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

Low gas costs may not be enough to spur large fertilizer expansion

Knoxville, Tennessee (Platts)–27Jan2012/224 pm EST/1924 GMT

While US natural gas prices below $3/MMBtu seem enough to entice any industrial user to expand their use of the fuel, for US fertilizer manufacturers the equation is not quite that simple.

Analysts said recently that a host of obstacles, such as permitting and long-term financial risk, would make construction of a new site untenable, but that hasn’t stopped the industry from resuscitating mothballed facilities or mulling expansions.

Natural gas typically represents 70% to 90% of the production cost for anhydrous ammonia — the key building block for nitrogen-based fertilizers, according to The Fertilizer Institute.

Several manufacturers have been coaxed into restarting plants and studying expansion,

Continue reading

Making a Stationary Diesel Run on Natural Gas

The company that sells the conversion kit for the Powerstroke conversion project, C&E Clean Energy Solutions, also sells kits for stationary diesels to enable them to run off pipeline gas.  Here is a Davey 3600 psi air compressor which is powered by a 17 h.p. Hatz air cooled diesel engine. The engine is fitted with a small version of our stationary diesel natural gas conversion kit.

When the video starts, you can hear the engine and compressor running in the background. Both units are on and the engine is under pretty close to its max load for this particular application. The compressor might demand a little more from the engine as it gets closer to that 3600 psi number, but this is about as hard as it ever works right here. When the video starts, the unit is already running on a mixture of natural gas and diesel fuel.

I then show the digital pyrometer and the master switch for the natural gas kit. When I shut the switch off, you hear the motor do two things: slow down, and get noisier. It’s doing that because it’s going back to running on straight diesel fuel and the injectors are starting to deliver more diesel fuel as the governor compensates for the lost natural gas fuel.

Because I’m using this unit as a demonstration platform and I need it to be mobile and have a mobile fuel supply. So I had to find a way to run it off of compressed natural gas. Because it’s air-cooled and naturally aspirated, our CNG unit wouldn’t work. So I had to cobble a system to make it run off compressed gas taken from the tank in my truck. I put a 300 psi rated valve and air fittings off the low pressure side of the 3600 psi-250 psi hot-water-heated regulator on my truck’s conversion kit. The gas then passes through an air compressor pressure regulator where I bump it down a bit more. Then it passes through an oil-resistant air hose, and is patched into a two stage RV propane regulator. That steps it down from 250 to 1/2 psi.

There are two difficulties in making that work. One is just the volume of gas I’m able to move through those small orifices, even though it’s under quite a bit of pressure. The other problem is that I have moisture in my gas and I get icing from the rapid drop in temperature. That’s happened to me a time or two and has made a couple of messes. I found that dialing back the pressure gives me more run time before the icing starts. As a result of that, I’m not able to substitute as much gas as the engine will actually take. I estimate I’m running on 30-40% fuel substitution right now. That’s enough to make a noticeable difference when the gas is turned on, but it’s not my maximum possible fuel substitution by any means.

When I’m running it on a 3/4″ gas line at 1/2 PSI, I estimate I’m able to run 65% or 70% gaseous fuel substitution.

While the CNG kit for pickups and tractors, etc, requires a turbocharged engine to work, the stationary kit will work on both turbo and naturally aspirated engines. It will work on generators, irrigators, well pumps, feed grinders, saw mills, just about anything that you use a stationary diesel for.

The main point of this demonstration is this: Depending on the price of your natural gas and diesel fuel, you can save a lot of money on diesel fuel, or you can save a whole lot of money on diesel fuel. Even at 50% substitution (the low end of what is possible) you are substituting a fuel that costs around $1 per gallon, (or less) for one that costs around $3-$3.60 per gallon.

If you burn 6 gallons an hour of straight diesel fuel, and your diesel fuel costs $3.20 per gallon, you’re spending $19.20 per operating hour.

If you substitute 50% of the fuel with natural gas, you’re spending $9.60 per hour on diesel and $3 per hour on natural gas, cutting your cost per hour of operation to $12.60. That’s a savings of almost $7 an hour.

As I said before, 50% substitution is generally the minimum benchmark. If you’re running your diesel under 90-95% load, you’re not going to be able to substitute 50%. Maybe more like 30-40% substitution in that case, but most guys don’t run their engines that hard.

If you’re running a lighter load, then you can get 75% substitution. On that same 6 gallon per hour motor, you’d be burning 1.5 gallons of diesel per hour. At $3.20 per gallon, that’s $4.80 worth of diesel fuel and $4.50 worth of natural gas, giving you a $9.30 per hour operating cost.

That’s a savings of  almost $10 per operating hour. The unit that substitutes 3 gallons per hour costs $1540 if you buy the pyrometer with the overtemp protection. That price includes shipping.

At $10 per hour savings, that unit will pay for itself in fuel savings in 154 operating hours. If you irrigate 800 hours per season, you get to start putting $10 per hour in your pocket less than 1/4 of the way through the irrigation season.

It’s a pretty simple equation. Spend less money on fuel. Make more profit on your crop.

Steyr Presents Dedicated Natural Gas Tractor

Steyr Profi 4135 operates on CNG or biomethane.

Under the ‘Steyr’ brand, CNH Global N.V., a worldwide manufacturer of agricultural and construction machinery majority-owned by Fiat S.p.A., has presented what they say is the first production tractor powered by natural gas, at the recent Agritechnica 2011 exhibition. Based on the Profi 6125 model, the new Steyr Profi 4135 Natural Power is equipped with a turbocharged dedicated (mono-fuel) compressed natural gas (CNG) engine, made by Fiat Powertrain Technologies (FPT), another Fiat group company.

The engine is a 3.0 litre, four-cylinder unit, producing 100 kW/136 hp rated – 105 kW/143 hp max power and a maximum torque of 542 Nm at transmission input shaft.

The Profi 4135 Natural Power is equipped with special mono-fuel engine to deliver energy efficiency and clean exhaust emissions. Steyr says there are several arguments in favour of using monovalent natural gas tractors for agricultural purposes. In addition to much lower operating costs, there are also the favourable environmental aspects to take into consideration. Methane has the lowest carbon content of any fuels, it burns odour-free and with far fewer emissions –particulates are as much as 99 % lower. As the tractor can be powered using refined biogas (biomethane), Steyr engineers point out that this kind of drive concept is particularly suited to those farms that have their own biogas plants.

“Natural gas, or biogas, is in many ways the better choice for agricultural applications, as it produces 25 % lower CO2 emissions and 95 % less nitrous oxide when compared with diesel combustion,” explains Global Product Marketing Manager at Steyr for monovalent natural gas concepts.

“We believe there will be a number of potential applications in future for this clean engine technology; in the municipal sector, for example, and for agricultural operations that have a biogas plant and can use ‘fuel from field’ to power a vehicle fleet”.

The storage of gas, divided in nine fuel tanks, has a capacity of 300 liters in total, which are integrated into the tractor’s bodywork.

The tractor is fitted with a 17 x 16 four-range powershift transmission and has a top speed of 50 kph.

Market launch is scheduled for the 2015.

The predecessor to the Profi 4135, the CVT 6195, was developed as a dual-fuel tractor, reducing diesel costs by approximately 40% and CO2 emissions by 20%.

(This article compiled using information from Steyr press releases)

Natural Gas As A Farm Fuel

By Brian Carpenter of C&E Clean Energy Solutions

It’s long been true that the farmer doesn’t just produce for a local or regional market, but rather for an international market. Because this is truer today than ever before, the farmer must be keenly aware of the international political, business, and monetary environment. What happens in Europe or China affects the farmer’s bottom line.

There are three factors which ensure that natural gas will play a prominent role as an agricultural fuel in the near future.

The first factor relates to the international currency situation. We live in a time when there is great instability in the world monetary system. Continue reading