The Growing Natural Gas Economy
How natural gas will power the future of Louisiana is yet to be seen
NEW ORLEANS, La. – Louisiana’s natural gas has given the state an economic advantage over its neighbors, but the implementation of a thriving natural gas economy is still in its infancy.
Although people use natural gas to heat and power parts of their homes, the end game for natural gas producers is to convert Americans away from vehicles running on increasingly expensive gasoline, and incentivizing a transition to clean burning natural gas.
Currently, the U.S. has 112,000 natural gas vehicles (NGVs) on the road, while there are 13 million NGVs operating worldwide.
According to Gas and Vehicle Report, the U.S. currently ranks 14th worldwide for NGVs, well behind top ranked Pakistan, who currently has 2.9 million NGVs, and China, who ranked sixth with over 750,000 NGVs.
Passenger vehicles are an extremely small part of the U.S. market, with only one dedicated natural gas powered vehicle – the Honda Civic GX.
Gifford Briggs, vice president of the Louisiana Oil and Gas Association, doesn’t think that natural gas powered passenger vehicles will ever go to mass market in the same fashion as gasoline, but contends that there are opportunities converting city buses and similar fleets.
NGV for America, an organization representing over 100 U.S. companies promoting a switch to natural gas and hydrogen fuels, agrees with Briggs, stating that the fastest growing segment is in waste-collection vehicles, which accounts for 12 percent of total natural gas powered vehicles.
David Bieler, chairman of the Geology Department at Centenary College, says that natural gas research and development has been fixated on mass transit.
Bieler contends that buses, which are primarily powered by diesel fuel and operate in stop-and-go traffic, were an easy target for a cleaner fuel source.
Concurrently, NGV for America reported that transit buses now account for 62 percent of all vehicular natural gas uses.
In addition, the American Public Transit Association reported that 26 percent of all new transit bus orders in 2009 were for natural gas.
Shreveport’s own public transportation system, SporTran, currently runs 14 of its 46 buses on natural gas.
Gene Eddy, manager at SporTran, claims that it will be another 10 years before the entire fleet is converted to natural gas.
When operating locally the natural gas powered buses have no problems refueling, however a lack of fuel station infrastructure located between the plant that assembles the buses and their final destination poses a major problem for the NGV revolution.
Briggs says that a major hurdle for building infrastructure is the additional real estate necessary, since natural gas equipment, unlike gasoline, currently cannot be stored underground.
“For natural gas stations, storage tanks, dryers, compressors and other equipment need to be stored above ground, which takes a lot more real estate to put a station in. For a highway truck stop it wont be a problem, but for every gas station on the highway or in the middle of a city, that creates a problem.”
NGV for America claims that there are roughly 1,000 NGV fuel stations in the U.S., but only half are open to the public.
At the moment, Louisiana has five public and four private natural gas fueling stations, with an additional station opening in Alexandria in January.
Chesapeake Energy, the world’s second largest producer of natural gas, recently announced plans to fund 150 liquefied natural gas fueling stations along major U.S. corridors.
Although the infrastructure is yet to be seen, Chesapeake Energy spokeswoman Katie McCullin contends that a transition to natural gas will be beneficial for consumers.
“If Americans used natural gas as a primary transport fuel, it would save consumers about $2 on every single gallon of gas.”
Non-vehicle powered natural gas equipment, such as Dixie Chopper’s new compressed natural gas mower the Eco-Eagle, will likely be the next foothold for natural gas.
Unconventional drilling methods, such as horizontal drilling and hydraulic fracturing, have caused the price of natural gas to drop from an average of $7/million British thermal units (Btu) in 2005 to roughly $4/million Btu in 2011.
In addition, the International Energy Agency claims that the global supply of natural gas is on the rise as a result of unconventional production, and that oversupply could continue until 2030.
Robert Ross is a researcher and social media strategist with the Pelican Institute for Public Policy. He can be contacted at email@example.com, and you can follow him on twitter.