The Energy Collective has a post from Geoffrey Styles on the growth of natural gas fuelled road transport - Could Natural Gas Fuel a Trucking Revolution ?. might as well use that transition fuel up as fast as possible...

The International Energy Agency (IEA) released its latest Medium-Term Gas Market Report in St. Petersburg, Russia last month. Although the IEA sees the growth of gas in the power sector slowing, they also cite its emergence as "a significant transportation fuel." What really caught my eye was their projection that gas over the next five years would have "a bigger impact on oil demand than biofuels and electric cars combined," in light of the US shale gas revolution and tougher pollution rules in China.

That's quite an assertion, considering oil's longstanding dominance in transportation energy. As I noted in March, Italy, Pakistan and several other countries already have well-established demand for compressed natural gas (CNG) for passenger cars. Despite these hot spots only 3% of gas is currently used in transportation, globally, based on analysis from Citigroup. The IEA is forecasting that transportation growth will consume 10% of the projected global gas production increase of roughly 20 trillion cubic feet (TCF) per year by 2018. That's 2 TCF per year of additional natural gas demand in the transport sector, equivalent to 1 million barrels per day of diesel fuel.

I'd be more skeptical about that figure if I hadn't seen a presentation from Dr. Michael Gallagher of Westport Innovations at the Energy Information Administration's annual energy conference in Washington, DC last Monday. Westport specializes in natural gas engine technology for heavy-duty trucks and played a major role in implementing the LNG vision of the ports of Los Angeles and Long Beach, CA a few years ago.

Dr. Gallagher made a strong case for gas in heavy-duty trucking, starting with the low cost of US natural gas compared to oil and its products. Initial growth rates in several segments look encouraging, including transit buses and new trash trucks, for which natural gas now has around half the market. Growth in China has apparently been even faster, with LNG vehicles increasing at over 100% per year (from a small base) and natural gas refueling stations growing at 33% per year since 2003.

The Energy Collective has an interesting look at the relative merits of CNG and LNG for fueling heavy road transport vehicles (which seems to be part of the general effort on the part of Shell and others to try to boost the use of natural gas for transport) - A New Debate Emerges: LNG or CNG for the Long Haul

Amidst the constant discussion of plentiful domestic natural gas and its use as a transportation fuel, an unusual technological and philosophical debate has emerged. Those familiar with the industry know that until recently, fleet managers considering the conversion from gasoline or diesel to natural gas had basically two options: compressed natural gas (CNG) was the choice for any return-to-base, short mileage vehicles, and liquefied natural gas (LNG) was the option for long-haul on-highway Class 8 trucks, also known as tractor trailers or semis. The reasoning behind this was relatively straightforward, and more or less a product of a few issues inherent to gaseous rather than liquid fuel (energy density, tank storage capacity, re-fueling time). However, due to a variety of innovations, a paradigm shift may be under way.

In comparing alternative fuels to gasoline or diesel, a major consideration is the relative energy density and associated cost, weight and size of on-board fuel storage. For natural gas, when compressed, its energy density is only about a quarter that of diesel, and when liquefied just 60% of the energy density of diesel. Therefore, either option requires greater fuel storage capacity to achieve a comparable range, which means more and/or larger tanks.

Compared to CNG, LNG contains 2.4 times more energy per diesel gallon equivalent (DGE). Moreover, since LNG, like diesel and gasoline, is a liquid, one could achieve comparable refueling speed, whereas the level of compression required to “fast-fill” with CNG is very high (~3,600 psi). As a result, for the long-haul trucking sector, the energy density and associated cost(s), weight and on-board storage capacity of LNG have long been viewed as the more attractive, viable option.

Relatively recent advances in tank storage capacity and “fast fill” refueling technology have allowed room for debate as to whether LNG really is the only natural gas option for the long-haul trucking industry. To best highlight the philosophical nature of this emerging debate, it may be best to look at two of the leading natural gas refueling infrastructure providers, Clean Energy Fuels (CLNE) and Trillium CNG (TEG subsidiary), each of which has taken an opposing view on this topic.

Clean Energy was the first mover in the industry and is now by far the largest provider of natural gas refueling infrastructure in the US. They are betting big on the fact that CNG is the choice for local urban fleets (refuse vehicles, delivery trucks, etc.) but that LNG is the option for long-haul tractor-trailers. Alternatively, Trillium CNG, along with their partners at AMP Americas, a Chicago-based investment firm, strongly believe that CNG should be the choice for all heavy-duty fleets, regardless of distance traveled or route. Without commenting on which approach is better, the following will help to explain each company’s thought process.

CNG and LNG are both proven forms of natural gas storage, with distinct advantages over diesel and gasoline when used as a transportation fuel. To produce CNG, natural gas is taken directly out of the United States' expansive network of natural gas pipelines, whereas LNG must be cryogenically liquefied to -260 degrees F (to become a liquid) and often must travel via ground transportation (tanker truck) to stations across the US. With pipeline access, LNG can alternately be produced from the gas grid through MMLS (movable modular liquefaction system) units. On-site, CNG is compressed immediately and enters a truck in a process that is almost identical to traditional fueling practices, from the driver’s perspective. On the other hand, LNG requires drivers to wear a mask and gloves to protect themselves against cryogenic burns.

For the Class 8 truck sector, Trillium/AMP have made the decision to build CNG stations because, in their words, “it is a cheap, simple and safe way to transport and store natural gas.” They have also found that the additional simplicity of CNG over LNG makes it an easier product to maintain, as well as a less expensive product to produce. For example, according to their general pricing model and marketing materials, on average, “end users of CNG gain a $.48 advantage over LNG, for a product that works equally well, has less associated hazards and a greater built-in infrastructure across the US.”

Alternatively, Clean Energy has invested heavily in LNG infrastructure, including two liquefaction facilities, to supply their network of 150 existing refueling stations and more in the works that they refer to as America’s Natural Gas Highway. While the production and transport of LNG require greater technical expertise and significantly more capital than for CNG, LNG cost savings are realized on refueling infrastructure/operation. This is primarily a result of the high electricity demand/cost required to achieve the compression necessary for a “fast-fill” CNG station. There is also greater flexibility in where a station can be located (no need for natural gas pipeline access) and in future expansion of existing stations.

The SMH has a good example of the stunningly poor level of professional journalism when it comes to energy. In the article below you could probably substitute CNG (compressed natural gas) for LNG (liquefied natural gas) and get something that may make sense - Major gas agreement signed in Chinchilla.

Two major companies have signed a $100 million agreement that will see the construction of a multimillion dollar liquefied natural gas plant northwest of Brisbane.

Gas company BOC and coal seam gas exporter QGC announced the contract in Chinchilla on Thursday morning. The companies said the new plant is on track to be the first in Australia to produce liquefied natural gas (LNG) from coal seam gas to fuel trucks.

Premier Anna Bligh flew to Chinchilla for the announcement. She said the agreement heralded the start of a new industry for Queensland which would see heavy vehicles switch to LNG - an environmentally cleaner fuel than current alternatives.

"LNG produces up to 25 per cent fewer emissions than diesel and is a proven safe alternative to other fossil fuels," Ms Bligh said. "Through this agreement, Queensland will join the rest of Australia, as BOC develops a network of fuelling stations across the country for vehicles converted to run on LNG."

She says QCG has agreed to supply gas to BOC from July 2011 and if the companies meet that deadline, Queensland will become the first in Australia to produce LNG from coal seam gas.

The Texas Monthly is wondering what happened to the "much hyped" Pickens Plan - Gone With the Wind. While I think the CNG powered cars part of the plan was misguided and doomed to fail, the setback to further expanding the Texas grid and wind power capacity is very unfortunate (via Energy Bulletin).

Remember T. Boone Pickens? In September, I wrote a flattering cover story (“There Will Be Boone”) on the Dallas billionaire and his plan to break America’s dependence off foreign oil. Basically, I gushed—and gushed.

Actually, back then, just about everyone in the media was gushing over Boone. With his newly published memoir and his $65 million advertising campaign to promote wind energy and natural-gas fueled automobiles, he was a genuine media sensation. On top of that, his energy-oriented hedge fund was raking in hundreds of millions of dollars in profits, leading some Wall Street experts to call him a financial genius. At the age of eighty, he was on top of his game.

Uh-oh. Since my article was published, Boone has been taking a shellacking. To begin with, he has taken a huge financial hit as the price of oil has collapsed. Since its peak in June, Pickens’s hedge fund has lost $2 billion, about sixty percent of its value, leading half of the fund’s investors to withdraw their money. (Now the fund has an estimated $400 million to $500 million left—a paltry number by Pickens standards.)

And remember that record-setting $165 million gift he made to his alma mater, Oklahoma State University, a couple of years ago—which he then had the university invest into his hedge fund so that he could grow it even more? The rumors are that much, if not all, of the OSU fund has vanished with the stock market collapse.

Yikes. Some of the Wall Street experts who once praised Boone as a wizard now say Boone has lost his credibility because he foolishly remained too bullish on oil, even as the market continued to slide.

But that’s not all. When I first wrote about the Pickens Plan, as it is now known, he was putting his money where his mouth was, declaring that he was going to build a giant 2,700-turbine wind farm in West Texas costing upward of $10 billion. Nope, not anymore. The nation’s credit crunch has gutted the wind project’s financing, putting the whole project on hold. He’s also delayed work on a state permit to build 170 miles of transmission lines from West Texas that would carry enough wind energy to power 300,000 homes. “For now,” Boone told one reporter, “the wind stuff is deader than hell.”

In fact, the whole Pickens Plan seems to be going, well, nowhere. In November, California voters resoundingly defeated a ballot measure he supported to put $5 billion in bond money into promoting natural-gas vehicles in the Golden State. (Pickens’s own company, Clean Energy Fuels Corp., the country’s largest owner of natural-gas filling stations, sponsored the plan and put up $19 million to back it.) What’s more, automakers have simply refused to embrace the idea of natural gas-powered cars. They are focused on building cars that run on electric power.

Grist reports that interest in CNG fuelled vehicles in the US is increasing - Revolution by 'Natural' Selection. This isn't really a sane response to peak oil, but no doubt it will last as long as the current shale gas boom continues - I think oil services (drilling) businesses may have a very bright future for the next decade or two...

High oil prices, increased domestic natural-gas production, and a well-publicized push from a former oil man have all boosted interest in natural-gas vehicles in the United States lately. This spring, the natural-gas equivalent of a gallon of gasoline was selling for about $1.50 less than gasoline on average nationwide. And in some places like Utah, where vertical integration of natural-gas utilities keeps prices unusually low, the difference is even larger. Energy independence enthusiasts in and out of Congress are (naturally) gassed about the possibilities.

Right now, the U.S. only imports some 2 percent of its natural-gas supply and new drilling techniques that extract natural gas from shale deposits have analysts predicting a sustained boom in domestic production for years to come. However, a dearth of natural-gas pumps at gas stations is a major hurdle to increased use of the cleaner cars; less than 1 percent of U.S. gas stations carry natural-gas pumps for vehicles. Another infrastructure problem is the lack of commercially available natural-gas vehicles. Honda's Civic GX is the only model currently available, though GM has said it might also get into the biz.

There seems to be a fair amount of enthusiasm for CNG vehicles, based on the comments I see at The Oil Drum. While I remain of the opinion that the sooner we move to an electric transport system, the better off we'll be, I thought I'd point to this article at Auto Blog Green on Natural Gas Vehicle Cooperative launches in three western states.

We know that T. Boone Pickens is a fan of natural gas, but powering vehicles with the clean-burning fossil fuel isn't exactly on the top of Americans' wishlist. The newly-formed Natural Gas Vehicle Purchasing Cooperative (NGV Co-Op), started by CALSTART and operational in three states (Arizona, Nevada and California), will help fleet managers "to quickly identify, locate, and purchase a wide range of light-, medium-, and select heavy- duty natural gas vehicles at the best prices." Most CNG vehicles available today are larger work trucks, so aiming at the fleet market makes sense. The current list of available vehicles includes the following:

* Honda Civic GX;
* Chevrolet Express Van
* Chevrolet Silverado pickup
* GMC Sierra pickup
* GMC Topkick
* Ford E-450 shuttle bus
* Ford Crown Victoria
* Ford F-150
* F-250 pickup
* Ford Van
* Ford E-350 cutaway

The types, makes and models on this list will grow as more vehicles become available, and CALSTART also wants to bring the co-operative bidding process to other locations in the future.

The ABC's "7:30 Report" last night had a look at the large amount of optimism that many people have regarding Australia's natural gas reserves - "As world oil prices skyrocket, experts warn Australia must find an alternative source of fuel. Some argue a cheaper, greener solution is right under the nation's nose: natural gas."

Both the APPEA and new Energy Minister Martin Ferguson have been arguing this for some time - though its far from clear how long we can continue to expand LNG exports, expand gas fired power generation (as part of the APPEA's "transition to lower carbon emissions" strategy), contemplate building GTL plants and use CNG for most or all of our transport as suggested in this report (not to mention supplying the usual industrial and domestic uses of gas) especially when one major potential source of supply (from PNG via the now abandoned pipeline project) has been removed from the equation.

KERRY O'BRIEN: The recent prediction by the head of Caltex Australia that the price of oil may very well double the already record highs for crude, have only heightened concerns about the security of Australia's future fuel supplies. The Federal Government, for instance, has launched a national energy security assessment.

As oil production in Australian fields declines, the Government has also sought and won approval under the United Nations Convention on the law of the sea, to expand its search for oil offshore by an area equivalent to five times the size of France.

But Federal Resources Minister Martin Ferguson agrees that unless there is soon a "eureka oil strike", Australia must find a new fuel alternative with sufficient reserves to power a vast and vital national car and transport fleet. But there are those who say there's an obvious solution to the fuel crisis right under our collective nose, a solution that could cut fuel bills by up to 60 per cent. ...

NOEL CHILD, TRANSPORT CONSULTANT: At the moment we're a bit like a bus heading towards the edge of the cliff. Crude oil is going to become short in supply and it's going to become progressively expensive.

MARTIN FERGUSON, FEDERAL ENERGY & RESOURCES MINISTER: Time is not on our side.

JOHN MIKOLAJUNAS, OES NATURAL GAS: The Government and governments all around the world are scrambling to find alternatives to petroleum products.

GREG HOY: They're selling off Australian gas by the ship load. Sixteen million tonnes this year, gas ships loaded with liquid natural gas, gas chilled to liquid minus 161 degrees Celsius to reduce its volume to one 600th of its original 84 billion litres in bulk. 2,200 gas ships have already left our shores in long-term, wholesale supply contracts with China, Japan, South Korea, Italy, Spain and the United States, nations scrambling to secure their energy supplies for decades to come.

BELINDA ROBINSON, AUSTRALIAN PATROLEUM PRODUCTION & EXPLORATION ASSOCIATION: It provides an energy source for a world screaming out for energy. There's no doubt there's a tightness in the supply of energy, particularly to meet the tigers of India and China. But secondly there's also an enormous appetite for cleaner energy, so natural gas has around half the greenhouse gas emissions of coal fired electricity.

GREG HOY: But with global demand for natural gas expected to double in the next five years, some are left wondering if Australia is missing its own boat.

OLLIE CLARK, NATURAL GAS VEHICLE ASSOCIATION: The thing that strikes me as being rather quaint, to put it mildly, is that we pay anywhere from about $8 billion to $25 billion to import the oil and we get a paltry $4 billion for the gas that we sell to overseas countries. It seems odd to me, especially given gas is a superior fuel for many, many purposes including the use in motor vehicles.

JOHN MIKOLAJUNAS: There's massive reserves of natural gas that are not being used and that's why we're selling them off to China at such low prices. We should be making use of this fuel ourselves locally because if we don't, we're going to be paying for petroleum products. Natural gas can represent a saving of up to about 60 per cent on what you're paying for petrol and that includes diesel and LPG as well. ...

NOEL CHILD: Governments need to look at the issue of where our future transport energy is coming from and take the step, which is a little unpopular in terms of modern economics particularly, of setting some targets and perhaps some mandates otherwise the default position I think is just to continue on the same pathway until the bus does hit the wall.

GREG HOY: The Australian Government is about to embark on an energy security assessment.

MARTIN FERGUSON: With only about a decade of known oil resources remaining at today's production rates, Australia's looking down the barrel of a $25 billion trade deficit in petroleum products by 2015.

GREG HOY: There are other strong reasons, supporters say, Australia should go for gas, not just for generating power with greenhouse efficiency, but to fuel the vast motor vehicle fleet of a sprawling nation, using compressed natural gas, half the price and less polluting than LPG, liquid petroleum gas, a by product of the oil industry.

OLLIE CLARK: Globally there are about 800 million vehicles on the roads of the world and there's about 8 million natural gas vehicles that you pull up at a garage as if you were refuelling with petrol or diesel or LPG and you plug into your car into the natural gas supply and it's full in a couple of minutes just like it is with the other fuels.

GREG HOY: Australia has abundant reserves of gas, enough to last around a century and a half but there is one far greater attraction for motorists who have grown tired of being battered by rising fuel prices.

JOHN MIKOLAJUNAS: You'd be looking at around 40 cents per litre covering all costs including compression of the gas.

Of course, even if you can produce CNG for 40 cents per litre, in the absence of any government regulation you'll still end up paying a price that is driven by global oil and gas prices.

Also at the ABC, an opinion column that has a cynical view of the 2020 summit and its recommendations regarding energy - Solar? Wind? Forget it, we're goin' to gas!.

If what the Government believes to be appropriate policies can be blessed with the appearance of popular legitimacy then the risk of not being re-elected is minimised. A disturbing account by Anna Rose, one well-motivated young participant who was plonked into the sustainability and climate change sector, certainly supports that impression.

But even though Australia is the world's largest coal exporter, I'm not sure that the clean coal lobby is the Government's favourite child. Federal Resources Minister Martin Ferguson was interviewed by Kerry O'Brien about renewable energy two weeks ago. After several repetitions of an exasperatingly formularised answer about carbon trading schemes, he let slip, "I might also say, you shouldn't forget a relatively clean source of energy, that is gas." A pointer towards the real agenda?

I went "sniffing for gas" and turned up Mr Ferguson telling a recent Australian Petroleum Production and Exploration Association conference that the Government wants to encourage more domestic gas projects like the Reindeer development off the WA coast, that the Government is pushing ahead with its review of gas retention leases to encourage companies to exploit their existing reserves, that Australia is facing a $25 billion trade deficit in petroleum products within seven years and that the Government has announced 35 new areas for petroleum exploration in Commonwealth waters this year, most of them in Australia's north west. We are already the world's fifth largest gas exporter, but the thrust of that seems to be "Find more, pump it out and get it sold, ASAP!" So what if it kills the planet, and us along with it?

Mr Ferguson's focus on the trade deficit in petroleum products (his seven-year estimate may have to be revised now that oil hits a "record high" nearly every day) seems a little odd when we have countervailing trade surpluses in coal and gas, and when the trade deficit in petroleum products is a drop in the bucket compared to what has happened to our net foreign debt.

But not if you're pumping for gas. ...