Citing a 2010 Massachusetts Institute of Technology’s (MIT) natural gas study, Sen. Al Franken (D-MN) on Tuesday questioned the efficiency of using natural gas supplies to produce electricity to power electric vehicles (EV), rather than pushing natural gas vehicles (NGV) as competitors to EVs.
A panel of industry experts testified at a Senate Energy and Natural Resources Committee hearing Tuesday about NGVs and other alternative fuel vehicles (see Daily GPI, July 25).
The MIT study “basically said if you use natural gas to produce electricity you can drive a car twice the miles, compared to using the natural gas directly for fueling the vehicle,” Franken said. He said he prefers natural gas use in buses and other fleets “because the existing fueling structure can more easily accommodate fleets.” In addition, buses and heavy duty vehicles are more capable of carrying the heavy tanks required for compressed natural gas or liquefied natural gas (LNG). Thus, he wanted to know “the pros and cons of federal policy” related to fleet vehicles as opposed to passenger vehicles.
Westport Innovations Inc.’s Michael Gallagher noted that an MIT study this year offered “very positive” conclusion for use of natural gas in transportation (see Daily GPI, June 8). “With the new economics of natural gas — whether you are talking light duty or passenger vehicles — the NGVs look quite attractive compared to EVs,” given all of the efficiency comparisons, he said.
David Greene, who works at the Oak Ridge National Laboratory in Tennessee, told the committee that there were probably “a lot of assumptions behind it,” but MIT’s conclusions were accurate. Gas will maintain price advantages in transportation with or without LNG exports. “I think the market does see the price advantage of natural gas and does it expect that to continue into the future.”
Sen. Ron Wyden (D-OR) raised questions about gas price volatility and the the potential impact of exporting LNG in what may be a growing NGV market. He emphasized that technology was not holding back more extensive use of NGVs, but rather it is being hindered by economics that revolve around the continuing volatility of wholesale gas prices, which he thinks will get worse if the United States begins exporting large amounts of LNG. “Natural gas prices are lower today than they have been in years, but nevertheless they are no less volatile,” he said.
Paul Cicio, president of the Washington, DC-based Industrial Energy Consumers of America (IECA), said he does not oppose LNG exports, but IECA has concerns about future supply and demand for gas because its members collectively are planning $65 billion worth of expansions that involve using about 3.7 Tcf of added natural gas. “We have abundant supplies of natural gas now, but we see potential headwinds there, including government regulation, that could impair this robust, economic supply of gas. On the demand side we see some extraordinary demand, unlike the United States has ever seen before.
“For the record, we are not against exports, but in every board room manufacturers are talking about what impact 14 [LNG] export facilities may have,” said Cicio. “If all of them were approved, and probably they won’t, we’re looking at a 27% increase in demand for gas. During the past 11 years we have increased gas demand for only 4.4%.”
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