Hello, this is Sam Shelton. We're back with Energy 101.
Today, we're going to look at natural gas fuel vehicles.
We've looked at electric vehicles and this is a good example that we can go
through to look at the technology solutions, the deployment of technology
that hopefully can have a major impact on our energy issues.
And as you have seen throughout this course, the primary issues that I see are
carbon emissions and oil imports to the US.
And anything that will resolve either one of those is certainly good.
But they need to, we want to look for the ones that have the big impact.
So it can make a significant dent in the amount of oil we import or the amount of
carbon that we, or is reduced. You know, it, a lot of times the research
and development to work on the technology that has a very small impact is about the
same as, doing the research and development on the technology that has a
major impact. So let's look at the impacts which I
think we should all do and decide before we focus on which energy solution we
should go after. We need to look at which one has the
most, the biggest impact. So that's the purpose today.
And see what the barriers might be to natural gas vehicles.
the first, of course we'd look at the oil consumptions by sector.
And we see that oil is used 72% for transportation, 23% for manufacturing.
And then, residential buildings, commercial buildings and, and used to and
less than half percent used to generate or electricity.
So, if we can make a dent in our oil consumption for transportation, then that
would be a major, reduction create a major reduction in the manner what we
needed import. Assuming that we maintain and even
possibly increase the amount of oil that we produce in this country, because right
now, for the near term, looks we're very optimistic about.
So let's look at some numbers. first, do we have enough natural, enough
natural gas. That's the first thing we want to look
at. There's no sense in thinking about this
as a, a solution to our oil imports if we don't have enough natural gas to displace
a significant amount of that transportation oil.
well, from, in the last five year, from 2007 to 2012, due to natural gas fracking
and horizontal welling that we talked about very early in the course.
the production is up about 24%. So that's about 5% a year, that our US
production for natural gas has been up. It was actually a must and, it, it was
depressed back in 2007, 2008 because of the recession, but that's that's a new
answer we won't to need to get into for our purposes today.
So that means that we have had an increase of 14 billion cubic feet per
day, and essentially, all of that has been taken by the electric power plants.
We say where did that gas go, we don't produce it and put it in a storage.
There's a limited amount of gas we can store in underground storage.
But and that's stayed about the same, because we don't have increase storage
product capability. But essentially all of that increase that
we've had in natural gas over the last five years has gone to electric power
plants. And especially displaced or, or a new
power plants been in lieu of coal power, power, coal fuel power plants.
So let's see how much it would take. and here, I want to reference James
Williams WTRG, who is energy economist over in Arkansas.
And there is a website that he, he did a newsletter study that I'm basically
tracking here and getting a lot of information from.
He got the raw data, like I do, from the Energy Information Administration, and I
agree with the data source. so, he, he's got a few more explanatory
notes in, in that newsletter. so how much natural gas would it take to
displace a 100% of gasoline? Now, we don't need to do that, we'll
never do that anyway. But, we look at 100% and then we say,
well, let's see if a major impact would be 25% of that.
So, it's a way to look and see what it would take to have a major impact on
reducing our gasoline and diesel fuel their utilization.
Well, today, gasoline demand is 8.6 million barrels per day, and that's out
of our total oil usage of about 15 million barrels per day gasoline energy
content. If we're going to replace gasoline with
natural gas, it just takes the same amount of energy.
so it'll take a BTU of natural gas to drive a car the same distances as a BTU
of gasoline. So that's the basis here.
Gasoline energy content is 5.2 million, million BTUs per barrel, and we use 8.6
million barrels of gasoline per day. Now, the natural gas energy content is
approximately 1000 BTUs per cubic foot, so you run the math on that.
You take 8.6 million times 5.2 million BTUs per day divided by 1024 and you get
billions of cubic feet per day. 43.8 approximate, essentially, 44 billion
cubic feet per day, so that's how many billion cubic feet per day of the
extra-natural gas we will have to produce to displace a 100% of the gasoline.
We wanted to, to replace 10% inevitably of 4.4 billion cubic feet per day.
So that's the point of this calculation. Now, let's look at diesel fuel, because
in trans, a lot of that oil is burned as gasoline some of it is burned as diesel
fuel. And so, what's the transportation diesel
fuel demand? Well, it's 2.8 million barrels per day
versus the 8, whatever it was for gasoline.
It's less, but it's significant. the diesel energy fuel energy content is
5.8 million BTUs per barrel. Notice that's a little higher than
gasoline, which is 5.2. That's one of the reasons diesel diesel
engines get higher fuel mileage than our cars, than gasoline cars.
Because, when you buy a gallon of diesel, you get more BTUs, and than if you buy a
gallon of gasoline. again, the natural gas energy content is
1,024 BTU per cubic, cubic foot. Run the math, it's 2.8 times 5.8 divided
by 1,024, and it takes about 16 billion cubic feet per day to displace have, have
enough natural gas to displace all of the diesel fuel.
So, when we sum it up here it takes about 44 gasoline Bcf per day of natural gas to
displace all our gasoline and used in transportation.
16 approximately Bcf per day of diesel, and to replace all the diesel, so it's
approximately 60 Bcf per day in natural gas would displace 100% of our gasoline,
and diesel fuel and all the fuel barrel, oil that consumes.
so, how is, how is that compare with our natural gas production today?
Well, as, as I noted earlier, the 2012 nitro gas production during the year
average about 69 billion cubic feed per day.
So, we essentially would have almost double it, well, but let's look in look
in this that's obviously an extreme, but if we want to do 10% or 20% or 25%.
You merely take that percentage of the 60 billion cubic feet per day of natural gas
that would displace all of it. So, that's that's educational.
You know, it's not an impossible thing, particularly since we seem to be
increasing our natural gas production, or we are in the history anyway.
Who knows what's going to happen in the next year or two?
That's another issue I'll mention. but let's just take 25% displacement of
our oil used for transportation. Well, that would require 15 billion cubic
feet per day of natural gas, 1 4th of the 60, and with, we'd have to increase our
total natural gas production from 69 to 83.
And, you know, that's about the same increase we've had over the last five
years. However, we gotta realize we're not,
vehicles are not the only ones that would like to have this natural gas, assuming
we can convert all the vehicles to natural gas.
we have competing usage. Electric power is certainly the biggest
competing usage. They've already used up the, the, the
last incremental 14 billion cubic feet per day.
And if we continue to build, new power plants are like natural gas, rather than
coal, which we expect to do, then they're going to continue to increase the amount
of natural gas consumption. So we, we got to realize that we're not
the only shoppers new shoppers are looking for gas for natural for vehicles
that are looking for that to use that extra-natural gas.
The other competing usage is liquefied natural gas exports where they liquefy
it, cool it to minus 265 degrees Fahrenheit, but it on special, LNG
tankers and export it. we can export almost everything that,
that we want to, and people like Shell Oil Company are putting hundreds of
millions of dollars over the next few years of state they were and exporting
building export equipment and facilities to export LNG.
So they're going to be buying extra-natural gas that we produce,
hopefully that we'll produce for that effort to get some profit back on all
that investment. So, there are competing usage is here,
things are never as simple as they first appear, we have to dig down.
but what about prices? Well, natural gas drilling activity has
exactly dropped over the last 6 months or so in particular, and why?
Well, because they, it's not economical like current natural gas prices it, and
the what, what I hear over and over again is it takes about $4 to $4.50 of MBtu gas
prices to support new new drilling and the share of gas.
And, of course, it was below that so they, they started pulling out of
drilling new oils. And and just to show you how the prices
changed in march of 2012, we were getting natural gas at the wholesale prices that
are distributed for the gases distributed in Louisiana at the Henry Hub, which is
where it is priced. At $2 in the MBtu used, a year later
we're getting it at $4. So the net price of natural gas is
actually doubled approximately in the last year.
So prices are going up and that's going to take away some of the advantages, the
economical advantages, and savings in fuel in our cars and filling them with
natural gas rather than gasoline. So there are a lot, lot of factors here.
And people expect that price to, say 4, 5, $6 in order to have the increased
drilling activity that we have already and we hope will continue and even
increase. So a lot of things have to come to play
here and we're in a free market capital enterprise, capital economy here.
And if people aren't making money at it we're not going to get it.
what about the other, the other part of this natural gas vehicle equation and
that's the fueling stations? we got, if you got the cars that run on
natural gas and you got the supply, what, where you going to get the fuel?
you don't pull up to your friendly corner filling station and refuel your car with
natural gas. there are currently about a thousand US
refueling stations in the US and I believe there are somewhere around 300
thousand to half a million gasoline stations in the US.
that's coming off the top of my head so don't, don't quote me on that.
but anyway, about half of them, 500 of those are private fleet owned operators,
like the buses, and a lot of bus systems use natural gas.
I live in Atlanta, on Peachtree Street. Buses run up and down Peachtree Street.
Every bus that runs up and down Peachtree Street in Atlanta is fueled by natural
gas, has fueled for many years. And they go back, of course, every night
to the us, to their lot and they have a large natural gas refueling station they
refuel all the buses. so and, that, that's a private refueling
station, about 500 of the national natural gas refueling stations are open
to the public. so, the other issue is vehicle
conversions. How do you get people to buy vehicles
that are converted to run on natural gas, or do a conversion of the vehicle they
have? Well, it's an economic issue.
Here's some numbers that are recently been put out by the Department of Energy
in a request for a proposal, a funding opportunity that they want, they're
asking for proposals on how to reduce the cost of converting vehicles to fuel run
on natural gas. And here is their estimated current cost.
If, if you're going to get the masses to, and that's what you're interested in
here, is have a major impact on oil consumption to drive natural gas
vehicles. the one way, the great way to do it is
just refuel at home in your garage. And, that would require, that, right now,
that requires about a $4000 investment. Your storage tanks on your vehicle are
about $3,500. They're high pressure 4, 5,000 pounds per
square inch pressure vessels. And the balance of system calls to put it
all into the valves, and the fittings, and the controls, and everything is that,
is about $3,500, and the installation to put it all in is about 1,500.
So you're looking at about $12,500 for a person to convert his car to natural gas,
put a refueling station in his garage, which by the way, gives him the cheapest
natural gas, because he can buy it at the same rates that he buys the for his home
for heating. And, whereas, if you go to a public
refueling station, they're going to want to charge you more for the natural
gas than you can buy it for at your home. Because, they gotta compress it, and they
gotta have a refueling station, and they have to make a profit on that.
So, this is the way you get the cheapest natural gas is have your own station, and
that may or may not be worthwhile. But, for you to rely on public fueling
stations, we gotta have a major expansion of the number of refueling stations
available. The target, what they're asking for,
proposals that would reduce these costs that you see on the right-hand column
here down through the total package will be $4,000.
In part, remember, remember, we're talking about trying to get these
converted cars and natural gas cars out to the masses?
And, they're you, if you're auto geek, you can do it a lot cheaper and a lot
varied, a lot of variations there. We're talking about some mass, the masses
that don't know a lot about the car technologies, and who just want a nice
package, and is warranted, and just like with they bought a conventional gasoline
new car. and they don't want to pay a lot more
money you, you find out for 3 or 5 year payback, because their fuel is going to
be less. But that's some of the economics that
we'll have to deal with. So what's the summary here?
Well, for major impacts, a 25% reduction in the amount of oil demand for
transportation, we need about a 25% increase in gas production.
And the decrease, we need to decrease vehicle conversion cost to make
compressed natural gas vehicles appeal to the masses.
Questions that come are, that come up are, can we increase natural gas
production and will it be available for compressed natural gas transportation?
What's the time schedule for getting the reduced compressed natural gas
conversion, converted vehicles down, and the technology developed and deployed?
And what about refueling stations? So, there, lots of questions about
implementing this one possibility, that, for reducing our oil consumption.
And by the way, this is not something new.
One of the first things I did when I came to Georgia Tech as a faculty member in
the 1970s was I was, I was faculty adviser on, in Georgia Tech entry into a
cleaner car race where students developed a clean air cars, they, they, that was
controversial at that point in time and drove them from MIT in Boston,
Massachusetts to Pasadena, California in CalTech.
And we're, our entry was a compressed natural gas vehicles, and we drove it the
entire distance all the way from Boston to Pasadena on natural gas.
It's probably still the only vehicle that's been driven all the way across the
country on nothing but natural gas. We had a, had a truck that went with us
brought by the Atlanta Gas Light Company, and they refueled every night at a local
natural gas company. And, we would stop every hundred miles or
so and refuel from the truck. So it, it's not, not new technology.
We've known it could be done for many, many, many years.
And it's a matter of just how do we move it forward into mass adoption.
And that's the way it is, most of these solutions to our major issues for
reducing our oil consumption and decreasing our carbon emissions.
On carbon emissions by the way, natural gas vehicles will reduce carbon emissions
about 15% compared to gasoline and about 25% for diesels, because it got more
hydrogen per carbon atom. So it will cost 15 to 25% reduction in
carbon dioxide emission comparing to gasoline and diesel fuels vehicles.
So that's a little bit of winner there in moving in the right direction.
So up, think this is a good example of the depth that we need to look at all
these alternatives that people bring up to me.
About, well, we can just do, do xyz and it's got, doing xyz involves a lot of
things and they have some real show-stoppers.
but we now, under, have the data and know where to get the data in order to run all
these calculations. So, hopefully, you'll be able to look at
these possibilities a little more in depth yourself.
Thank you.