The Patch Technology-Natural Gas

It is somewhat of an undisputed fact, whether from a policy perspective, environmental perspective, or from the perspective of your wallet, that America should look at switching its primary choice of transportation fuel— petroleum. 

Currently, the United States’ gluttony of oil is detrimental to the environment and leads us towards an unstable future. Our outrageously huge consumption of oil is sure to be detrimental in the future, whether because of a financial meltdown from the price of oil, or the destruction of environment and the health problems future generations could be expected to face due to pollution.  America needs to look for a domestic, more environmentally friendly, more stable alternative to oil in order to minimize the detrimental effects of our current oil dependency.

There are many technologies that have promise at solving the issue over the next century.  Electric cars, hydrogen fueled cars, super-rail, jet packs… you name it, and some one is suggesting it.  But for most of these solutions, the technology isn’t quite there. 

Electric cars, for example, have many problems of their own.  “Popular Mechanics has tested the Volt’s mileage claims and found that it gets 33 miles on its electric charge (not 40) and that its miles-per-gallon performance is 31.67 in the city and 36 on the highway (not 50).”[i]  Also, a question electric vehicle (EV) enthusiasts must answer is how convenient is it to charge the battery?  “There are currently 500 charging stations in the United States — 400 of them are in Southern California.”ⁱ  Then can we not just charge our EVs at home?  According to the Washington Examiner, the fine print on the Nissan Leaf states that “it takes 20 hours to charge on a standard 110V outlet” for a 100 mile range.ⁱ  That is quite an inconvenient amount of time.

Now I am not here to beat up on electric vehicles.  I also understand that technology must progress and in the future electric vehicles (among other technologies) may be the solution.  But until then, we need a patch.

Senator Lisa Murkowski sums up the patch perfectly:

“Without a doubt, the new technology that we’re seeing has enabled a natural gas boom that has changed our energy landscape and the outlook for our economy,” Murkowski said. “Natural gas is now an abundant, affordable, and clean source of energy, providing great opportunities for economic growth and energy security.”[ii]

Various Natural Gas Technologies

Compressed Natural Gas Conversion Kit Schematic

Compressed Natural Gas Vehicles Schematic

http://talkbestcar.blogspot.com/2011/03/mercedes-benz-e200-ngt-comes.html

Liquified Natural Gas Maritime Storage Container

www.alibaba.com

Natural gas technologies include compressed natural gas vehicle conversion kits, compressed natural gas vehicles, and maritime fuel containers for LNG engines among other solutions.  These technologies use natural gas instead of oil as a fuel source.  Through the use of natural gas instead of oil, oil dependency is thus lowered.   Although natural gas still produces emissions, the percentage of harmful emissions is much lower compared to power plants.[iii]  NGVs also have a total emission reduction of 20-30%, including a carbon monoxide reduction of 70-90% and oxides of nitrogen reduction by 75-95% over gasoline or diesel powered cars.[iv]  The economics of a NGV are superior as well to gasoline or diesel powered vehicles.   The quantity of CNG a vehicle uses is measured in gallons of gasoline equivalent (GGE), which is the quantity of CNG that offers the consumer the same amount of energy, measured in BTUs, as a gallon of gasoline. A natural gas GGE is on average significantly cheaper than a gallon of gasoline, making CNG a more economical fuel source for drivers.^iv  For the commuting American, converting his or her vehicle to natural gas from gasoline will save an estimated $600 per year.[v]  Also, since natural gas burns much cleaner than gasoline or diesel, the amount of wear and tear on engines caused by gunk and combustion residue is greatly decreased.[vi]

There are promising technologies for natural gas that work today and can use conversion kits to efficiently convert our vehicles to natural gas from gasoline or diesel.  Natural gas as a fuel source is both abundant and domestic, and for the time being, cheap.  I understand that there is not a solution that is perfectly inconsequential.  Natural gas has its own downsides, as I am sure many people can speak to, but it does offer an emission reduction alternative that is readily available, policy positive and less or evenly expensive as gasoline or diesel.  If we use natural gas as a patch until one of the other technologies can progress to being suitable alternative, we can help the environment, our security and our pocketbooks.

William McCraney

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[i] http://washingtonexaminer.com/the-problem-with-electric-cars/article/37094

[ii] http://www.energy.senate.gov/public/index.cfm/republican-news?ID=826309f0-5dc7-46a5-8f56-98e85c4f1eb2

[iii] Wang-Helmreich, Hanna, and Stefan Lochner. “The Potential Of Natural Gas As A Bridging Technology In Low-Emission Road Transportation.” Thermal Science 16.3 (2012): 729-746. Academic Search Complete. Web. 4 Dec. 2012.

[iv] http://www.ngvc.org/about_ngv/for_consumers.html

[v] http://www.afdc.energy.gov/vehicles/natural_gas_emissions.html

[vi] Tirkey, J. V., H. N. Gupta, and S. K. Shukla,”Integrated gas dynamic computational modelling and thermodynamic combustion diagnostics of multicylinder four-stroke spark ignition engine using compressed natural gas as a fuel,” International Journal Of Sustainable Energy 29, no. 2: 59-75. Academic Search Complete, EBSCOhost

New EIA Report Asks: What if the US Exported More LNG?

In a report recently released by the EIA, the Office of Energy Analysis (OEA) takes a stab at answering a question that was formally asked by the Department of Energy’s Office of Fossil Energy back in August 2011: What would be the “impact of increased domestic natural gas demand, as exports?”

OEA’s analysis considered four different scenarios consisting of a slow (1 Bcf/d/yr) or rapid (3 Bcf/d/yr) rate of “phasing-in” increased exports, and a low (6 Bcf/d) or high (12 Bcf/d) ultimate expected rate of export.^[1]

As one might expect, their results suggest that increased exports of natural gas (as liquefied natural gas, or LNG) would lead to upward pressure on domestic gas prices. This, in turn, would result in increased domestic production, and (to a lesser degree) upward pressure on electricity prices. The level of the impact on power generation would partly be a function of the difference between the rate of the increase in exports, and the rate of the increase in production.^[1]

This upward tick in natural gas production could reverse a recent trend that has seen companies moving away from dry gas plays. As an example, Chesapeake Energy just announced plans to  reduce the number of its operating dry gas rigs by ~68%,  a result of the currently low natural gas prices.^[2]

The current state of affairs in the domestic natural gas markets is significantly different than it was just a few years ago, prior to the rapid adoption of hydraulic fracturing and horizontal drilling, and prior to the recession. Several LNG regassification import terminals were permitted, financed, and built based on the expectation that the US would remain a net importer of natural gas for the foreseeable future.^[3][4]

Now, several of those import facilities are going through a similar process to get liquefaction facilities in place that will enable the exports being considered in this EIA report. Cheniere Energy is doing just this. The company has plans to construct a liquefaction facility at its Sabine Pass LNG import facility, which will have approximately a 2.6 Bcf/d export capacity. The company has already initiated FERC, NEPA and DOE permitting procedures and expects the facility to begin operations as early as 2015. They are also considering plans to construct an additional 1.8 Bcf/d export facility in Corpus Christi.^[5] 

However, it is still not certain that companies like Cheniere Energy will be able to recognize a return on their investment with these export facilities. Just as the adoption of new drilling technologies reduced the need for US LNG imports, the spread of those technologies to other parts of the world may also reduce the US opportunity to export.

Very importantly, the authors of this EIA report note that the National Energy Modeling System (NEMS) used for their projections “is not a world energy model and does not address the interaction between the potential for additional U.S. natural gas exports and developments in world natural gas markets.”^[1]

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End Notes:

[1] EIA Report, “Effect of Increased Natural Gas Exports on Domestic Energy Markets,” Dated 19 January 2012: http://www.eia.gov/analysis/requests/fe/pdf/fe_lng.pdf

[2] O&GJ, Chesapeake dry rig count cut: http://www.ogj.com/articles/2012/01/chesapeake-cuts-operated-dry-gas-drilling-rig-count.html

[3] FERC: Approved & Proposed (Potential) North American LNG Import/Export Terminals: http://ferc.gov/industries/gas/indus-act/lng.asp

[4] Market Watch, LNG Exports: http://www.marketwatch.com/story/shale-gas-opens-door-to-us-lng-exports-2011-12-05

[5] Market Watch, Cheniere: http://www.marketwatch.com/story/cheniere-plans-second-us-lng-export-terminal-2011-12-16