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Page added on August 18, 2014
Natural Gas as A Fuel for Trucking Failing to Deliver
Much has been made of the potential for natural gas as a fuel for the trucking and rail industries.
The dramatic fall in natural gas prices in recent years has spurred investment in refueling stations for the road trucking industry and forced the rail industry to review their position regarding the economics of using natural gas either as compressed natural gas (CNG) or as liquefied natural gas (LNG) to replace diesel fuel.
So far, though, in spite of US natural gas prices that are a third of global levels, substitution has been limited. Presently, natural gas used as transportation fuel constitutes only about 0.1 % of total US consumption. According to a report, about 18 months ago half of that amount was consumed in California alone. A majority of states use less than 2 million cubic feet per month, and 11 states don’t use any according to this report. California remains, by far, the largest adopter according to EIA data as this recent graph shows and the agency reports for 2013 road transporttaion still only made up 0.126% of natural gas consumption. So, while there has been a lot of development work among engine builders and government agency support for specific programs, wider uptake remains slow.
The argument on purely economic grounds looks compelling at first sight, but on closer examination upfront capital costs and worries about longer-term price competitiveness are overlaying a still limited refueling infrastructure to deter widespread investment.
As an example, using federal government estimates the report assumes that a typical American family puts 12,000 miles on a car. At 25 miles per gallon, they will consume 480 gallons/year, resulting in a cost of about $1,920 at $4 a gallon. Natural gas at an equivalent price of about $2.50/gallon would save the family $720 a year. However, if that savings comes at the cost of a $10,000 vehicle purchase price premium it is no more compelling than that for electric cars with similarly high upfront costs – government subsidies excepted.
The article goes on to apply the same general consideration to high upfront costs of heavy LNG trucks, currently amounting to about $90,000 more than traditional diesel-powered versions. As with CNG cars, this is in part because they aren’t yet being mass-produced. On the other hand, the article goes on, those trucks log a lot more miles than cars, and the accumulated fuel savings should provide enormous business benefits over the long haul.
The energy density of CNG and even LNG is less than for diesel, by 6:1 for CNG and 1.7:1 for LNG making fuel bulk and weight an issue. Natural gas however does burn more cleanly, extending vehicle life, reducing maintenance costs and reducing emissions. Specifically, natural gas is said to cut carbon monoxide emissions by an estimated 90%-97%, nitrogen dioxide emissions by 35%-60%, and carbon dioxide emissions by an estimated 25%-30%. The reduction in emissions, is what is driving federal incentives to adopt the fuel, and explains why California is so far ahead of everywhere else in terms of uptake.
The vagaries of government support aside the greatest threat to LNG or CNG adoption as a trucking fuel, though, could be a dilution of the current cost argument. Natural gas prices may be low now but will they remain low? Australia’s example says they will not, a Motley Fool article points to Australia’s natural gas bonanza spurring the development of export facilities and the rise of domestic prices to compete with supplies being sent to the lucrative Asian market. Pressure from oil and gas firms in the shale gas market to export could equally level US prices to a point closer to world prices. The oil-to-gas ratio has already fallen in the US from 7:1 in 2012, and is expected to reach to 3.4:1 by 2018.
In the long term, the price advantage enjoyed by US consumers for both oil and gas will almost certainly reduce as imports fall and exports rise. Taken together, the potential rise in natural gas prices coupled with the capital costs of converting from diesel to natural gas may not favor a long-term conversion of fuels in the trucking industry and may explain why the rail industry is moving very cautiously in converting existing locomotives or ordering new one’s outside of specific rail road/client programs.
8 Comments on "Natural Gas as A Fuel for Trucking Failing to Deliver"
Nony on Mon, 18th Aug 2014 7:30 pm
Australia importing more gas will serve to lower U.S. gas prices (competition at the minimum).
The biggest concern is an oil price crash. I know everyone here thinks that’s inconceivable (Princess Bride reference), but we had 20 years of low oil prices 85 to 2005 after everyone tnought it would be expensive forever.
MSN Fanboy on Mon, 18th Aug 2014 7:54 pm
Nony: We dont think its inconceivable, we just require higher prices to stop peak oil from occuring.
Lower prices=Lower production=Higher prices. Its cyclical. We may see it drop, but it will regain price just as quickly as it drops due to oil companies needing to pass a certain profit ceiling to make a profit, otherwise why pull it out the ground??? (nevermind other factors, i.e. depression)
If ever you get your “wish” Nony the irony will be BAU will be over: Peak oil will be here, as it were.
So yes, the biggest concern is an oil price crash
Plantagenet on Mon, 18th Aug 2014 8:58 pm
A bigger worry than an oil price crash is a NG price rise to global price levels. US consumers currently pay only 1/3 typical global NG prices—how much longer can that last now that the Obama administration has started granting exemptions to the laws that restrict US energy exports.
pctech on Tue, 19th Aug 2014 6:49 am
The section about energy density says it all! You can’t cheat thermal -dynamics. Gasoline and diesel are magical fuels because of their high energy density and ease of storage.
JuanP on Tue, 19th Aug 2014 11:03 am
It is good to have all the engines that have been designed these past few years for CNG and LNG transportation vehicles. The more we build the better, even assuming rising gas prices in the future. Anything that replaces or reduces our dependence on oil for transport will help after PO. I believe at some point we will go back to locomotives with a steam engine that is fed wood for a while.
Kenz300 on Tue, 19th Aug 2014 11:25 am
Oil has had a long run as virtually the only transportation fuel.
The sooner we end the oil monopoly on transportation fuel the better.
Bring on the electric, flex-fuel, biofuel, hybrid, CNG, LNG and hydrogen fueled vehicles. Competition is good.
How Fossil Fuel Interests Attack Renewable Energy
http://www.renewableenergyworld.com/rea/news/article/2014/05/how-fossil-fuel-interests-attack-renewable-energy
————————–
Big Companies, Big Renewable Investments
http://www.renewableenergyworld.com/rea/news/article/2014/08/big-companies-big-renewable-investments
Pops on Tue, 19th Aug 2014 2:58 pm
“we had 20 years of low oil prices 85 to 2005”
between ’85 & ’95 global C+C production increased over 10mbd
between ’05 & ’14 ?
Maybe 2
energyskeptic on Tue, 19th Aug 2014 2:58 pm
Why GTL and CNG from Natural Gas (or coal, etc.) won’t work
Neither GTL (gas to liquids) diesel or Compressed Natural Gas (CNG) possible unless an abundant and inexpensive source of natural gas were found (NAS 2009).
Compressed natural gas (CNG) and liquefied natural gas (LNG) are currently being explored as alternatives to diesel fuel for trucking fleets, and both have significant drawbacks compared to DME. CNG engines, though well suited for medium-duty short haul applications, have proven inadequate for heavy-duty long haul commercial trucking. Poor fuel economy limits the range of CNG trucks, thus requiring more fuel stops and resulting in a less productive truck fleet. Also, CNG fueling requires the installation and running at fueling stations of costly and energy intensive gas compressors that pressurize on-board CNG fuel tanks up to the 3000 to 3600 psi required.
LNG, though capable of producing the power required for long haul trucking, also suffers from significant drawbacks. As with gasoline and CNG engines, LNG engines require spark ignition systems for combustion and therefore lack the fuel efficiency of compression engines burning diesel or DME. Furthermore, the need to store LNG at temperatures below -260 0F doubles the cost of fuel tankers for transportation and more than quadruples the cost of on-board fuel tanks on the trucks themselves, leading to higher costs and therefore lower operating margins for commercial carriers. Because fuel tank temperatures vary as trucks travel, fuel must be vented from the LNG tank into the environment in order to maintain a safe tank pressure and proper system operation
Dimethyl ether (DME)
The reason there’s excitement over DME is that it can be burned in diesel engines, which do the real essential work of society. Tractors, harvesters, trucks, mining equipment, and other diesel vehicles can’t be electrified with batteries or fuels cells since these weigh too much (per kg, oil has 91 times as much energy as a lithium battery of the same weight).
DME has about half the energy content of diesel fuel, so a truck will have to carry about twice the amount of DME for a given range – a penalty that’s worse with CNG and LNG. Two gallons of DME weigh 11 pounds compared to diesel’s 7.5 pounds, so a DME-fueled truck or tractor will be heavier than a diesel-fueled truck, and is better suited to local than long-haul distances. Diesel engines need a special injection system and different cylinder heads to handle the high fuel flow of DME, and steel fuel tanks to store it aboard a truck.
There are many problems with DME, the main one being that it’s seen as a way to convert our limitless supplies of natural gas into something diesel engines can burn now that we’re energy independent. But of course, fracking has only let us import a little less oil and delayed peak natural gas for a few years. DME can also be made from coal, but we are at peak coal too.
The refining process from natural gas to DME may have too high an EROEI as well. As with other gas-to-liquids processes, the first step is conversion to syngas, a mixture of hydrogen, carbon monoxide, and carbon dioxide. This syngas is then synthesized into methanol. Finally, DME is produced through a methanol dehydration reaction.
Dimethyl ether (DME) is not suitable for gasoline engines because of its high cetane number, but it can run a diesel engine with little modification. The primary challenge facing the use of DME is the lack of an infrastructure for distribution. Other disadvantages include low viscosity, poor lubricity, a propensity to swell rubber and cause leaks, and lower heating value compared with conventional diesel (NAS 2009).
DME costs twice as much to make as methanol (which is an intermediate product in the methane-to-DME refining process), and is also more expensive to make than diesel fuel, so refiners prefer to sell methanol. DME is mainly used as aerosol propellant to replace chloroflurocarbons in paints and cosmetics. World-wide production of DME in the world is less than 150,000 tons per year.
No matter how promising DME might be it’s not easy to compete with diesel, which is available everywhere from the existing distribution infrastructure.