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By Don Briggs

President, Louisiana Oil & Gas Association

Louisiana ranks fourth among the states in crude oil and natural gas production, behind Texas, Alaska, and California.  However, if we include production from the Outer Continental Shelf (OCS), our state produces more oil and natural gas than any single state in the U.S.

Louisiana ranks first in natural gas processing capacity and second in petroleum refining capacity. Two of the U.S. Strategic Petroleum Reserve’s four storage facilities are located in our state.  We also house the Louisiana Offshore Oil Port (LOOP), which is the only port in the U.S. capable of accommodating deepdraft tankers.  Louisiana’s Henry Hub is the largest centralized point for natural gas trading in the country and provides vital access to major U.S. markets.

Another facet of our state’s diverse energy portfolio is the liquefied natural gas (LNG) import terminal at Sabine Pass.  This terminal is the largest of nine existing import facilities in the U.S.  Future plans for the Sabine LNG terminal could result in a new and lucrative addition to Louisiana’s energy infrastructure and could mean great news for our state and nation.

In late 2010, the Department of Energy approved the exportation of LNG from Sabine Pass to 15 countries with which the United States has a free trade agreement on natural gas.  Recently this month, the Department of Energy issued conditional authorization to Cheniere Energy’s application to export LNG from its Sabine Pass terminal in Louisiana.  Cheniere Energy plans to retrofit its existing import terminal and allow for liquefaction capabilities.  The authorization allows Cheniere to export up to 2.2 Bcf/d of natural gas from the facility for a period of 20 years.  Construction of the project is set to begin in 2012, and will come online in 2015.

The shale gas revolution sweeping across the nation has led to the creation of thousands of jobs and generated significant tax revenues for local and state governments.  In northwest Louisiana, the Haynesville Shale has become the largest producing resource of natural gas in the U.S. and has had an economic impact of $17 billion in 2010 alone.

One thing that the Haynesville and other bustling shale plays have created is a significant supply glut of natural gas.  The end result of this prolific natural gas production has been slumping and stagnant natural gas prices.

The authorization of the Sabine LNG export project could mean long-term relief from these low natural gas prices by opening up access to new markets, but more importantly, this project could have a positive impact on our nation’s ballooning foreign trade deficit.

The continual development of the OCS, the Haynesville Shale and the prospective future of the Tuscaloosa Marine Shale mean that Louisiana will play a vital role in determining our nation’s natural gas future.  For decades we have tossed around the prospective idea of utilizing clean burning natural gas to fuel our economies into the distant future.  At times the discussion has been lofty and hopeful at best.  However, unlike decades past, the natural gas industry no longer faces volatile price fluctuations and questionable supply.

Today, all Louisianans are looking for ways to tighten their budgets and find relief from rising gasoline prices.  With the hurdles of limited supply, adequate infrastructure, and an unstable price environment no longer issues, it’s time that we all look toward making a shift to natural gas.

Don Briggs / Matt Ross Contributor

Many can agree that our dependency on foreign sources of energy poses a serious threat to our national security and economic stability.  As we speak, conversations about our future energy needs are occurring in committee rooms on Capitol Hill and in the homes of everyday Americans.  In my opinion, a future moving towards the utilization of natural gas should be a large component of these conversations.

Natural gas is a highly efficient and inherently clean burning source of energy.  Liquefied and compressed natural gas (CNG) can be utilized to heat our homes, run our plants, and even power our vehicles.

Awash with an abundance of natural gas, Louisiana could potentially become a leading example to the success of CNG.  With the momentous find of the Haynesville Shale, there are nearly 250 trillion reasons why CNG should work for Louisiana.  Containing trillions of cubic feet of potential natural gas production, the Haynesville Shale alone could fuel our nation’s energy needs for decades to come.

In Northwest Louisiana, companies operating in the Haynesville Shale like Chesapeake Energy, EnCana Oil & Gas, and EXCO Resources have made significant moves towards CNG.  Last summer, EXCO Resources constructed their CNG fueling facility at its Vernon Field site near Chatham, Louisiana.  In like manner, EnCana has moved forward with a CNG fueling station in Red River Parish.

Recently in Shreveport, Steelweld Equipment, a manufacturer and installation company specializing in CNG kit conversion, announced they will partner with Rountree Ford dealership to sell and service CNG vehicles to interested fleet operators.  Later this year, Shreveport will convert their municipal buses to clean burning natural gas.  Bossier City also began construction of a new CNG fueling station set to be in service by August of this year.

In South Louisiana, LOGA has worked closely with the City of Lafayette and the Lafayette Chamber of Commerce to promote the benefits of CNG.  Apache Corporation has committed to building a CNG station in the Lafayette area.  It is their intention to build at least five more across the southwest region of the U.S.

On May 19, Apache employee Castlen Kennedy will travel from Austin, Texas to Boston, Massachusetts in a natural gas vehicle.  Apache’s “Austin to Boston CNG Tour” will provide insight into the fuel cost savings of natural gas and offer an in-depth view into the challenges of access to fueling options.  On May 20, the Greater Lafayette Chamber of Commerce and Apache Corporation will welcome Kennedy as she passes through our area.  The Chamber notes, “The tour is to demonstrate the capabilities of vehicles fueled by compressed natural gas. The tour is a component of the Chamber’s drive to inform public and private entities of the benefits of converting fleet vehicles from gasoline and diesel fuel to CNG.”  Officials from Apache and the Chamber, as well as fleet owners interested in converting will be in attendance.

With access to an abundance of natural gas, existing tax incentives, and the progression of CNG infrastructure projects within the state, it is my hope we will soon see the emergence of a thriving marketplace for compressed natural gas.  Across the state of Louisiana, we are finding solutions to our energy needs and doing our part to bring our nation closer to energy independence.  We believe CNG should play a significant role in our energy future.  As a challenge to other states, “Won’t you join us?”

Don Briggs – Louisiana Oil & Gas Association -

In my July column, I wrote, “The stage is set for the transformation from an oil supplied transportation system to a natural gas supplied transportation system.” With the discovery of the Barnett, Haynesville, Marcellus and other shale plays and the development of sophisticated drilling and fracturing techniques, the U.S. now has an abundant supply of natural gas reserves for many decades to come. In addition, federal and state incentives are in place to encourage consumers and industry to switch or convert to natural gas, the clean burning fuel of the future.

However, transformations, especially large ones, do not happen over night. They take time, planning and a degree of risks.  Would you purchase a natural gas powered vehicle today?  I would, but not until fueling stations and an infrastructure are in place to support my travels on a day-to-day basis.  Would you invest in building a fueling station?  I would, but not until vehicles are present to fuel and a market exists to sell my gas. So the answer is no, not now.  It is the chicken or the egg dilemma.  Which one comes first?

Before attempting to solve the dilemma, a few frequently asked questions need to be answered.

What is CNG?

• Compressed Natural Gas (CNG) is the same gas that fuels your stove, heats your water, and fuels your barbeque pit.
• Natural gas is compressed under high pressure at the fueling station and then is dispensed into the vehicle.
• Natural gas is stored under high pressure in cylinders until the fuel is released to power the car or truck.

What are the “types” of fueling or filling stations?

• Commercial Stations (slow fill or fast fill): Slow fill stations require small compressors to fill at a much slower rate. Fast fill stations require large compressors and storage cylinders to fill at the equivalent rate of gasoline.
• Home Fueling Stations: This is the smallest and least expensive. A filling unit is mounted to the garage or home and uses the same gas that is already built into your home. The unit plugs into your vehicle and fills very slowly, generally overnight.

Back to our dilemma – The chicken or the egg? The answer is neither. CNG will only succeed if it is both the chicken AND the egg, and that is exactly what is taking place in Lafayette.

The Apache Oil Corporation, based in Houston, Texas, with Louisiana offices in Lafayette and Houma, has stepped to the plate and committed to build a CNG fueling station in Lafayette.  In return, the Lafayette business community has committed to convert fleet vehicles to CNG or bi-fuel vehicles. Under the leadership of the Greater Lafayette Chamber of Commerce in conjunction with Lafayette Economic Development, Lafayette Consolidated Government, LOGA (Louisiana Oil & Gas Association), and private and publically held corporations, several meetings have already been held to discuss and explore the ins and outs of converting fleet vehicles. This combined effort solves the dilemma by providing adequate supply and demand – the chicken and the egg.

CNG fleet vehicles are not uncommon to many large metropolitan cities.  For instance, city buses are powered by CNG in Washington, D.C. In southern California, every garbage truck is powered by CNG, which greatly reduces carbon emissions and is more cost effective than gasoline. Even some businesses are converting to CNG.  AT&T recently announced plans to convert 8,000 vehicles to CNG.

CNG is coming soon to a station near you.

Louisiana Oil & Gas Association – By: Don Briggs -

The stage is set for the transformation from an oil supplied transportation system to a natural gas supplied transportation system.  A year ago T. Boone Pickens went on the world stage using his own money campaigning for the “Pickens Plan”.  Part of the Pickens Plan was the use of CNG (compressed natural gas) powered vehicles to wean the U.S. off the ever-growing imports of foreign oil, which has grown to 70% of U.S. consumption at a cost of $400 billion annually.

For decades every U.S. President has been warned of the national security risk of growing oil imports, all the way back to President Truman when imports were at 20%.   EIA (Energy Information Administration) projects continued growth in U.S. oil demand and imports.  In another ten years we could easily be importing 75% of our demand at an even greater cost.  However, this does not have to happen.

The U.S. has an abundance of natural gas. Last month the Potential Gas Committee, a natural gas think tank, released a report estimating gas resources in the U.S. have surged by 35%, due to new technologies that have unlocked domestic supplies of the clean burning fuel.  The Potential Gas Committee estimated gas reserves rose to 2.07 quadrillion cubic feet in 2008.  The report confirms the Department of Energy estimates of a 100-year supply of natural gas.

It only makes sense that NATURAL GAS is the fuel of the future, or should I say the immediate future.

•    98% of the natural gas used in the United States is produced in North America
•    The cost of CNG currently averages up to 40% less than an equivalent gallon of gasoline
•    American natural gas producers control ALL of our needed reserves for natural gas compared to the U.S. control of 4% of the world oil reserves
•    CNG is by far the environmental answer for America; natural gas vehicles show an average reduction in ozone-forming emissions of 80 percent compared to gasoline vehicles.

The transformation from gasoline-powered vehicles to natural gas won’t take place overnight.  There are over 9.5 million natural gas vehicles worldwide.  Argentina, Brazil, Iran, Pakistan, lead the world in natural gas vehicles with one million or more vehicles.  The U.S. has a mere 100 thousand. The kicker is INFRASTRUCTURE, where do you fill up and how often.

In the 1989 movie Field of Dreams, the catch phrase was, “If you build it, they will come.”  Fueling stations around the U.S. will have to be built in the years to come for consumers to feel comfortable in purchasing CNG vehicles or purchasing conversion kits for their vehicles. In the meantime the conversion of FLEET vehicles will be a big part of the instant growth in CNG Vehicles.  AT&T recently announced converting nearly 8,000 vehicles to CNG in the next five years.  Also many cities plan to convert their fleet vehicles and public transportation systems.

Louisiana is doing its part, not only as a major producer of natural gas but providing incentives for consumers and industry to convert to CNG vehicles.  This past week, Governor Jindal signed HB 110.  HB 110 increases the existing income tax credit from 20% t0 50% for purchase of qualified clean burning motor vehicle fuel property; includes equipment installed on a motor vehicle; includes property directly related to the delivery of an alternative fuel.  The legislation was authored by Representative Jane Smith and Senator Nick Gautreaux and strongly supported by industries throughout the state. CNG fueling stations will soon become more readily available as will CNG vehicles for purchase.