As Commodity Prices Face Pressure and Oil Stays High, Will Farmers Embrace Natural Gas?

2012 promises to be a difficult year for farmers as an estimated 4.8% increase in U.S. corn production, coupled with increased planting of the crop worldwide, puts downward pressure on prices. Corn, which has doubled in the past two years due to demand for cattle feed, is expected to drop by 30% to $4.035/bushel next year in Chicago trading. The record U.S. wheat harvest which is also projected next year should depress wheat prices as well, according to a Bloomberg article.

But oil prices are expected to remain high.  Barclay’s senior economist Alia Moubayed said that the Saudis need $91 oil as a “break even point” in an interview on Bloomberg’s “Surveillance” yesterday. Social unrest swept the Middle East in 2011, and the Saudi government has attempted to quell dissent by promising increased social benefits. The Saudis need higher oil prices to keep those promises. Saudi Arabia’s massive production capacity means that they are a longtime swing producer who can influence the world oil price by simply increasing or decreasing production. U.S. oil producers also need $80 oil to stay profitable. Below $80 they begin slowing drilling and decreasing production.

This combination of higher input costs and lower grain prices, coupled with the recent price boom in farmland, promises to squeeze profits for farmers in 2012. This has many farmers looking for ways to cut costs.

Natural gas may be part of the answer. “Though there are costs to converting diesel powered machinery to run on a diesel/natural gas blend, a 20-30% savings in diesel fuel promises a quick return on investment for high volume diesel users.” said C&E Clean Energy Solution’s Brian Carpenter. Continue reading

Questions and Answers With T. Boone Pickens

T. Boone Pickens is on a crusade to wean America off its addiction to foreign oil. The famed oilman and corporate takeover artist has been crisscrossing the country pushing the Pickens Plan, which proposes converting heavy vehicles to run on abundant and domestically available natural gas.

The plan is not uncontroversial, particularly amongst some in the green community who note that it is based on controversial extraction techniques and that Pickens, an oil and gas investor, stands to profit handsomely if it is enacted. But the plan, which inspired a bill in the U.S. Congress called the Nat Gas Act, also has influential supporters in Washington and at The New York Times. We caught up with Pickens a couple of weeks ago. The interview was condensed and edited for clarity. Continue reading

The Facts About Fracking

The real risks of the shale gas revolution, and how to manage them.

From the Wall Street Journal
The U.S. is in the midst of an energy revolution, and we don’t mean solar panels or wind turbines. A new gusher of natural gas from shale has the potential to transform U.S. energy production—that is, unless politicians, greens and the industry mess it up.

Only a decade ago Texas oil engineers hit upon the idea of combining two established technologies to release natural gas trapped in shale formations. Horizontal drilling—in which wells turn sideways after a certain depth—opens up big new production areas. Producers then use a 60-year-old technique called hydraulic fracturing—in which water, sand and chemicals are injected into the well at high pressure—to loosen the shale and release gas (and increasingly, oil).

The resulting boom is transforming America’s energy landscape. As recently as 2000, shale gas was 1% of America’s gas supplies; today it is 25%. Prior to the shale breakthrough, U.S. natural gas reserves were in decline, prices exceeded $15 per million British thermal units, and investors were building ports to import liquid natural gas. Today, proven reserves are the highest since 1971, prices have fallen close to $4 and ports are being retrofitted for LNG exports. Continue reading

Extend Diesel Fuel with Natural Gas for Savings

Save up to 30% on farm diesel bill by blending natural gas into intake air.
Compiled by Farm Futures staff
Published: Oct 14, 2011

C&E Clean Energy Solutions is marketing add-on kits for stationary diesel engines that make it possible to blend less-costly natural gas into the fuel mix and save money on diesel fuel.

Brian Carpenter, the “C” in C&E Clean Energy Solutions, says by running a diesel on a blend of 50% to 70% natural gas, the diesel fuel bill can be reduced by 30%.

“The engine is started on diesel fuel and brought up to operating temperature, then the natural gas supply is turned on. Our kit draws natural gas directly from the pipeline that feeds it through a nozzle into the engine’s intake system based on the engine’s manifold vacuum.

Blending natural gas into the intake air stream of a stationary diesel engine is a simple and money-saving possibility with Clean Energy Solution’s new fueling kit.

“Because compression heat alone is not enough to reliably ignite natural gas, a reduced amount of diesel is injected at the top of the compression stroke to complete the ignition and combustion of the air/natural gas/diesel mixture. The engine’s governor automatically meters the diesel fuel at a dramatically reduced rate,” he explains.

The kits work on both naturally-aspirated and turbo-charged engines, and allow the operator to run the engine on straight diesel or a diesel/natural gas blend to take advantage of any fluctuations in fuel prices. Continue reading

German Company designs LNG dual-fuel LNG transport vessels

Hamburg’s TECHNOLOG, as a partner of the German engineering alliance IPP, develops the first LNG-Dual-Fuel powered offshore transport vessel for JIANGSU HANTONG SHIP HEAVY INDUSTRY.

This means that the ship can be operated both with conventional fuels as well as with very environmentally friendly LNG (liquid natural gas). The corresponding contract has now been signed. Project-related co-operation agreements were made with engine manufacturer MAN Diesel & Turbo as well as with the classification society Germanischer Lloyd. The new ship design will reduce carbon dioxide (CO2) emissions by around 33 per cent compared to conventional powered new constructions.

“With our support, the HANTONG Group will be able to offer a technologically first-class vessel to the world market that also meets the most stringent international regulations on environmental protection”, explains Hans-Jürgen Voigt, Managing Director of TECHNOLOG. Continue reading

Will New York Ever Allow Hydraulic Fracturing?

The New York Post asks a good question today about hydraulic fracturing:

Will hydraulic fracturing ever come to New York?

And if it does, will it be sufficiently commonplace to actually boost Upstate’s sadly dilapidated economy?

These are fair questions — given that the Cuomo administration has slowed the approval process for the controversial natural-gas-extraction method to a crawl.

And now comes word, via a careful leak to The New York Times, that Team Cuomo is pushing a plan that would severely limit both the number of drilling permits and their location to just a few counties.

And even that assumes that the process itself is approved by the Department of Environmental Conservation — which is still a mighty big if.

The article notes rightly that many depressed counties are missing out on a huge economic boom that would almost certainly result from the dwilling of wells, “Meanwhile, Upstate remains in desperate need of the economic revival that a vigorous fracking effort would bring.”
You can read the full article here.

Read more:

Economic Impact of the Fayetteville Shale

The report says Fayetteville Shale activities of the oil and gas industry have been important to Arkansas because:

  • Average annual pay in the oil and gas extraction industry was $74,555 in 2010, twice the average pay of all industries in the state.
  • Mineral leases and royalty payments provide additional income to Arkansas residents. The study says that over the 2008-2011 period more than $1.2 billion in mineral
  • Continue reading

So Is There a CNG Station Near Me?

With all the interest generated by the Powerstroke CNG conversion project, some are wondering how and where they can buy compressed natural gas. Is there a CNG station near you?

Maybe. CNG Now! has an excellent site that shows you where every publicly available CNG fast fill station is in the whole United States.  There’s also an iPhone app and an Android app.

The Department of Energy also maintains a page with a list of both public and private stations, as well as those that are in the planning stage.

If not, you still have options. Home, business, or farm-based compression means that the investment in a CNG conversion will take a bit more time to pay for itself, but it still makes financial sense for a lot of individuals, businesses, and farms. The gas from one of these small compressors usually costs around half of the price of CNG at a public access station, and the slower fill times mean a more complete fill every time. C&E Clean Energy Solutions can help you decide if a small compressor makes financial sense for you. Contact them today.

Utility company execs see electricity rates rising

In a study by the construction firm Black & Veatch, utility executives see electricity rates rising:

Over 90% of the executives surveyed believe that rules requiring the use of more renewable energy and a cut in pollution from coal-fired power plants will lead to higher monthly utility bills for consumers.

Over half said these bills will rise significantly.

No definition of “slightly” or “significantly” was provided in the study. But Black & Veatch said “slightly” in industry parlance usually means a 1% to 3% increase, while significantly could mean up to 10% or so.

The executives surveyed also believe that the new rules on hydraulic fracturing will not cause a significant increase in natural gas prices. Continue reading