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

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)