Foreign Oil vs. Natural Gas

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Permalink Reply by neil cox on March 4, 2009 at 5:03pm

The incentives will cost our grand children 24 billion dollars plus administrative cost plus interest = not massive compared to other resent giveaways. Fewer than 350,000 trucks with CNG will be sold, in the three years, if the extra cost of the truck exceeds $70,000 (likely) 1000 stations with CNG may mean 350 CNG sales per day, per station. That means a CNG sale every 4 minutes 24/7. If the average profit for the station owner is one dollar per sale, that is $250,000 for the station owner in one million minutes = 16,666 hours = 70 days. Yes, putting in the pumps in is attractive if that costs less than a million dollars. The truckers will like 4 minute refills if that is possible, even if they save no money on the fuel. Is 1000 stations on USA interstate highways, enough to produce 7 CNG refills per week, for targeted truckers? Yes but, I don't think 350,000 truckers will fit that target, and some truckers will choose not to buy a CNG truck even if the purchase seems cost effective. I'll guess 200,000 CNG truck purchases in three years, which is good enough, and a significant reduction in foreign oil purchase. Can any USA truck maker produce 3500 CNG trucks per year, new or rebuilt? Are there presently a hundred truck makers in the USA that can be producing CNG trucks before the end of 2009? Neil

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Permalink Reply by James on March 8, 2009 at 10:19am

I am concerned that we are trading one type of fuel (oil) to another (CNG) from the same people (mideast) that are holding us hostage now.

We are importing CNG in large quantities from the Mideast countries now. As we use more NG, we will have to import even more as our own resources are finite.

I feel NG is only a short time solution as we become even more dependent on offshore imports.

What we need is more research into battery and other electric storage for vehicles. Electric motors are far more efficient than internal combustion engines and newer more powerful, smaller, more efficient electric motors are coming online right now.

Natural gas does have a great many advantages, but are we trading one devil for another?

Sorry for the rant

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Permalink Reply by neil cox on March 8, 2009 at 12:26pm

Hi James: I don't think USA imports any CNG = compressed natural gas from the mid East and only a small percentage of our natural gas is imported LNG = liquid natural gas = very cold. Some other countries import large quantities of LNG and LPG = liquid petroleum gas. LPG is sometimes the same as LNG, and in other cases is propane or butane, which the USA imports small amounts of.
Likely USA can add a few million CNG vehicles, even if we divert no natural gas from electric generation and we reduce our imports of LNG to zero, except from Canada and Mexico. If the present stimulus package is implemented, we will have lots of USA natural gas = methane in a few years, and could become a significant exporter of LNG. Does anyone know if a vehicle tank designed for CNG can be safely half filled with LNG? That is sort of like asking if a scuba tank can safely be half filled with liquid air? Neil

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Permalink Reply by Casey Kitagawa on March 9, 2009 at 11:45pm

James your facts are way off. We produce 98% of the gas we consume domestically. The other 2% comes from Canada. We have more than enough natural gas onshore in the U.S. to do everything Pickens has proposed and more. The key is you have to keep drilling the wells, which replenishes and grows natural gas production with the added benefit of creating tons of well paying jobs, especially since most of the time it seems that the large natural gas deposits are found in rural areas without much other economic activity. (You may point to the Fort Worth area as being a contradiction to this, which it sort of is, although anybody who ever went there before the Barnett boom can attest to the economic opportunity it created there)

The two drawbacks to natural gas are that if you do not replenish the supply with new wells, you have a 30% decline in average production for any given well annually, and it is not completely clean, although it is far cleaner than coal or crude oil derivatives. This country is extremely rich in natural gas, coal, and yes oil, although huge portions of the oil are in areas that we are blocked from drilling in. In the Marcellus Shale formation alone, which is one of the newest and most significant major gas fields ever discovered, there is a conservative estimate of 50 trillion cubic feet of recoverable natural gas with current technology. That's enough to power America's entire energy consumption for 2 years, and thats just one formation in one region. America's natural gas companies, who are often mistaken for Big Oil (Devon, Chesapeake, Anadarko, XTO, to name a few) have been making significant gas discoveries at an amazing rate.

What we need to do is commit to the plan and commit to our domestic energy sources that can wean us off the foreign oil that fuels America haters like Chavez and ends up funneling our own money into the hands of people who want us to fail. The money could do so much for our own economy if it were staying in the economy. The natural gas industry is large in this country, but we have the resources to create millions more jobs and untold wealth if we would follow the steps outlined in the plan as well as encourage more drilling here. We have enough resources to become a net energy exporter, so why do we buy our energy from overseas? We have more energy equivalent in our coal that Saudi does in oil. We have some of the most prolific gas fields (more being added every year) in the world, we have huge oil deposits in restricted areas. We have offshore Oil and Gas fields of which we have barely scraped the surface. We have what is being described as the best, most consistent wind corridor in the world.

We have so much energy here its almost embarrassing.
What really is embarrassing is how uninformed our fellow Americans are about all of these assets we have. We may be in a economic crisis, but people need to look at the natural advantages we have.

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Permalink Reply by Brad Johnson on March 10, 2009 at 4:50pm

I'm with Casey on alot of the points. We do have abundant NG. CNG is very clean when compared to oil-based fuels and definitely to a (very theoretical) "clean liquifid coal" fuel. Though I am 100% for the US to lead the world in effecient battery development for vehicles as well as for storage of wind/sun-generated energy, it could be "dirtier" than CNG if the electricity is generated from coal ( as 50%+ of it is). We could also potentially be a large exporter of LNG.someday providng work and growth. Long term we need to be as effecient as possible and use all available sources of the cleanest possible energy.

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Permalink Reply by Rob Harmon on March 11, 2009 at 6:25pm

The best place to start a conversion to CNG is at the local government level. Transit buses, school buses and city garbage trucks. All these vehicle come back to a central location at night where they can be fueled. A CNG fueling station with six compressor units would cost about $6 or $7 million. These units have a seven or eight year life before overhaul.

This station could easily fuel 300 vehicles a night. I can argue about the cost savings of CNG versus diesel all night, but the fact is, that money spent on natural gas stays in the US. It also produces desperately need US jobs.

Another benefit of CNG versus diesel is that there is no need for storage tanks. The natural comes into the service station from the pipeline when needed. Diesel is stored in tanks that can leak and pollute ground water.

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Permalink Reply by SJC on March 5, 2009 at 10:10am

Many of the numbers in the article are wrong:

"A diesel powered truck gets about 6 miles per gallon and drives 100,000 miles per year, burning 17,000 gallons of diesel. A truck driving the same distance on natural gas would burn 2,100 cubic feet of natural gas."

Since there are 100 cubic feet in a therm, this is only 21 therms which is about 14 gallons of diesel equivalent. They are off by a factor of more than 1000.

"Gas at about $5 per cubic foot makes the annual fuel costs of the natural gas vehicle $10,500."

Natural gas costs about $1 per therm (100 cubic feet) The 4 to 1 ratio in fuel costs is about right and short haul local trucks could benefit as well. Leave it to the "Weekly Slander" to mess the story up :)

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Permalink Reply by Rob Harmon on March 11, 2009 at 6:04pm

You are correct. The article should have said a truck will burn an average of 2,100 MCF per year. A MCF equals a 1,000 cubic feet. The Houston Ship Channel spot price of a one MCF today was about $4.00.

The dollars are close. The unit of measure was off.

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Permalink Reply by Raymond Fontanes on March 5, 2009 at 5:52pm

UPS has about 1,100 CNG trucks. 77Mill in tax credits. Nice!

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Permalink Reply by Larry Ihnots on March 6, 2009 at 3:20am

I know this is a "should of - could ", but the billions of dollars we are tossing around in discussion is miniscule to the amount of billions which has been pumped into the ailing companies of A.I.G., GM, and Citigroup. Had a portion of the help been set aside (a respectfully tiny portion), a mandatory, but federally paid for installation of CNG tanks into the truckstops could be underway right now. Additionally, the automakers, who also make "big trucks" could have already been making conversions to, and building of CNG Trucks. Think of the immediate job creation and decreased oil consumption already. Instead, we have $350Billion missing from Mr. Paulson. Another $1/4 Trillion lost to the aforementioned companies, of which the strings will soon be cut and they'll be allowed to fail and all in the end, congress continues to look at CNG conversion "pork barrel" spending ! Larry Ihnots

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Permalink Reply by Adalberto Lopez on March 6, 2009 at 5:06pm

As a solution to the refueling problem of natural gas, couldn't a system similar to the one used in the gas BBQ usage be implemented? The system consists of having replaceable cilinders at convenient locations, such as I have seen in CVS and other outlets.

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Permalink Reply by neil cox on March 6, 2009 at 7:23pm

Those BBQ cylinders are propane or butane under moderate pressure. They do have an excellent safety record, but natural gas = CNG = methane requires ten plus times the pressure to get even 50 miles from a tank this size. I suppose, several tanks could be installed in each vehicle, or slightly larger, and twice as heavy tanks could be sold at CVS etc. if we are willing to accept more risk of fire and explosion. The world only has enough propane and butane for a small increase in the number of vehicles using these fuels. Some people would have difficulty handling twice as heavy tanks. Neil

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