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NatGas Fueling Still Said Attractive, Even with Low-Priced Diesel

Truck and bus fleet operators are continuing to switch to compressed natural gas (CNG) or liquefied natural gas (LNG) to fuel their vehicles, even as diesel attempts to muscle in with low prices, according to a recent report.

Natural gas vehicle (NGV) proponents may have weathered the competitive pressure the past almost three years in the wake of the global crude oil price crash in the second half of 2014, according to RBN Energy LLC's Housley Carr, who recently posted an assessment.

Lower diesel prices "have taken some wind out of the sails of the CNG-in-transportation trend," but companies and transit systems are continuing to invest in CNG and fueling infrastructure.

"And the investment may ramp up again if diesel prices return to levels well above the price of CNG," he said.

Carr examined the incentives behind CNG and LNG investments, noting that it is for environmental and economic reasons, but economics weakened for a while as diesel prices fell. Government mandates have provided a third incentive for NGVs.

To get an apples-to-apples comparison, Carr said it is necessary "to account for the fact that a gallon of diesel packs more BTUs than a gallon of gasoline, CNG or LNG." He compared diesel to CNG because each fuel is the most common in the truck and transit sectors. Diesel is the most common overall, and CNG is the most common diesel alternative these days, he said.

"Since October 2015, diesel and CNG prices have been within spitting distance of each other, and in the first half of 2016 (when crude prices bottomed out), diesel actually cost less than CNG for the first time in recent memory," said Carr.

He found that even with less pure economic incentives for fleets to move to natural gas, the truck and transit fleets continue to expand their use because of the commitments to lower greenhouse gas (GHG) emissions. There now are more than 1,700 public and private fueling stations nationwide.

For government mandates, Carr cited the ports of Long Beach and Los Angeles in Southern California where in November officials launched an updated Clean Air Action Plan that calls for near-zero-emissions vehicles starting in 2020 and setting steep fees for trucks that continue to use diesel.

In British Columbia (BC), the provincial government is providing incentives to encourage the use of natural gas as a transportation fuel, including renewable natural gas (RNG) as outlined last week in a webinar hosted by the Northwest Gas Association (NWGA) in Oregon.

The BC government provides NGV grants, and participants can double their incentives when they elect to use RNG in the vehicles, said policy analyst Jennifer Davison, who works for the BC Ministry of Energy, Mines and Petroleum Resources.

A decade ago BC developed a transportation policy to reduce GHG emissions in the province, and one of the outgrowths of that policy was the development and wider use of RNG, said FortisBC’s Scott Gramm, RNG program manager. "The government mandate is really what we needed to develop our NGV and RNG program.”

For FortisBC, the option of offering RNG to its customers has become a "customer retention tool." The utility uses RNG to attract customers as it did recently in lining up a microbrewery business that wanted to lower its carbon footprint.

"Our program evolved from a regulatory construct," said Gramm. The RNG is "considerably" more expensive than regular natural gas, "but when you compare it to electricity it looks favorable."

Gramm said the University of British Columbia also signed a 10-year contract, paying a premium for the RNG over the entire period.

Meanwhile, researchers are developing an alternative to high-pressure tanks to fuel NGVs with either CNG or LNG. One method in development is using porous, sponge-like crystalline materials that can soak up methane at a modest pressure and release it when pressure is reduced.

A family of materials known as metal organic frameworks (MOF) include a promising absorbent developed by a Hong Kong researcher in 1999 called HKUST-1. David Fairen-Jimenez at the University of Cambridge in the UK said researchers have come up with a simple way to make HKUST-1 more dense and increase its absorbent qualities. Based on what he said was a laboratory mistake, the group has "the best methane storage absorbent made to date.”

The research, published in Nature Materials, “represents a greater than 50% improvement over any previously reported experimental value."

The latest research follows similar advances reported last at the University of Pittsburgh’s Swanson School of Engineering, where researchers said the MOF "hardness" achieved is at least 130% greater than conventional MOF counterparts.

Recent Articles by Richard Nemec