CNG or LNG, that is the question
Joe Wilson is CEO of Infinity Resource Group, Inc., a professional mineral rights consulting firm in Parkersburg, W.Va., and a Registered Landman. David Pearl is managing director of a CNG patent holding company and president of a CNG fuel island development company. Your questions are welcomed by calling 412-535-9200 or by e-mailing joe@irg-energy.com.
A reader from Florida sent us an article entitled: 鈥淲hen Will We Drive Natural Gas Cars?鈥� The article was more rhetorical than informative, and the reader wanted our opinion.
The short answer is: 鈥淛ust as soon as natural gas becomes as available and convenient to dispense as gasoline or diesel.鈥� Rather simple, right? Well, maybe not. There are a thousand details that any business must consider before venturing forth. And the threshold question is: Which type of natural gas fuel will Americans prefer: will it be CNG or will it be LNG?
Natural gas (NG) in its natural state cannot be used as a fuel for motor vehicles. Natural gas is a gaseous material and in order to move it from one place to another, such as from a fuel dispenser into a vehicle fuel tank, it must be in a form suitable for safe and efficient fuel storage and engine combustion; the gas must either be compressed or liquefied.
When NG is turned into a liquid, it is known as liquefied natural gas, or LNG. In order to liquefy natural gas, you have to make it cold 鈥� really cold 鈥� like minus 265 degrees Fahrenheit! But LNG is easy to dispense because, as a liquid, it emulates conventional gasoline or diesel fuels. However, because LNG is so cold, you can get injured if the liquefied gas splatters and comes into contact with your skin, eyes or face. Some truck fleets have opted for LNG because liquid transfer technology is inexpensive and is dispensed into a truck蘑菇视频 gas tank like diesel or gasoline. The main drawback is that drivers must wear special gloves, googles and a face mask every time they fill-up.
The alternative to LNG is compressed natural gas or CNG. The gas remains in a gaseous state but in order to store it and move it from one place to another, it must be compressed. Through compression, the gas becomes dense, which is required for engines to burn the fuel. Most vehicle tanks that accept CNG can handle 3600 or more pounds of pressure per square inch. Compressors are very expensive to purchase, operate and maintain. CNG stations use compression as the primary means of extracting gas from pipelines and dispensing into vehicles. Typically compressors cost $500,000 and maintenance costs are high. And the cost of electricity to run the compressors can be quite expensive.
Yet despite the high cost of CNG equipment, CNG is less expensive than LNG. The reason for this is the high cost of cryogenic storage on vehicles and the major infrastructure requirement of LNG dispensing stations, production plants and transportation facilities. For maximum LNG profitability, cryogenic facilities should be built within a 4 hour driving radius of each other.
Due to the high cost of natural gas stations, the business community is concentrating its initial efforts in selling NG to fleets because they consume lots of fuel and the profitability on high volume sales quickly defrays the costs of expensive NG stations. Also many municipalities throughout the country are converting their fleets to NG. Fuel costs are often a huge percentage of a municipality蘑菇视频 annual budget, and fuel cost savings is an ideal way to balance budgets and to use tax dollars for better purposes.
The largest obstacle today for fleets interested in adopting 鈥� or at least evaluating 鈥� a natural gas truck is the nation蘑菇视频 lack of infrastructure. Both CNG and LNG come from the same feedstock: methane. It蘑菇视频 really just a question of storage. CNG tanks require pressurization systems 鈥� making them more costly 鈥� and take up more space on truck frame rails then their LNG counterparts. However, converting fleets to accept CNG is much further along than it was a couple years ago, with lighter weight tanks and more effective storage systems that are now on the market.
The CNG process is very simple; it is similar to connecting your gas grill line. No protective clothing is required. Traditionally CNG stations have to connect to the gas pipeline grid. However there are technologies emerging that will allow a CNG station to be away from the grid.
Also LNG refueling times are similar to refueling diesel trucks. While many CNG trucks 鈥渟low fill鈥� overnight, 鈥渇ast fill鈥� methods for fueling CNG trucks now exist. Technological advances are beginning to make CNG the preferred fuel over LNG. In fact, Anheuser-Busch at its Houston Texas distribution facility recently made the decision to retire its present fleet of 66 diesel engine trucks from heavy hauling duty (thus keeping 2,000 tons of carbon dioxide out of the atmosphere every year) and will use trucks powered by CNG, which will save the company serious money.
So in answer to our reader蘑菇视频 question, 鈥淲hen Will We Drive Natural Gas Cars?鈥�, we believe the answer is a combination of various factors which include: the acceptance of NG by fleets and municipalities which are driven by economic savings, followed by the opening of NG fuel islands around the country making NG available to everyone, plus advances in technology geared to lowering the entry price for converting cars to accept NG.
All of this will take time and commitment from the public demanding change both from elected leaders and businesses. The ingredients of an American groundswell are in place: people are tired of being at the mercy of fuel price instability and fuel availability caused by factors beyond their control; and local economies have been negatively impacted by sustained high fuel prices.
As residents of Appalachia and other parts of the country know, there is plenty of NG in the US, locally owned and ready to bolster local economies. If you are fortunate enough to own mineral rights, you stand to make a lot of money by selling or leasing these rights to gas companies that will sell your gas to American businesses and municipalities and eventually to regular drivers. In our opinion, it蘑菇视频 only a question of time before we all will be driving cars powered by natural gas.
In determining whether a landowner owns valuable mineral rights, it is advisable to seek professional advice from a mineral rights consultant for an evaluation of the mineral rights. Before making any decision regarding the disposition of your mineral rights, it is always advisable to consult your lawyer and tax adviser.