Is Liquified Natural Gas the fuel of the future? · 3/29/2013  · capability of cooling natural...

By Melinda McCutchen, PublisherWhile researching this special section, one

of the men I interviewed made a commentwhich I scribbled down in my notes. Whenreviewing these notes, I thought I must havewritten something down wrong and I wentback to him for clarification. I had notwritten it down wrong. The note actuallysaid that there was “every probability thatAmerica would be exporting natural gaswithin 5 years and that the majority ofvehicles on America’s roadways would befueled by natural gas.”

When I pressed him for substantiation ofthis prediction during the follow-up, hereferred me to a video produced byStansberry and Associates InvestmentResearch Analyst Frank Curzio. Curzio’svideo, though aimed at market investors,was all about a quickly emerging fuelsource – liquefied natural gas (LNG) or asCurzio calls it – Eagle Diesel. This fuel isalready in use by such widely knowncompanies as Walmart, UPS, FedEx, Pepsi,etc. One statistic from 2010 reported thatLNG displaced 360 million gallons ofpetroleum that year alone.

Others are also extolling the advantages ofLNG:

• “An immediate solution to the nation’senergy security needs.” US Dept. of Energy

• “A revolutionary type of fuel will soonbe on sale across the United States andCanada. Cheaper than regular gasoline, thisfuel promises to end US dependence onforeign oil and cut prices at the pump inhalf all at once.” Frank Curzio, Stansberryand Associates Investment Research Analyst

• “We’ve basically won the lottery.”Michael Ming, president of ResearchPartnership to Secure Energy for America

• “It’s the biggest energy innovation of thedecade.” Daniel Yergin, Chairman of theCambridge Consulting Group

• “It is astonishingly less expensive thangasoline. I suspect the cost of running anautomobile on it would generate a 50% fuelsavings.” Rick Rule, founder of Global

Resource Investments• “Frankly, no other energy souce can do

so much for America.” Denise Bode,Pres iden t o f American Clean SkiesFoundation

• “I’ve been in the energy business myentire career, and I can assure you this 81year old has chased down more deals thananyone you’ll ever meet. A lot of thosedeals didn’t pan out – that’s just how thegame is played. But every now and then abig kahuna comes along. When it does,you’d better jump on it. Right now, thatsort of game changer has landed in our lap.”Legendary oilman T. Boone Pickens

What exactly is Liquefied Natural Gas(LNG)?

LNG, or liquefied natural gas, is naturalgas that is cooled to -260° Fahrenheit untilit becomes a liquid and then stored ate s s e n t i a l l y a t m o s p h e r i c p r e s s u r e .Converting natural gas to LNG, a processthat reduces its volume by about 600 times– similar to reducing the volume of a beachball to the volume of a ping-pong ball –allows it to be transported internationallyvia cargo ships. Once delivered to itsdestination in the U.S. or abroad, the LNGis warmed back into its original gaseousstate so that it can be used just like existingnatural gas supplies, by sending it throughpipelines for distribution to homes andbusinesses.

When returned to its gaseous state, LNG isused across the residential, commercial andindustrial sectors for purposes as diverse asheating and cooling homes, cooking,generating electricity and manufacturingpaper, metal, glass and other materials.LNG is also increasingly being used to fuelheavy-duty vehicles.

Clean burning natural gas is used to heatand cool approximate ly 65 mi l l ionAmerican homes and power 23 percent ofthe nation’s electricity. Even thoughAmerica has an abundance of natural gas,LNG is essential to providing the U.S. withthe ability to import or export natural gas

depending on market conditions.LNG terminology• Import terminal – Facility that has the

capability of accepting and storing LNGfrom overseas. There are currently 12terminals operating in the United States andone in Puerto Rico.

• Export terminal – Facility that has thecapability to liquefy and store natural gas soit can be loaded on to ships and sentoverseas. Currently, there is only oneterminal in the United States with thiscapability.

• Liquefaction – The process of coolingnatural gas to -260° Fahrenheit until itbecomes a liquid, i.e. liquefied natural gas(LNG).

• Liquefaction plant – Facility that has thecapability of cooling natural gas to formLNG. This is also called an LNG exportfacility.vLNG – Liquefied natural gas, or naturalgas cooled until it becomes a liquid.

• Peak-shaving facilities – Facilities atwhich LNG is stored during periods of lownatural gas demand. When it is needed, it iswarmed back to gas and shipped to endusers.

• Regasification – The process of warming(LNG) until it returns to its gaseous state.

Currently, there are 34 LNG facilitiesaround the country with the capability ofoffloading LNG into trailers for truckdelivery to user sites. These facilities cansupply up to three million gallons of LNGeach day.

LNG fuel suppliers are increasinglytargeting the diesel vehicle market, whichconsumes 150 million gallons of diesel eachday. The trucking industry is by far theprimary consumer. However, by the end ofSeptember 2012, 47 fleets in the UnitedStates are either using LNG or are in theprocess of implementing the transition toLNG. At that time (end of 3rd quarter2012), these companies had a total of over4,000 LNG fueled trucks already inoperation.

Fuel of the Future! This is one of the LNG (liquid natural gas) refueling stations (above, left) already in operation. Currently, there arefive stations in Texas. UPS (above, right) is only one of many national carriers who have made the switch to liquid natural gas.

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Is Liquified Natural Gas the fuel of the future?