What's new in production

 Vol. 233 No. 10

Since the problem with natural gas is excess production, too little demand, or both (the U.S. produces about 3 Bcf more than it can use), anything that helps goose the demand side would seem to make sense. A couple of years ago, a newspaper article about the future role of natural gas for powering vehicles debated the question of hybrid/electric versus natural gas used directly for engine fuel. A letter to the Houston Chronicle responded, “Using our natural gas resources to make electricity, which is then used to power electric motors, makes no sense whatever. The engines are there, the technology is there. The fuel is abundant and burns clean. Cut out the middleman! Run cars on CNG!”

Assume that natural gas supplies will be as steady and economical to produce as the most optimistic optimists predict. Let’s say that new drilling and production technology makes natural gas a primary fuel of choice. Is the skeptical reader correct? With electric vehicles (EVs), are we really neglecting an obvious solution to the supply/demand conundrum?

The market has not been as ready to embrace natural gas vehicles (NGVs) as the economics might suggest. Strictly on meritorious attributes, NGVs do pretty well compared to other kinds of vehicles.

Dollars per Btu? Compressed natural gas (CNG) beats both gasoline and diesel to a bloody pulp. Equivalence is a tricky issue, but currently CNG can move a traditional combustion vehicle at about $2 per gallon-equivalent compared to gasoline. This makes CNG especially attractive for company fleets, where fuel costs are a large part of the annual budget.

Range? CNG falls in the middle between gasoline and electric cars. Some fleet taxicabs outfitted with larger CNG tanks can run 300 mi between fill-ups. More typical is about 200 mi. Not bad—about half that of gasoline, but more than twice what you can get from a single charge on an EV. The tanks take up considerably more room than either gasoline tanks or EV batteries, reducing trunk space. One solution is to CNG-convert a small pickup truck—raise the bed about a foot and utilize the space underneath.

Fuel availability? Ouch. In 2011, there were about 123,000 NGVs operating in the U.S. This is a number that has barely budged in 10 years. They are served by about 1,000 fueling stations (versus over 150,000 traditional gasoline and diesel filling stations.) Therein lurks the dilemma: More CNG stations are required to make the vehicle market attractive, while a larger number of vehicles would create the demand that makes the hefty investment in fueling stations—around $750,000 for compressors, tanks and dispensers—worth the trouble.

That’s another reason that, so far, NGVs remain largely the province of company and municipal fleets (the great majority are buses). For vehicles that travel a predictable number of miles within a specified area, the rapid-compression systems are not necessary, as vehicles can be hooked up during their downtime to cheaper, lower-compression “trickle” systems. That trickle-compressor trick can also work at home in your driveway, assuming a gas connection and sufficient time. Still, the anxiety of getting caught depleted far from a CNG station is one of the primary hurdles to public acceptance.

One company that provides and promotes natural gas fuels is Clean Energy Fuels, founded by the legendary T. Boone Pickens in 1997. Clean Energy has a convenient “Station Locator” (www.cnglngstations.com) where you can search an interactive road map and plan your route. In the Northeast, between Washington DC and Boston, you’d get around pretty well. From my home in Houston, heading due east, the next CNG option is Baton Rouge, 270 mi away. You can’t get there from here, as they say, at least not with most CNG-fueled passenger cars.

However, more stations are getting built every day. Tony Kritzer, a Clean Energy spokesman, told World Oil that the company has 313 natural gas stations in the U.S., either owned and operated by them or built for other companies, such as Republic and Waste Management. About 70% are CNG, and the rest are LNG stations. “We are targeting to build 70 more LNG stations by the end of this year, and a similar number of CNG stations,” said Kritzer. “What will be the game-changer is the LNG highway that we’re building.”

Gas from liquids. LNG is a compelling alternative for long-haul trucks. The technology is similar, but the fuel is cryogenic and must be stored in specially insulated tanks. Many engines are being made with LNG in mind, and conversions are available, usually done when the truck is ready for a scheduled overhaul. Just like with CNG, fuel availability is the hurdle, but with a range comparable to diesel, that is less of an issue. Once LNG is fully available along the trucking corridor, more heavy vehicles will utilize the cold stuff.

“The heavy-duty, Class 8 trucks are where we get the best margin,” said Kritzer. “That’s where we’re deploying most of our capital, on the LNG infrastructure.”

Back to the first question. When you drive a car fueled directly from natural gas, is it more or less efficient than a similar car using electricity from the grid, assuming the power plant runs on CNG? In this scenario, the electric vehicle is the winner. That’s because the enormous turbines in power plants have much greater efficiency than CNG engines. A study entitled “Electrification of the transportation system,” published by MIT, estimated that 1 Mcf of natural gas could drive a passenger car of average weight 224 mi. If the same amount of gas is used to create electricity, it powers a similar car 457 mi.

There are some very good reasons to power vehicles with natural gas—it can be a cheaper, cleaner, American alternative to gasoline and diesel—but cutting out the middleman doesn’t necessarily help. In some cases, the middleman can be your friend.