens’ plan focuses on the commercial sector that accounts for a large portion of that consumption.  He expects that the recently proposed legislation, the Natural Gas Act, will get through Congress soon and will provide a solid foundation in implementing natural gas as a widely-used transportation fuel, create new jobs, and drastically reduce imports from OPEC over the coming years.

Obviously the recent shale developments and discoveries here at home have provided a big push for this plan, as we currently have a glut of supply and low prices.  According to the EIA, next to Iran the US had the largest increase in reported natural gas reserves in 2009 of 27 tcf, or 13%.  Technologies such as horizontal drilling and hydraulic fracturing have made these unconventional gas plays economical and are being adapted to similar resource plays in other parts of the world (i.e. Europe).  Exxon’s recent acquisition of XTO Energy could be a serious indication of the beginning of a trend both here at home and abroad.

It will unquestionably take significant time, investment, and incentives to see a big move to natural gas vehicles (NGVs) here in the US, which currently makes up only 1.3% of the total worldwide NGV count.  While fuel costs would be significantly cheaper than gasoline or diesel, the infrastructure is lacking.  It’s extremely costly for retail locations to provide natural gas fuel tanks, but it’s more efficient for large stations for fleets of commercial vehicles, busses, trucks, etc. 

It will be interesting to see if and when this legislation gets through Congress, and the pace at which our country can move to switch to natural gas as a transportation fuel.  As you would expect, there has been shifts seen in California:  there are more than 2,800 NGV buses in operation in Los Angeles, and San Diego is replacing its recycling trucks with NGVs.  Outside of CA, AT&T is starting an initiative to eventually replace over 8,000 trucks with NGVs.

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One response to “Turning to natural gas here at home

  1. cseberle

    As the use of residential natural gas becomes more prevalent, a huge obstacle that needs to be addressed is the safety aspects. There have been many examples of gas leaks in residential houses that have resulted in disastrous explosions. In addition running cars and trucks on natural gas can create a bomb on wheels if the tank isn’t protected properly. The Paul Scherrer Institute (www.psi.ch) out of Switzerland put together a comparative assessment of natural gas accident risks. It gives an interesting background about trends comparing natural gas accidents to other types of energy. Although the study is a few years old, and as natural gas becomes a more mainstream energy source I’m sure some of the numbers have increased.

    http://gabe.web.psi.ch/pdfs/PSI_Report/SVGW_PSI-Bericht-05-01.pdf

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