CNG and LNG vehicles see increased demand in U.S. and Canada

A recently completed analysis of the U.S. and Canadian Natural Gas Vehicle Market found that while there are cost and infrastructure challenges to the broader use of Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) vehicles, demand for natural gas vehicles has increased.

Using 2009 numbers, it was found that the amount of natural gas demanded for transportation use is 3.2 billion cubic feet, the equivalent of 27.7 million gallons of gasoline.

The analysis, conducted by TIAX, LLC, is a thorough and independent assessment of the key technical, economic, regulatory, social, and political factors and challenges that shape the market for natural gas vehicles. This week, the first portions of TIAX’s analysis addressing CNG and LNG Infrastructure were released and can be found on ANGA’s website.

The report sections on CNG and LNG infrastructure are the most comprehensive and technical assessments about the current state of CNG and LNG transportation. In these sections, TIAX confronts the “chicken and the egg” conversations about natural gas vehicles; namely, do we need more natural gas vehicles to spur infrastructure development or do we need more infrastructure to be developed so that more natural gas vehicles can be put to use?

Read more here.

Canada and U.S. go in opposite directions on energy

The Institute for Energy Research explains today how Canada and the U.S. are going in opposite directions on energy policy. Here are a few of the highlights:

  1. Canada is increasing oil production rapidly:

    One of the largest positive forces driving Canada’s economy is oil production and a recent oil production forecast from an analyst at CIBC World Markets captures show just how much oil production could increase. This latest forecast of Alberta oil sands production of 4.1 million barrels per day by 2020 is higher than the forecast made by the Canadian Association of Petroleum Producers (CAPP) that expected a more modest increase of 1.4 million barrels per day, reaching a total of 3 million barrels per day by 2020. But, just using the CAPP forecast, industry and government analysts expect Canadian oil production to bump up against current pipeline capacity by 2015 or 2016.

  2. Canada is building new pipeline infrastructure, for example:

    Enbridge is planning to spend C$3.2 billion ($3.15 billion) on pipeline expansions, mostly to get oil from Alberta and North Dakota to refineries in the U.S. Midwest and in Eastern Canada. East coast refineries are currently fed by foreign oil , which are more expensive than U.S. benchmark prices. According to Stephen Wuori, the head of Enbridge’s liquids pipeline business, “Refineries in Ontario and Quebec are paying premiums of $20 per barrel or more to obtain crude oil from the foreign sources they are currently largely dependent on. Access to Canadian and U.S. Bakken production will help level the playing field for these refineries, protecting their long term viability and safeguarding jobs.” The expansions are expected to be completed in 2014

  3. Continue reading

Should the U.S. export Nat Gas?

Ezra Klein at The Washington Post had a post on his Wonkblog this week that asked whether we should be exporting our natural gas reserves as LNG to the rest of the world. Here are some of the pros and cons:

As the Council of Foreign Relations’ Michael Levi has argued, boosting natural-gas exports could have both ups and downs. On the beneficial side, the United States could strategically use its gas to help Europe wean itself off its dependence on Russian exports. What’s more, other countries might find better opportunities to displace oil with natural gas than the United States can, which, in turn, could put much-needed downward pressure on world oil prices.

On the minus side, Levi notes, making U.S. natural gas more expensive could also make it harder for the United States to tackle climate change at home — after all, cheap natural gas is expected to displace some 9 percent of U.S. coal demand by 2035. That, in turn, would make it even less likely that the United States plays a crucial leading role in averting drastic climate change.

What do you think?

T. Boone Pickens preaches his energy “gospel”

T. Boone Pickens is preaching the benefits of natural gas. Here’s a little bit of what he says:

“Natural gas will do everything we want it to do,” he says. “It’s 130-octane fuel, it’s 25 percent cleaner than oil — and we have an abundance of it. It doesn’t require refining; it comes out of ground at 130 octane; run it through a separator and it’s ready to use. It will be very simple for us to make this transition.”

While natural gas-powered vehicles are nothing new — people have been converting vehicles for decades — Pickens says booming supplies of U.S. natural gas and falling prices make it ideal for the backbone of the nation’s transportation fleet: trucks.

“Wind, nuclear, and solar are fine, but if we’re going to do anything about our dependency on foreign oil, we have to address transportation.”

There are 18 million 18-wheelers in the U.S., he says. If converted to natural gas, the industry’s carbon emissions would drop by 30 percent, fuel costs would drop, and imports of OPEC oil would be slashed by 60 percent. Continue reading

Kwik Trip building CNG infrastructure in Iowa, Minnesota, and Wisconsin

Kwik Trip, one the largest convenience store chains in the upper Midwest, has opened a new CNG station in LaCrosse, WI, is working to open several more this year, and has plans for several more stations next year. Consequently, if you drive in the tri-state area of Iowa, Minnesota, or Wisconsin, you may want to seriously consider converting your cars, pick-ups, or fleets to CNG. The infrastructure should rapidly become available.

You can read more here.

Dominion sues Sierra Club for right to build LNG plant

Dominion said it has filed a lawsuit to confirm its right to construct a natural gas liquefaction project at its Cove Point liquefied natural gas terminal in Lusby, Md. The company filed a complaint for declaratory judgment in response to an erroneous claim by the Sierra Club that the club has the authority to block the project.

The plain language of a 2005 agreement, to which Dominion and the Sierra Club are parties, specifically permits all the activities related to the planned liquefaction project, Dominion said in a complaint filed with the Circuit Court of Calvert County, Md.

“This project is of immense value to Calvert County, the state of Maryland and the United States,” said Gary L. Sypolt, CEO of the company’s Dominion Energy business unit. “We have a long history of working with our environmental partners at Cove Point. Although the Sierra Club has chosen not to work with us in this instance, we are confident we are right and believe the best time to resolve this issue is now.”
Once completed, the liquefaction project is expected to handle natural gas exports that would reduce the U.S. trade deficit by more than $2.8 billion per year. It also would generate directly and indirectly about $1 billion annually in additional federal, state and local government revenues.

In Calvert County alone, the project could produce additional property tax revenue of up to $40 million per year and would make Dominion the county’s largest taxpayer. Over the life of the project, it would have an estimated economic impact on Calvert County of $1.3 billion. The project would generate 2,500 to 3,100 construction jobs and 70 to 100 permanent jobs in Calvert County.

In contrast to previous projects at Cove Point, including a 2005 expansion of the facility, the Sierra Club declined Dominion’s offer to discuss how to undertake the project in the most ecologically sound manner. Instead, the club and its Maryland chapter last month delivered a letter demanding the company abandon the project. Continue reading

Vermont obtains dubious distinction of being the 1st state to ban hydraulic fracturing

The Houston Chronicle reports that Vermont has become the 1st state to ban hydraulic fracturing:

MONTPELIER, Vt. (AP) — Gov. Peter Shumlin on Wednesday signed into law the nation’s first ban on a hotly debated natural gas drilling technique that involves blasting chemical-laced water deep into the ground.

The Democrat, surrounded at a Statehouse ceremony by environmentalists and Twinfield Union School students who pushed for the ban, said the law may help Vermont set an example for other states. The ban may be largely symbolic, though, because there is believed to be little to no natural gas or oil beneath the surface in Vermont.

Vermont Governor Peter Shumlin gave the reasoning behind the bill:

Shumlin said the increased amounts of natural gas obtainable through hydraulic fracturing were not worth the risk to drinking water supplies.

In the coming generation or two, “drinking water will be more valuable than oil or natural gas,” Shumlin said. Continue reading

NASCAR race adds first CNG pace car

Atmos Energy’s 2012 Honda Civic will be leading a group of professional racers who are vying to become the next NASCAR “All-Star” this Saturday, May 5, at the grand opening of the Revolution Park Racing and Entertainment Complex, Louisiana. “It’s an unbelievable opportunity to drive the first natural gas-powered pace car in a Nascar race,” said Atmos Energy service technician turned pace-car driver Greg Martin.

Dozens of racers will follow Martin and his CNG vehicle during the Bumper to Bumper Pro Late Model Series at Revolution Park. “More than 5,000 people are expected to attend this weekend’s race and will be watching our NGV circle the track,” added Martin. “That’s a lot of attention on a car that is becoming the cleanest vehicle of the future.” Continue reading

Rep. Bill Cassidy’s Plan to Multiply CNG Stations

Rep. Bill Cassidy explains his bill, H.R. 1712, that would remove the limits on retail sales for natural gas producing companies such as Chesapeake and Apache:

Unfortunately, the main obstacle is a lack of natural gas fuel infrastructure in our country. Currently in the United States, there are only 449 CNG fueling stations accessible to the public, which is dwarfed by the more than 157,000 gasoline stations.

There are a number of proposals to spur natural gas infrastructure development in Washington. Not surprisingly, when it comes to Congress, the most talked about option involves subsidies for both natural gas vehicles and for the actual CNG fuel itself. While we should be using all of our available natural resources to aid in lowering the costs of transportation, the reality is that our country has neither the money to subsidize development nor the expertise to pick winners and losers in the energy and transportation sectors.

As opposed to subsidies, I believe that a simple change to our tax code would help those companies that develop natural gas look at domestic retail infrastructure development as a serious option. For background purposes, it is important to understand the differences between independent and major oil and gas producers. Under our tax code, independent producers of oil and gas, such as Apache and Chesapeake, are different from major oil and gas companies, such as ExxonMobil or Shell, as independents are limited to $ 5 million in revenue from retail sales. Whether intentional or not, this antiquated provision is keeping companies that from investing in CNG fueling stations all over the country. Continue reading