Saturday, February 14, 2009

Two Words, T. Boone Pickens! Wait.....uhhh

CNG for Vehicle transportation

Being an engineer who has grown up around and worked in the natural gas industry I have always been curious about the prospect for using natural gas for vehicle transportation. According to the EIA in 2007 the United States produced about 19.2 trillion cubic feet (TCF) of natural gas and imported about 4.6 TCF. Of the 4.6 TCF imported about 80% came from Canada. Since 1970 dry natural gas production has been down but since 1980 and in recent years production has been up. This is because of price regulations in the 1970’s drove down production and an increase in the production of natural gas plant liquids has reduced the amount of dry natural gas that makes it to market (See figure 5.10 and 6.2 in the EIA’s 2007 Annual energy review). The recent increase in production has been due to advancements in recovery technology.

The consumption of natural gas for vehicle fuel use has been increasing steadily since 1992 from 0.02 TCF to 0.26 TCF per year in 2007. Today the price for of natural gas today is $4.46/MMBTU (cnn.com/money). Compare this to $1.21 /gallon of gasoline which corresponds to about $9.68/MMBTU. On the face of it appears that energy from natural gas is about half the price as energy from gasoline. However, this isn’t exactly true because car engines that run on natural gas are not very efficient. To illustrate this I would like to compare the Honda Civic CNG vs. the regular Honda Civic using data from www.fueleconomy.gov. If we compute the amount of MMBTU used per mile driven for both vehicles the gasoline Honda is about 5.7% more fuel efficient. This makes the CNG Civic about 26% more expensive to operate than the gasoline Civic.

In order for CNG to be cost effective as a vehicle fuel the price of natural gas must be cheaper relative to oil than it is today and engine efficiency must be fixed. Engine efficiency can be fixed by designing dedicated natural gas engines. Most engines used in CNG vehicles today are gasoline engines that have simply changed the fuel compression ratio. A true natural gas engine needs an independent design to be more efficient.

Also there currently isn’t enough natural gas production in the USA to fuel every car while retaining it as a power plant and heating fuel. The United States uses 178 billion MMBTU per year for motor gasoline ( EIA annual review Figure 5.11).This would correspond to about 17 TCF of natural gas. That would displace almost all the natural gas produced in the USA. This last summer T. Boone Pickens (2 words) advocated a plan that uses natural gas to fuel 18 wheeler trucks and offset the additional fuel consumption by building wind or nuclear power plants (www.pickensplan.com) . Overall, CNG for widespread use doesn’t seem like a viable alternative to gasoline unless you can replace the amount of natural gas that is diverted from power plants. Otherwise foreign gas doesn’t look much better than foreign oil. However, it could become important in the heavy transport sector.

P.S.
There are companies that have designed dedicated CNG engines if you interested visit www.westport.com. They say that their design is 25% more efficient than spark plug CNG engines but they don’t tell you any concrete numbers.

5 comments:

Oil Man said...

Interesting discussion about natural gas, but I am confused by your numbers on fuel efficiency. Using the fueleconomy.gov comparison tool, it appears that the 2009 Civic CNG gets 28 MPG combined average while the standard gasoline Civic gets 29 MPG. That difference in efficiency is trivial, but the government's website did say that CNG costs $2.55/gallon on average compared to $1.93/gallon for gasoline. Though nat gas trades lower than crude per BTU, I assume that the distribution costs for CNG are higher because there is less competition and lower demand.

That being said, I still believe natural gas will play a crucial role in our electricity future going forward because 1) it is comparatively clean burning and emits roughly half the CO2 per btu as coal (I could be wrong because I don’t have the source off the top of my head) 2) electricity generation from nat gas is very flexible and robust (quick start up times for peaking, and use is not limited by lack of wind or sunshine) 3) the infrastructure is basic and simple to build (just strap a generator to a jet engine; no cooling pond and 30 story towers required), 4) new LNG technologies make global transport economical, so the US can depend on foreign nations, particularly western-friendly Qatar, to smooth out spikes in our domestic demand, 5)many new LNG regasification terminals are multi-billion dollar investments that are majority-owned by Qatar, so the state gas companies will have every incentive to keep the gas flowing to repay their investment. (as opposed to oil where crude tankers can easily sail to whoever is the highest bidder, or just sit in the ocean waiting for the prices to go up)

Unlike Pickens, I think US people will value reducing GHG emissions while keeping prices low over keeping our energy exclusively domestic. In my opinion, natural gas has a very promising future in industries that will be affected by the impending cap and trade system.

John D. said...

Convert Everything to a BTU basis gasoline has a density of 0.125 MMBTU/gallon. MPG doesn't account for the different energy densities.

contango said...

I like the post. One thing that I would like to add is that we should not discount the domestic supply of Natural Gas. Most of the domestic reserve numbers for NG do not account for the developing resource plays (Haynesville, Marcellus, Bakken ...) because these reserves cannot yet be classified as "proved." Having worked on directional drilling applications for several years, I can assure you that developing these fields will become more economical and more of these reserves will be converted to PDP.

Where can I get gasoline for $1.21/gallon? Is this wholesale?

Michael E. Webber, Ph.D. said...

Very interesting post. Don't forget that in addition to the price per BTU aspects of natural gas there are other compelling reasons to use it: 1) lower GHGs per mile, and 2) lower air pollution. Those might be reason enough!

David Wogan said...

Also worth noting is there are reasons we use diesel fuel for trucking. It has a high energy density and diesel engines produce a lot of low end torque, which is what you want when hauling trailers around. I'm not sure how using natural gas-powered trucks would actually work. Does anyone know? Can you get the same performance out of a natural gas powered vehicle or truck?