January 25, 2012

Yes We Can ... Shift North America to Natural Gas

In last night’s State of The Union address, U.S. President Barack Obama outlined his plans for national economic stimulation, underpinned by a focus on job skills, domestic energy - particularly natural gas - and manufacturing.
“The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don't have to choose between our environment and our economy,” said President Obama.
Energy and manufacturing are critical for economic recovery, and by focusing on natural gas as an energy source for transportation and industry, President Obama estimated that 600,000 new jobs will be created by 2020.  

While the U.S. administration is also looking at how to best use domestic oil supply, it recognizes that alternative energy sources are going to play a critical role in the country’s manufacturing and transportation success.

There are limited alternatives to petroleum based fuels, giving great promise to liquified natural gas (LNG) for the long-haul heavy-duty vehicle sector, which consumes 15 percent of on-highway transportation oil in the U.S. 

To transition long-haul trucking fleets, Westport, Clean Energy Fuels, and Chesapeake are tackling this head on by developing the technologies, infrastructure and resources that will support this critical stimulus.  For example, on January 12, Clean Energy Fuels announced its route plan for the first 150 liquid natural gas (LNG) fueling stations for heavy-duty, on-road trucking. The company anticipates having 70 stations open by the end of 2012 in 33 states.

According to the U.S. Department of Energy, there are 5,000 truck stops selling diesel across the country, but only 45 stations that sell LNG, and most of those are in California. What has been needed to spur more investment and interest in building infrastructure is the political will…and last night’s SOTU was evidence of that. 

A shift to natural gas will not only spur activity in this energy market, it will create significant savings for long-haul truck operators and fleets that can in turn be re-invested in the economy. The U.S. Energy Information Agency says that natural gas, on average, costs 42 percent less than diesel fuel on an energy equivalent basis and is expected to cost 50 percent less by 2035.

There are also, as the President alluded, environmental benefits in a shift to natural gas for transportation. Natural gas has the lowest carbon content of all fossil fuels when sourced from domestic reserves.  A Westport HD truck powered by LNG will generate 18-25% fewer greenhouse gas (GHG) emissions than a comparable diesel truck. 

Reliance on foreign oil is a security issue for the United States.  With access to high volumes of inexpensive, domestic natural gas, policies that will shift industries to this resource will enhance energy security and provide a critical boost to the American economy.  More than 50 percent of the oil used every day in the U.S. is imported, while 89 percent of the natural gas used is domestic according to the Energy Information Administration report on Natural Gas Imports and Exports. By promoting greater use of natural gas in industry and transportation, the potential costs savings and implications for re-investment in the American economy are huge

This address signals an important new focus of support for natural gas in the trucking industry across the U.S., as part of an overall solution for reducing dependence on foreign oil, invigorating the American economy and transitioning to a lower-carbon fuel in the transport sector.

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