Natural Gas Transportation: A Change in Tide

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Natural Gas Transportation: A Change in Tide

Natural-gas-infrastructureWe’ve discussed the Pickens Plan, which aims to eliminate foreign oil dependence with a focus on natural gas in transportation vehicles, and the opportunities that clean and abundant natural gas provide to the transportation industry.

The low cost of gas will reduce prices of goods, stimulate the economy, and contribute to reduced greenhouse gas emissions.

The obstacle has been getting the natural gas to the end user – into the trucking fleets. The lack of natural gas fueling stations makes it difficult for shipping fleets to make a 100 percent transformation to natural gas. Some, like UPS have transformed a percentage of their fleet because some of their routes have reliability. As well, they are investing in their own refueling stations. But that isn’t a realistic solution for most shipping companies – to build their own refueling stations. The cost of entry would take too long to recoup in the savings it achieves in the cheaper fuel.

Thankfully, the tide is changing according to Navigant Research who reported approximately 30,000 natural gas fueling stations will be added by 2020.

That’s good news and will certainly contribute to the 12 percent increase in consumption the U.S. Energy Information Administration estimates will occur worldwide.

Current State of Natural Gas Refueling Stations

There are 1,438 refueling stations in the U.S. in two types:

  1. Fast fill: for retail and light duty vehicles
  2. Time-fill: for heavy duty fleets (although, there are smaller time-fill stations for home refueling.)

These stations, like gas stations, cool the natural gas to a liquid for final delivery to the vehicle.

Liquid natural gas (LNG) is used primarily for heavy duty trucks while compressed natural gas (CNG) is used more in small cars. While prices fluctuate, the cost is typically $1-2 less than gas.

Clean Energy, one of the largest providers in the U.S. of natural gas fuel for transportation, has unveiled America’s Natural Gas Highway, a network of fueling stations strategically located on connecting Interstate highways providing coast to coast and border to border routes. They locate many of their stations at existing facilities and trucking centers. In 2012, they added 60 stations with another 30 to 50 anticipated for 2013.

The beginning of the shift has begun. Start with the highest impact to show success and it can only grow from there. When trucking fleets make the transition, and overall costs go down, investment in the retail and single-user fueling stations can only come next.

*Image: Clean Energy’s America’s Natural Gas Highways route map