As US natural gas producers note the benefits of existing infrastructure while seeking ways of stimulating demand for newly abundant shale gas, questions continue to swirl about the total cost of conversion.
Beyond the potential of natural gas for the long-haul trucking industry, as championed by Texas oilman T. Boone Pickens, gas advocates say private cars are a clear target market, since gas as an auto fuel is currently roughly less than half the cost of gasoline, while at the same time emitting much lower levels of greenhouse gases.
Champions of the “shale gale” say natural gas vehicles emit 29 percent fewer greenhouse gases, and much lower levels of other air pollutants. Now near decade-low prices, natural gas is expected to remain stable, offering drivers a refuge from high and volatile gasoline prices.
The number of natural gas filling stations has been growing at an annual rate of 11% since 2009 and is set to top 1,000 this year, helped by a program led by Pickens’s firm Clean Energy Fuels, producer Chesapeake Energy, and Pilot Flying J, a network of travel centers focused on the trucking industry.
Natural gas just isn’t the right way to go” – Laura Scott, Gulf Oil
But that’s a drop in the bucket compared with the approximately 160,000 gasoline stations that some advocates say would have to be refitted to also sell natural gas.
It costs roughly $1 million to build out an existing gasoline station so that it can also supply natural gas for cars, according to Laura Scott, Senior Vice President for Finance and Strategy at Gulf Oil. To meet drivers’ demands for a filling station on every corner would cost $160 billion, a prohibitively large sum that stands in the way of wide-scale adoption for the fuel, she said.
“Natural gas just isn’t the right way to go,” Scott said at a Philadelphia conference on alternative fuel vehicles on May 31.
But a leading advocate for natural gas as a transportation fuel argued that it’s not necessary to convert gasoline stations to natural gas in order to make the fuel widely available. Kathryn Clay, Executive Director of the Drive Natural Gas Initiative, said drivers can fill up with natural gas by adapting their homes to supply their cars.
That technology, contained in a box about the size of a microwave, currently costs about $5,000 but the industry is investigating ways of sharply reducing the price so that drivers can recoup their investment more quickly.
“We think the right price point is probably $1,500,” Clay told Breaking Energy.
With 63 million homes and 2.4 million miles of pipeline on the natural gas distribution network, the nation is closer to having the infrastructure in place for the wide-scale adoption of natural gas for transportation than some would believe, Clay said.
“You don’t need filling stations if you have home refueling lines,” she said.
Scott conceded that home fueling may be a less-costly way of making natural gas widely available for cars than refitting thousands of gasoline stations, but argued that the adaptation of private gas lines would need the approval of regulators.
A better solution would be to pursue the wide-scale adoption of electric vehicles by using the national grid, whose peaks and troughs in power supply are compatible with the daily charging demands of the average driver, she said.
A 240-volt phase 2 charger, for example, can charge an EV’s battery in about eight hours, using off-peak electricity without the heavy cost of new natural gas infrastructure.
“In order to charge your cars at home using the gas delivery system, more investment is needed versus the electric system,” Scott said. “Natural gas doesn’t have the same diurnal peaks and valleys that the electric market does.”