Here, in the latest of a series of blogs by Nick Grealy, director of energy consultancy No Hot Air, the increasing use of vehicles powered by natural gas is examined. A particularly hot topic, it will also be discussed in-depth during the LNG for Transport technical session, within the Gastech conference programme.
Thanks to the sudden emergence of shale gas, supply promises to no longer be a problem in both pipeline and LNG markets. Today’s issue is something many in the gas industry haven’t had to deal with since the earliest days of their local industries - demand.
Back in the good old days of peak gas, about five years ago to the industry and only a couple of years back for customers, creating demand for the product was barely considered. Today, we’ve not only got to dust off the marketing books in how to tie in the old customers, but it’s necessary to start being creative about finding new ones. The lowest hanging fruit is paradoxically one that suppliers have often ignored and with very little customer awareness, natural gas transportation.
Natural Gas Passenger Vehicles are big in some niche markets: Iran, Pakistan, Argentina , Brazil and India, the only markets with over a million vehicles each and natural gas powered tuk-tuks all over the streets of Asia these days. The significance of natural gas in the trucking sector is only starting to be realised in some key markets.
The gas industry needs to be selling the benefits of NGVs to as wide a range of end users as possible, and pushing out the good news to governments. This means forging alliances with motor manufacturers, end-users, business groups and green NGOs. If we go back to the future, we can learn how the oil industry had to create demand via building a natural gas fuel retail sector. We forget today how even the coal industry had to create demand by partnerships with the steel and chemical industries. The railway industry was often built by the same people who ran coalmines is an example. Similarly, in the nineteen thirties, even the electricity industry had to have mass-scale marketing campaigns based on retail stores selling objects as mundane today as toasters and irons. Today, the billions spent on LNG terminals could require similar investments in creating demand and the NGV sector is an obvious target.
Companies like Chesapeake, the largest US shale gas independent, see this via their partnership to put natural gas into the forecourts of 150 Pilot - Flying J Truck Stops across North America.
The chicken and egg question of building a supply infrastructure before vehicles arrive is not an insurmountable question. The Chesapeake fuel subsidiary is starting with a $150 million investment - almost back of the sofa money for the LNG construction industry. The 1% of vehicles using 20% of fuel fill up at a limited number of locations on the highway network. Unlike electric vehicles, no one needs to have any “range anxiety” in an industry where most vehicles go within existing routes. In the UK for example, 95% of the trucking industry could be supplied from as little as 50 fueling areas. Even better, many of those can be supplied from within a mile of an existing gas grid.
NGVs have only been a niche product until now because it’s only with the emergence of abundant and ubiquitous shale gas that we can seriously consider implementing them. I see a massive potential for NGV to kill two birds with one stone: Creating a multi billion industry and supporting gas prices in world where everyone can make money at a global long range price of $4 to $6 MMBTU.
An often overlooked advantage of NGV trucking is that it has no ‘green alternative’. During my work with green NGO’s in Europe, even the most ardent anti fossil fuel campaigners are surprised to learn about NGVs. An electric truck would need its weight in batteries to move. This new market won’t stop at the roadside. LNG replacement of bunker fuel for shipping is a looming market and LNG rail locomotives and mining equipment trials are under way.
Natural gas vehicles have a great future ahead of them. Car drivers will pass by enough truck stops seeing natural gas at half price to create demand for NGV personal transportation. There are few models available today, but already in the US we see demand for natural gas pick-ups being driven by the natural gas industry themselves. A killer app for cars is the potential for home fueling via domestic supply. In the US Eaton Corp and General Electric are planning a $500 home fueling system. Plug in your car and it refuels overnight. This is far more workable that electric cars, already being yawned at by consumers also suffering from range anxiety. Think of all money and calories saved from not buying those donuts and snacks at the filling station shop, and natural gas vehicles are good not only for the environment but also for your environment.
Sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.