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Oct09

Is Gas Price Relief Ahead in the Natural Gas Boom?

BY KATE KUNKEL

UPS truck refuelingIn the Summer 2013 edition of VALVE Magazine, several pages were devoted to a discussion of the debate and opportunities brought about by the natural gas boom. A great deal has also been made of the potential for a resurgence in the American manufacturing sector thanks to what is being called the “shale revolution”, but generally speaking, it has not made a huge difference in the way people get around in their cars, trucks or buses.

A big reason for that is because until recently, there has been no infrastructure to support the move to LNG powered vehicles. Where would you fill up if your car ran on natural gas?

It seems, however, that the tide is beginning to turn, starting with the news released this week that UPS is spending $50 million to more than triple the current number of liquefied natural gas fueling stations it owns. United Parcel Service (UPS) and companies like it which have huge fleets of vehicles are trying to capitalize on the low price that has been made possible in the U.S. by new drilling technology.

Even though UPS began adding natural gas tractors to its fleet in 2002, it had only 4 fueling stations. In the recent announcement, the company announced it will build nine more in Florida, Illinois, Indiana, Mississippi, Missouri, Ohio, Pennsylvania and Texas. It is a huge investment for the company, which has 1,000 natural gas powered tractors on the roads.

This is a good start, but it’s taking awhile for other trucking companies to make this kind of investment in infrastructure. And despite the fact that the natural gas industry is making a big push for passenger vehicles that run on natural gas, there are few choices for American motorists looking to buy a car, van or light truck that runs on the fuel.

In recent data from the U.S. government, the price difference between gas and CNG was substantial. Compressed natural gas was selling for $2.10 per gallon equivalent in the U.S. compared to $3.59 per gallon for gasoline and $3.99 per gallon for diesel fuel. That’s a healthy difference, although you would have to travel many miles to make up the difference in money spent on a vehicle that runs on CNG.

An example is the forthcoming natural gas version of Ford’s F-150. The company says it plans to harden valves and other parts at the factory, then hand the prepared vehicle to an upfitter for fuel systems. All of this would cost more than $7,500 to the purchaser. Definitely not something regular consumers would likely be willing to pay; this would appeal more to purchasers of fleet vehicles.

And, of course, the fact that there are few refueling stations accessible by ordinary consumers is also a challenge.

But – these are some promising signs. For manufacturers of valves, CNG or LNG refueling stations could be a promising market. For commuters tired of the high price of gasoline, they could mean welcome relief. It’ll be interesting to see how long it will take for North America’s fuel delivery system to catch up with the natural gas boom to help cut fuel costs for the average consumer.

Kate Kunkel is senior editor of Valve Magazine. Reach her at This email address is being protected from spambots. You need JavaScript enabled to view it..  

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