Industry Market Trends
Is the Growing U.S. Natural Gas Infrastructure a Transportation Transformation?
August 21, 2013
About 30,000 natural-gas fueling stations will be operating worldwide by 2020, highlighting the increasing potential for natural gas as a transportation fuel in the United States and globally, asserts a new study by Navigant Research. However, a study this year by the National Academy of Sciences (NAS) identified a "lack of refueling infrastructure" as one of the chief barriers to development of natural-gas vehicle (NGV) transportation. Such infrastructure -- getting natural gas from pipeline to fuel tank -- "is in its early stage of development and requires massive expansion," NAS maintains. In the meantime, "Regional, clustered development will remain the preferred model." The current boom in shale gas production and resultant low prices are driving the market penetration of natural gas as a transportation fuel. NGVs can be fueled by gas in two basic forms, compressed (CNG) or liquefied (LNG). LNG is currently used primarily for heavy-duty trucks. Prices fluctuate, but CNG tends to be $1 or $2 cheaper than an equivalent gallon of gasoline. The U.S. Energy Information Administration estimates yearly world consumption of natural gas at 117.0 trillion cu ft in 2013 and projects that this will grow to 131.5 trillion by 2020. U.S. consumption stands at 25.3 trillion cu ft for 2013, set to grow to 26.3 trillion by 2020. The agency says that about 3 percent of transportation energy in the U.S. comes from natural gas, as opposed to 93 percent from petroleum. In turn, transportation uses about 3 percent of the natural-gas energy consumed in the U.S. High-oil-price scenarios could drive that to 4 percent by 2020 and to more than 10 percent by 2040. The number of NGVs on the road is hard to pin down. The industry group Natural Gas Vehicles for America (NGVAmerica) estimates 120,000 NGVs in the U.S. and 15.2 million worldwide. However, researchers at GE last year came up with a figure of more than 250,000 in the U.S. The NGV Journal estimates over 17.6 million NGVs worldwide. Most NGVs on U.S. roads are fleet vehicles, such as buses and delivery trucks, but increasing numbers of CNG-capable passenger vehicles have come on the market in recent years. The core natural-gas infrastructure in the U.S. consists of a 305,000-mile network of pipelines owned by pipeline companies. EIA says transfer of natural gas is provided by means of "more than 11,000 delivery points, 5,000 receipt points and 1,400 interconnection points." Compressor stations maintain pressure on the pipeline network to keep supplies moving forward. NGV Journal says 21,660 NGV refueling stations are now operating globally, with 1,564 under development. The U.S. has 1,438. The U.S. Dept. of Energy (DOE) identifies two types of CNG refueling stations, fast-fill and time-fill. Fast-fill stations are most suitable for retail fueling of light-duty vehicles. They take in gas from a local utility line, compress it and store it on-site for dispensing. Time-fill stations are used mostly for fleet vehicles but also have small-scale applications for home refueling stations. LNG refueling stations are built much like gasoline and diesel stations and deliver natural gas as a supercooled liquid. To identify some of the important trends in development of North American natural-gas refueling infrastructure, IMT spoke to Patric Rayburn, representative for Clean Energy Fuels. As one of the largest providers of natural-gas fuel for transportation in North America, the firm operates some 360 CNG and LNG refueling stations in the U.S. and Canada and fuels over 30,000 vehicles a day. Rayburn pointed to the efforts of commercial players who are taking the initiative to build natural-gas transportation infrastructure. His company is rolling out the first phase of its America's Natural Gas Highway (ANGH), which Rayburn said "has made [LNG-fueled] trucking coast-to-coast and border-to-border possible today." Clean Energy completed 70 stations in 2012 with 30 to 50 scheduled for this year. "There is a national pipeline that in many cases we draw from, compress, and make the natural gas available for vehicles via our stations," he said. "We also have a fleet of vehicles that we use to truck LNG to customers and stations where the pipeline is not accessible or practical." The LNG "can be used as LNG or can be converted back to CNG." While the ANGH stations are primarily LNG stations designed for trucking, "each one has the capability to add CNG should there be demand," he explained. At a recent transportation energy summit hosted by the National Journal, Clean Energy CEO Andrew J. Littlefair commended efforts in Congress to clear regulatory hurdles and tax barriers to development of natural-gas infrastructure. Referring to infrastructure efforts such as those being made by his company, Littlefair said, "Our country must seize the moment. The private sector isn't waiting. We're seeing them embrace alternative technologies like natural gas ... and they're recognizing that using cleaner American natural gas is an obvious choice to get away from foreign and often dirtier fuels."