Natural Gas: Another Great Thing from a Lobby Near You

Robert Rapier, writing in The Oil Drum (here), has calculated that we could replace all gasoline currently consumed in the United States with natural gas (NG), while still continuing current NG usage, for as long as 53 years. He arrives at this figure using published totals for proven reserves plus the sum of the nation’s probable, possible and speculative reserves. The duration is shortened to about 20 years if only proven and probable reserves are included.

This approach to energy policy was popularized last year by T. Boone Pickens. His Pickens' Plan (here) is still going strong, although Pickens' wind farm plans and advertizing campaigns have been slowed by reduced availability of financing. If the cost of oil continues to rise, this activity will probably speed up again.

If we were to replace all petroleum based imports, Rapier projects that the length of supply for NG is reduced to 43 years (or 14 years counting only proven and probable reserves). So, completely eliminating petroleum based imports with NG soon is not only impractical based on the difficulties in staging the change-over, but also from the limitations on the supply as well.

So, if we were to move in this direction, over some sort of time frame like 10 years, to replacing 1/4 of imported oil, we could very well have a 35 to 65 year supply of NG. The exact number of years would depend on how much of the possible and speculative reserves actually come on line.

Rapier points out a major barrier to moving in this direction by conversion of existing gasoline powered autos to NG is the conversion cost. Currently, there is also a stiff premium to buy an EOM NG vehicle. He says:

According to this source,it can cost $12,500 to $22,500 to convert a gasoline-powered car to natural gas. Honda makes a compressed natural gas (CNG) vehicle, but according to this review in Car and Driver the premium over the gasoline version is $8,780. A person would need to drive an awful lot to justify that premium. However, that's what fleets do. They drive a lot. The large price differential explains why fleets would be interested in running their vehicles on natural gas.

However, there is more to this cost story than is evident in the above quote. According to Marc J. Rauch, Exec. Vice President/Co-Publisher, THE AUTO CHANNEL, quoted in the Rapier article:

...the cost of CNG conversions for existing vehicles is as high as it is because of EPA licensing requirements. For an individual (or shop) to be licensed to do a conversion, the person must pay $10,000 per year, per engine type, per year of manufacture. So that if a conversion shop wanted to do conversions in 2009 for Camrys for the years 1995 to 2005, the shop owner would have to pay the government $100,000 in licensing fees. Then, if he wanted to do conversions on the same models in 2010, he would have to pay the $100,000 again, even though they are the exact same models and engines that he has been licensed on already. And if there is more than one engine involved, i.e., a 6-cylinder and 8-cylinder, the cost would double.

Therefore, if a shop owner wanted to do 10 model years of Camrys and Corollas and Celicas, and well as Honda Accords and Civics, unless there were common engines being used in these five models the licensing cost (for just one engine per) would be a half million dollars, which would have to be paid again in 2010. These fees are, needless to say, ridiculous and are only there to ensure that many don't get done (thanks to the gasoline lobby). The cost of the conversion kits are actually relatively inexpensive. If there was a sensible licensing fee (or no fee) the cost for the work could be just a few hundred dollars.

It seems that your friendly petroleum/gasoline lobby has been at work here. Of course, their motivation was to protect the consumer from unqualified work on their car which could result in dangerous malfunction. (Hint: I am capable of sarcasm.) So what could be done for a few hundred dollars per car costs 20-50 times as much in added licensing fees.

If you Google the subject, you will find a number of on-line sources for CNG conversion kits, at-home garage compressors for fueling and other interesting items related to this topic.

However, even if you have (or know someone with) the competency to install a conversion kit, you may not be able to get your vehicle inspected. In most (if not all states), you will be subject to misdemeanor prosectution for operating an uninspected vehicle after repeated citations are issued.

There are procedures for obtaining vehicle emission inspection certification, as described here:

One potential hoop to jump through could be emissions certification for your particular state—some states require special conditions since you'd be changing the vehicles "engineered" fuel type. They all differ, and some are easier to work with than others. The U.S. Department of Energy offers this emissions certification information and CSA America offers a searchable database of compressed natural gas cylinder inspectors.

All this discussion brings me to one final ranting conclusion: It is not the government that is creating our biggest systemic problems, it is the interests that have bought the government.

I repeat (again) one of the most prescient and pertinent quotes of recent times:

"This place is bought and paid for." Sen. Dick Durban (D, Ill), referring to Capitol Hill.

Comments

[The Greates...:]

Just ask Mr. Pickins, NG is the future!

Aug 02 11:18 AM

[Jimbo:]

Senator Durbin is quite correct when he says Washington is bought and paid for. Unfortunately, I suspect Senator Durbin is also a beneficiary of lobby money. The prophet Obama initially agreed with John McCain to use only public funds for his campaign but when he saw the amount of money coming in from private sources, he bailed. The "free press" didn't seem to notice.

Aug 02 11:28 AM

[Jimbo:]

By the way, the Dutch have been using natural gas as fuel for things like taxis, for years. Every filling station I saw in the Netherlands had a natural gas dispensing pump.

Aug 02 11:31 AM

[Ferdinand E...:]

Really really important article. The comments are important also, and like the article deserve the widest possible circulation. I was told a couple of years ago that conversion costs for existing vehicles would stop this nuttiness about making NG a prime vehicle fuel, and took the liberty of mentioning it in my new energy economics textbook, but even if that were not the case, I DO NOT BELIEVE THESE CLAIMS THAT AN INCREASED GROWTH RATE IN THE SUPPLY OF NATURAL GAS HAS COME ABOUT, AND THIS WILL CHANGE THE SUPPLY-DEMAND PICTURE FOR NG IN NORTH AMERICA..

Aug 02 11:51 AM

[mouth:]

One simple soluion. Only allow new 4 and 6 cylinder vehicles to be produced for the US market. Very simple.

Aug 02 12:38 PM

[notsosmart:]

as long as oil is available the oil co's lobby will control wash.dc.all the sqawking on this & other sites wont mean a thing.

Aug 02 02:04 PM

[John Lounsbury:]

Readers - - -

Thanks for the insightful comments.

Fran - - -

I have not reviewed the pending legislation - could have written a much better article if I had. Also, I have not reviewed Sen. Durbin's positions, voting record, or contributions status. At the risk of being presumptuous (and therefore exposed to being criticized by some one with facts), I would hazard a guess that his record is not all that different from many in his party on all counts. He will always be memorable to me for the offhand quote made in a moment of frustration.

I should dig deeper and review pending legislation. I'm hot on some other projects for the coming week, so it will wait at least that long to get started.

Prof. Banks, jerrydd, whisperonth.. (and others) - - -

I expect that NG will become (if implemented at all) a niche player, as increased popularity of hybrids, diesel and continued use of gasoline are likley. That is why I suggested a 25% implementation as a possibility. My main purpose in writing this article was to point out that there have been legislated artificial barriers to even getting started at all.

mouth - - -

Good point but I would add some additional thoughts.

1. Performance from 4-cylinder hydrids can exceed many 6-cylinder ICEs and some 8-cylinders, as the electric drive boost can produce excellent acceleration.
2. Towing power for commercial applications may need larger ICE engines. Many of these applications are using "light-duty" trucks. We either need continued production for these work applications or new drivetrain designs using newer technologies.

Aug 02 02:41 PM

[Mad Hedge F...:]

Look at Apache. “What’s happening in shale gas is that in three years we’ve gone from a nine year reserve life to a hundred year reserve life,” said Steve Farris, CEO of independent oil and gas production and exploration company, Apache (APA).

Aug 02 03:44 PM

[MudEngineer:]

I work in the oil industry and have spoken to one of the Shell people who has worked on oil shale projects. Thus far, the amount of energy spent to get out the oil from the shale exceeds the energy that they get from the oil in the shale. Therefore without new and more efficient technology, oil shale is a no-go. Shell has worked on this for over 20 years with no cost effective solution found yet!


On Aug 02 09:33 AM mc2406 wrote:

> Leave it to our professional politicians and their lobbyist whores.
> The same thing has been going on for years with respect to developing
> oil shale projects (particularly in Western Colorado)-- environmental
> permits, studies, delays, etc. Between natural gas and oil shale
> oil America has enough reserves to be completely independent of foreign
> oil for many generations if they would only let us go for it. FIGURE
> IT OUT- Washington.

Aug 02 05:26 PM

[ripskii:]

These license fees for conversions are clearly protectionist hurdles put in place by the oil industry to prevent the use of NG. I wonder if either Sen 1405 and HR 1835 bills address this issue? Hopefully those writing these bills are aware of the problem these fees present to conversion to NG use and will remove them in any legislation they propose.

Aug 02 05:43 PM

[Daxtatter:]

Well the most efficient use of natural gas isn't using it in a ICE, but using it in combined cycle natural gas plants and using it to power batteries, or even better using it in a cogeneration plant.

Combine a program to support natural gas vehicles, and at the same time do a massive weatherization program, you may have a winning combination.

Aug 02 05:47 PM

[fran:]

email your questions and positionto the authors of bills and your 3 legislators.



On Aug 02 05:43 PM ripskii wrote:

> These license fees for conversions are clearly protectionist hurdles
> put in place by the oil industry to prevent the use of NG. I wonder
> if either Sen 1405 and HR 1835 bills address this issue? Hopefully
> those writing these bills are aware of the problem these fees present
> to conversion to NG use and will remove them in any legislation they
> propose.

Aug 02 06:31 PM

[skrangeo:]

brilliant! just think of all of the new 18 wheelers powered by 260 HP V6's!

And what about your standard "work" truck? How many 4 cylinder trucks do you see hauling trailers and trucks loaded down with equipment at construction sites?


Yes, only 4 cylinders and 6 cyclinders is OBVIOUSLY the solution

/deep thoughts by Jack Handy


On Aug 02 12:38 PM mouth wrote:

> One simple soluion. Only allow new 4 and 6 cylinder vehicles to be
> produced for the US market. Very simple.

Aug 02 11:20 PM

[skrangeo:]

clearly put in place by "oil" companies. Because, of course, they don't produce natural gas themselves.

LOL

I love the "oil company" conspiracy theories. Love it.

These are the same "oil companies" who are buying the "100 mpg" engines off of the market before the public knows about it. Hardy har har!


On Aug 02 05:43 PM ripskii wrote:

> These license fees for conversions are clearly protectionist hurdles
> put in place by the oil industry to prevent the use of NG. I wonder
> if either Sen 1405 and HR 1835 bills address this issue? Hopefully
> those writing these bills are aware of the problem these fees present
> to conversion to NG use and will remove them in any legislation they
> propose.

Aug 02 11:23 PM

[376602:]

(1) Class action lawsuits led to the discovery that Detroit Auto Industry placed savings and profits above human life and limb. (2) Computers, electonic ignitions and fuel injection system are required by LAW to meet EPA standards. (3) Unlicensed, unregulated modfications are ILLEGAL. It not only protects the Life and Safety of the Owners, the Air Quality, but the very highly profitable Auto Manufacturers and Dealer aftermarket service PROFITS. -slamming gasoline dealers and refiners is gratutously simple-minded. 30-years ago, independent mechanics or owners could work on vehicles; also, gasoline and diesel fuels were not yet regulated by the EPA for each state and county. A job with the Empire Protection Agency is a job for life with fringe benefits until death. ---jobs not to enter? oil worker, auto mechanic...


On Aug 02 07:57 AM basehitz wrote:

> It is shameful that Washington not only fails to promote NG as a
> bridge fuel, but as you've highlighted impedes this process >through laws derived by questionable practices.
>
> I have stored this article for future use. Many lawmakers have >demonstrated they will sacrifice our interests for favors to special >interests. But if confronted persistently, fear of losing re-election >will persuade
> some. Thanks.

Aug 02 11:45 PM

[quick:]

Yes, it's a shame, but big business pretty much rules the decision making in Washington, and us little guys don't really have much of a say in anything.

Aug 02 11:59 PM

[fran:]

J. LOUNSBURY--

late comment on nat gas--for futures on supply, make yourself aware of methane hydrates. some interesting results from DOE recent result, including last month's report to congressional commitee.

Aug 03 09:39 AM

[John Lounsbury:]

Thanks, Fran - - -

I am only generally aware of methane hydrates, not the recent reports. There are vast amounts of methane hydrates trapped in deep ocean depths and frozen polar regions. There are debates about how to control the release of these if ocean water temperatures rise and if permanently frozen areas thaw. These are very high energy density fuel materials and have great potential if an economic means of capture can be devised.

Aug 03 03:20 PM

[TinyTim:]

Thanks, John.

In about 1996, an Arizona State legislator named Jeff Groscost passed a law providing big rebates for new alternate fuel vehicles.
Immediately, a cottage industry sprang up doing conversions at dealers for about $1500 and propane tanks magically showed up at many, many gas stations.

Unfortunately, the program became too popular and exclusive among Jeff's friends, it blew the budget and subsequently became known in AZ as the alt fuel fiasco. I still occasionally see an NG or propane Suburban on the road.

I just point this out as an example of what happened before all the legislated artificial barriers, the potential of an NG program and the ease with which it was implemented.

Aug 03 04:26 PM

[fran:]

J. LOUNSBURY--

i am well aware of subject potential/status. i thought that while you're covering the NG topic in your articles, a person whose work gets such high visibiity as yours receives should be aware of the next large potential source of futuire NG. its potential contribution should not be overlooked. it could surpass shale's contribution. shale's contribution had been under played for years--awaiting economic fracing.


On Aug 03 03:20 PM John Lounsbury wrote:

> Thanks, Fran - - -
>
> I am only generally aware of methane hydrates, not the recent reports.
> There are vast amounts of methane hydrates trapped in deep ocean
> depths and frozen polar regions. There are debates about how to control
> the release of these if ocean water temperatures rise and if permanently
> frozen areas thaw. These are very high energy density fuel materials
> and have great potential if an economic means of capture can be devised.

Aug 03 07:56 PM