Sen. Ron Wyden (D-OR), chairman of the Senate Energy and Natural Resources Committee, may offer legislation to promote natural gas after his panel has completed its trio of gas forums this month, a spokesman for the committee told NGI.
“If possible, he will be looking at the areas where legislation is needed,” said Wyden spokesman Keith Chu. “He doesn’t have a bill written now…He’s having conversations [with]…all the folks affected by natural gas,” including consumers, manufacturers, government agencies and other members of Congress.
If Wyden pursues legislation, it would come after the two remaining forums on natural gas are completed. The first one held last Tuesday focused on creating a fueling infrastructure for natural gas vehicles (NGV). A second forum, scheduled for Tuesday (May 21) will address the “potential benefits or unintended consequences” of gas exports. The third and final forum will be on Thursday (May 23) and will focus on shale gas extraction practices.
A working group has been created by industry to find creative ways to lower methane emissions and consumer costs, increase the use of NGVs and find innovative solutions to update gas-related infrastructure. An estimated 60% of the nation’s pipelines were built at least 40 years ago.
“My aim is to look at what can be done to address the infrastructure issues hindering wide use of natural gas, beyond just fleets. In addition, I would hope the group could tackle environmental concerns such as fugitive emissions,” Wyden said. “This may or may not require legislation,” he said at the roundtable, where 12 energy and regulatory officials spoke.
He asked the group, which is being headed up by Northwest Natural CEO Gregg Kantor and GE Power & Water President Steve Bolze, to present its findings to the Senate energy panel this summer. The two men said the group plans to begin meeting by June.
An executive with a Portland, OR-based heavy-duty truck maker told the Senate energy panel last Tuesday that he and his competitors could manufacture as many NGVs as needed if only Congress could deliver on legislative initiatives that would promote the construction of refueling infrastructure.
The issue of what should come first, “the chicken [NGV] or the egg [infrastructure] is dead,” said Robert Carrick, sales manager for natural gas for Freightliner Trucks, at the first of three roundtable discussions held by the Senate energy committee. “Freightliner and all of our colleagues in the industry will hatch you all the chickens you want. [But] we need a place to feed them.”
He said a lack of a national network of natural gas fueling stations is a “leading obstacle” currently facing NGV development. Fewer than 1,200 compressed natural gas (CNG) stations exist in North America, and of those only about 300 are what would be called truck friendly, meaning that a truck could fit on the site and be fueled at a rate of at least five gallons per minute.
On the liquefied natural gas (LNG) side, there still are only 50 stations presently that are open for retail fueling, which Carrick said is critical for long-haul fueling. By comparison, there are more than 125,000 diesel and gasoline stations in North America.
“America’s natural gas highway is being built,” although at a slow rate, said Jim Arthurs, president of Cummins Westport Inc., builder of natural gas engines for trucks and buses.
Natural gas provides 27% of the energy consumed in the United States, but less than 3% is being used in the transportation sector, he said. Arthurs urged Congress to remove certain disincentives to spur the use of natural gas in transportation: 1) eliminate the federal excise tax for LNG, which is 70% higher than that for diesel; cut the tax on new gas trucks, which is $4,000-12,000 more than that for a diesel truck; and adjust the current highway weight limits, which penalize NGVs, according to Arthurs. The incremental cost of an NGV is “very, very expensive,” from $45,000-60,000.
While the roundtable discussion primarily focused on NGVs, officials also cited the need for more pipeline capacity. Last winter, the New England region saw price spikes in the area of $30, while the rest of the country was able to get gas for $3-4/Mcf. “I think we’re going to be in this phase for several more years because there are some new pipelines being considered, but they’re unlikely to be in operation before 2017,” said Gordon van Welie, president of ISO New England.
The region needs more gas pipeline infrastructure to handle the gas from the Marcellus, more storage capacity, and more power generators that have dual-fuel capability, he said (see related story).
The head of the Interstate Natural Gas Association of America called on Congress to support pending legislation that would streamline the permitting of interstate gas pipelines. The group endorsed measures offered by Reps. Mike Pompeo (R-KS) and Tom Marino (R-PA) that would require federal agencies to complete their work by a date-certain after the Federal Energy Regulatory Commission issues a certificate.
Federal agency permits that used to take 30-90 days to issue are now taking 18 months, and projects that were executed in 12 months are now taking up to three years, said Richard Cargile, president of the midstream division of Energy Transfer Co., who spoke on behalf of the Gas Processors Association.
Jesus Sotoi Jr., senior vice president of gas transmission operations for Pacific Gas & Electric Co., said the company has invested $1.4 billion on upgrades (in-line inspection tools, 67 shut-off valves and other improvements) to make its pipeline the “safest pipeline in the country” following the San Bruno, CA, gas pipeline explosion in 2010.
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