Why Natural Gas for Transportation
You’ve heard it a lot recently, the U.S.A. urgently needs a new alternative energy policy with solutions to reduce our dependency on foreign sources of energy and implement an alternative transportation fuel that is reliable, safe, and affordable. In fact, this has been the political cry of all eight presidents since Richard Nixon, yet none of them has produced a solid energy policy. As of the end of 2013, our country imports approximately $350,000,000,000 per year in crude oil (that’s $350 BILLION DOLLARS). This is more than double what the federal government spends on education.
The transportation sector uses the majority of our imported oil. Vehicles consumed 4.7 billion barrels of petroleum in 2010. This is more than the total 4.2 billion barrels of petroleum the country imported that year. Increasing use of domestic natural gas as a clean alternative fuel will help prevent North America from relying on regions of the world whose interests are against our own. Given events in the Middle East like the oil embargos of 1974 and 1979, the Gulf War of 1990-1991 and now the prolonged conflict in the Middle East, OPEC’s sustained control of petroleum supplies holds us hostage with the price of gasoline and Diesel at the pump.
It’s not just the price of transportation fuel at the pump that should concern us. The hidden costs we don’t see include energy security to help protect OPEC ports shipping crude oil to our country. You can see the costs of this premium in decreased national economic output, loss of national gross product, economic strain and volatility, expanded trade imbalance, oil supply shocks, prices spikes, supply disruption, and import costs.
Fortunately, our overseas dependency on foreign sources of energy from geopolitically unstable regions of the world is a problem we are resolving. We already recycle a major portion of what we used to send to dumps, we tote canvas bags to the grocery store, and we’re told to run clothes washers and driers and other appliances in evening “off-peak” hours. Doesn’t it logically follow then that the transportation industry offers an incredible opportunity to impact our country, environment, and wallet with one purchasing decision?
North America has a better energy source inside its borders and the U.S. is overtaking Saudi Arabia and Russia as the world’s largest energy producer. In addition to reducing fuel consumption with higher CAFE standards, we are accelerating our energy independence by augmenting our petroleum supply with North American natural gas. A suite of ~ 100 different NGV models and the rapidly-developing natural gas fueling infrastructure is one of the most effective solutions to our energy problems.
In addition, every transportation fuel carries a societal cost based on impacts from criteria pollutant emissions and another such cost results from greenhouse gas (“GHG”) emissions. Criteria pollutants include Nitrogen Oxides (“NOx”, or smog), Carbon Monoxide (“CO”, the gaseous product of combustion that displaces oxygen in a garage which can cause asphyxiation), Volatile Organic Compounds (“VOCs”), and Particle Matter (“PM”, which adversely affects asthma and emphysema, and many others that suffer respiratory ailments). Monetization of these societal costs provides a means to assess the societal benefits of the alternative fuels being considered. Across multiple vehicle segments, the societal costs for NGVs are lower than those for conventional transportation fuels. According the NGVA report, the net savings (of direct and societal costs) exceed $50,000 for some high fuel-use applications and are comparable to saving ~ 15% of vehicle lifetime costs. The savings for lower fuel-use applications may be less but they are still significant. The more we increase the use of domestic natural gas, the more these societal costs can be reduced.
Natural gas is not a new fuel source. In fact, we’ve used natural gas for over 2500 years since the Chinese discovered natural gas ~ 600 BC. Around the first century AD, the first recorded use of natural gas in the home occurred in Persia (now Iran). In North America, natural gas use dates back as early as 1626.
Natural gas heats our homes, businesses, water and food. Natural gas also has many industrial applications such as melting steel, melting glass, making chemicals and generating electricity. In fact, natural gas already accounts for 23.4% of the U.S. energy supply.
Natural gas has served as a transportation fuel for more than six decades, primarily in commercial vehicles like municipal service trucks, school buses, transit bus agencies, refuse trucks and trucking fleets that return to a central base at the end of a day. Fleet operators can have CNG fueling stations built and operated at their central stations or refuel at ever-increasing availability of public-access stations.
The 21st century is the century for natural gas. Recent explorations have found abundant natural gas supplies in North America, much more plentiful than petroleum supplies. Current global supply of natural gas could sustain world demand at current consumption for 121 years vs. 46 years for petroleum. And although the U.S.A. uses more energy than any other country, we have over 100 year supply within our own borders to support all markets as they expand. Finally, as we transition to CNG as our transportation fuel, our domestic crude oil reserves to support uses in lubricants, cosmetics, pharmaceuticals, petro-chemicals and elements, asphalts and waxes last longer!
Despite the lack of an extensive natural gas refueling infrastructure for the public compared to gasoline and Diesel stations, consumption of CNG and LNG as a transportation fuel has increased steadily since 1997. During this period, the price of petroleum has risen while the price of natural gas has fallen and this trend continues. Over the next 25 years, natural gas is expected to become even cheaper relative to petroleum. The fuel cost differential between natural gas and gasoline is expected to reach an average of over $2.00 per gasoline gallon equivalent (GGE) and over $3.00 per diesel gallon equivalent (DGE) over the next couple of years. For the average North American, who fills up his or her tank weekly, refueling with natural gas rather than petroleum would save approximately $32 per gas station visit. In a year, that’s a $1,664 savings. For the operator of a trucking company that uses 10,000 to 20,000 DGE of fuel per year per truck, the savings can range from $20,000 to $40,000 per year per truck! Talk about adding to your company’s bottom line! Try to get that kind of savings to fleet operators by installing wind deflectors and GPS driver tracking devices, optimizing tire pressure, mandating right-turn-only fleet routes, and other modern solutions for reducing cost per mile.
Expansion of a natural gas refueling infrastructure creates domestic jobs. Increasing the use of natural gas in transportation has significant potential to impact national employment by displacing foreign petroleum jobs, establishing new manufacturing and construction opportunities, and stimulating economy-wide spending through fuel savings to the consumer. Some jobs may be permanent, such as those established to support increased economy-wide spending, or temporary, such as those established for the duration of a particular construction project. Expanding North America’s fueling infrastructure would create a cumulative total of over 3.7 million jobs by 2035. While some of these jobs would be temporary, they provide opportunities that Americans need today. More jobs mean a healthier economy. More savings to business that ship goods or transport people means lower prices on the shelves and an overall lower cost of living. More jobs and reduced costs will play a significant roll in maintaining a healthy national economy.
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EXERPTS FROM NGVA REPORT: NGV INDUSTRY OVERVIEW