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.