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U.S. Market For CNG, LNG as Transport Fuel on Upswing to 2040, Says ExxonMobil

The United States should account for about 15% of the global growth in natural gas use for heavy-duty vehicles by 2040, with a 10% share of the domestic market sector, ExxonMobil Corp. is forecasting.

Most of the demand for natural gas initially would be from compressed natural gas (CNG) for fleet vehicles like buses and both medium-duty and heavy-duty trucks, according to the annual Outlook for Energy, issued on Tuesday (see Daily GPIDec. 9).

"Today, use of natural gas as a transportation fuel in the U.S. is very modest, but we expect it to reach about 10% of the U.S. heavy-duty sector by 2040," according to ExxonMobil's forecast team of economists, engineers and scientists.

"In some regions, natural gas is emerging as an alternative fuel in the heavy-duty transportation sector," the report noted. "This trend is being driven by potential economic benefits to truck operators where natural gas is readily available as a competitive alternative to liquid fuels."

The initial cost of natural gas trucks, equipped for either CNG or liquefied natural gas (LNG), can be "tens of thousands of dollars higher than conventional diesel trucks," but "in some markets, prices of natural gas relative to diesel over time may provide significant cost savings on fuel. In addition, natural gas can provide benefits in reducing emissions."

About 45% of the projected growth in natural gas as a fuel for heavy-duty vehicles is expected to be from China and India.

"China is making increased use of its stranded gas resources through small liquefaction operations (trucked LNG), and India also is promoting increased use of gas," the report noted. "By 2040, natural gas is expected to account for about 15% of the heavy-duty transportation sector in both China and India."

Natural gas use as a fuel also is expected to increase in the marine and rail industries over the forecast period.

Most of the energy demand growth for the aircraft, marine vessels and rail industries is expected to be met by oil, representing a projected combined increase of about 7 million boe/d.

However, "in the marine and rail sectors, we anticipate natural gas will meet about one-fifth of the growth in demand and reach about a 10% share by 2040," said ExxonMobil.

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