_

When a change in human economic and technological behaviour occurs it is often years later that economists and historians will delve through the records and point to a particular time, a technology, a place, a person or indeed a company, and indentify the trend that was to come. Such events have happened before in our recent past with motor vehicles replacing the horse, electric light replacing gas light and our new computerised technologies changing virtually every way that we go about our life. Oil-based fuels have been at the heart of vehicles since their first appearance at the end of the 19th century. Many of us cannot and will not do without the transportation that we have become accustomed to.

The price of oil has surged and dipped over the last few decades in response to actual crises and market-perceived crises. It is happening again now in the Middle East and both tensions and prices at the pumps are running very high. Fuel is too high for some to bear and consumers have and continue to cut back, affecting the viability of the refineries. It would appear that people, companies and governments are now actively seeking alternatives. If many oil and gas companies are to survive the transition, it would make very good sense to be at the forefront of a change that is not so much of a change, LNG may just provide that opportunity.

Encana Corp has a strong portfolio of natural gas, oil and natural gas liquid plays. In the last week of February 2012 the company opened its first LNG fuelling station in Frierson, Louisiana, for the needs of its own heavy-duty truck fleet and also for public use. The station is designed to be used by Encana’s partner, Heckmann Water Resources (HWR), which is working with Encana in the Haynesville Shale. In April 2011, Canadian Truck builder Peterbilt said that HWR had ordered 200 LNG Model 367 trucks. Encana says that 50 of HWR’s LNG trucks have already been deployed and also revealed that the company has secured a contract with AGL Resources Inc’s subsidiary, Pivotal LNG, the owner and operator of a major liquefaction facility. Encana says that the contract enables the company to provide LNG to consumers and further create new opportunities for natural gas in the transportation sector. “This new station is a major step towards encouraging companies to convert vehicles to run on affordable, environmentally-responsible natural gas,” said Eric Marsh, executive vice-president, Encana Corp and senior vice-president, at its USA division, in a statement.

The Frierson LNG station was built by GP Strategies Corp’s Alternative Fuels Business unit. “This station is significant because it is the first LNG fueling station in the region intended for public use,” said Michael Mackey, GP’s vice president of strategies, Alternative Fuels business unit, in a statement. “This station signals a growing trend for stations to be located outside the traditional California market. It was a pleasure working with Encana on this project, and we believe that this station will meet the near-term LNG vehicle fueling needs for the region. It also provides access for fleets to use clean domestic natural gas and help reduce our dependency on foreign oil.” GP says that the station has three 16,000gal LNG storage tanks and three LNG fuel dispensers and card readers and that the station can handle a fleet of over 100 trucks a day.

Encana says that it also operates four mobile LNG fuelling stations and six compressed natural gas (CNG) stations and that it has already converted 50% of its fleet field vehicles in Louisiana for CNG. Furthermore, the company says that it has retrofitted drilling rig engines, four of which run on LNG, to natural gas in its US operations. According to Encana, vehicles powered by CNG and LNG operate very similarly to gasoline powered engines but due to a cleaner combustion process have a longer operating life. In terms of the environment, Encana says that converting freight and commercial trucks both saves money and reduces carbon emissions and that converting one 18-wheeler to LNG from diesel takes the emissions output of around 325 cars from the road.

MasterCard’s SpendingPulse surveys some 140,000 fuel station in the US and with the alternative fuel station count in the US at the moment standing at around 13,200, according to the US Department of Energy, there is a long way to go. Breaking down the numbers, over 6300 are electric stations. However, natural gas in the form of liquefied propane gas (LPG) CNG and LNG make up the next biggest group of around 3800 and it will be interesting to see how the station statistics stack up over time to see if there is a trend developing here. Of course, other fuels such as biodiesel, ethanol, hydrogen and emerging fuels have and may continue to stake a claim in the overall market and there are some doubts as to whether, even in the US, if there is enough shale gas production to cope with everything that it is desired of it. A recent release of an estimate of another 80tnft3 of natural gas being in Alaska may change that game a tad.

Not every nation will have the resources and infrastructure to go to LNG for transportation or some of it. Nevertheless, for the US, with companies that have the portfolio, experience and resources to make a transition, LNG fuelled vehicles does seem to be somewhat of a “no-brainer” and with the development of a home market for LNG this may even start to push natural gas prices in the US up to a more viable level. The benefits for truck operators aside from the longevity of the engines stand to be around a US$1.00 or more saving on a gallon of LNG compared to diesel and hopefully without the price volatility because of the locally supplied resource. If natural gas is the new oil could LNG be the new gasoline and diesel?

original article