Friday, April 6, 2012

The end to US oil imports: Natural Gas





Natural gas powers more than 100,000 vehicles in the United States and roughly 11.2 million vehicles worldwide.Natural gas vehicles (NGVs) are a good choice for high-mileage fleets—such as buses and taxis—that are centrally fueled or operate within a limited area. The advantages of natural gas as an alternative fuel include its domestic availability, widespread distribution infrastructure, low cost compared with gasoline and diesel, and clean-burning qualities.

What is natural gas?
Natural gas is an odorless, nontoxic, gaseous mixture of hydrocarbons—predominantly methane (CH4). Because it is a gas, it must be stored onboard a vehicle in either a compressed gaseous or liquefied state. Compressed natural gas (CNG) is typically stored in a tank at a pressure of 3,000 to 3,600 pounds per square inch. Liquefied natural gas (LNG) is supercooled and stored in its liquid phase at -260°F in special insulated tanks. Natural gas is sold in units of gasoline or diesel gallon equivalents based on the energy
content of a gallon of gasoline or diesel fuel.

U.S. Natural Gas Pipeline Network


How much do NGVs cost? 

Light-duty NGVs cost $5,000 to $7,000 more than comparable gasoline vehicles, and heavy-duty NGVs cost more than their counterparts by $30,000 or more. The price depends on the fuel-tank capacity and whether the vehicle is produced by an OEM or converted to run on natural gas. However, government incentives are available to offset NGV costs. For more information, visit the AFDC’s Incentives and Laws section at www.afdc.energy.gov. Due in part to the high octane rating and clean-burning properties of natural gas, some fleets have reduced maintenance and operating costs for NGVs compared with conventional vehicles.

Fuel Price and Rate of Increase

The VICE model's diesel fuel price of $2.563/gal is the average of the most recent 12 months (ending February 2010) listed by EIA (2010a). The natural gas price of $1.183/DGE is taken as the commercial price listed by EIA (2010b) and converted from cubic feet to DGEs using EIA's conversion factor of 1,028 Btu per cubic foot. Both diesel and natural gas fuel prices are averaged over the most recent 12 months to take into account seasonal changes.It should be noted that fleet operators frequently purchase their natural gas for less than the commercial price mentioned above. They can do this by purchasing from a gas marketer in
deregulated markets, from a commodities market, or from a middle man that purchases from the market and sells a contract to provide fuel and optional services for a given amount of time. These other purchasing avenues are not used in the model because they are less common and have no common price that can be tracked and forecasted.

Diesel fuel is projected to increase at a linear rate of 5.6% per year, and natural gas is projected
to increase at 1.6% per year. These are the rates that EIA projected for the 15 years between
2010 and 2025 (EIA 2010c), as shown in Figure 4 below.

diesel - natural gas price 2010 2025

Where is natural gas available? 

According to the AFDC, there were 827 CNG and 38 LNG stations in the  United States as of February 2010. To find natural gas station locations, visit the Alternative Fueling Station Locator at www.afdc.energy.gov/stations.

Natural Gas Fueling Station Locations




U.S. natural gas net imports at lowest levels since 1992..  

The preliminary estimate of U.S. natural gas average daily net imports—imports minus exports—was just over 5 billion cubic feet per day (Bcfd) in 2011, which was the lowest level since 1992 (see chart above). Net import declines are due to both lower imports and higher exports; U.S. net imports of natural gas peaked in August 2007 at 10 Bcfd, and have fallen markedly since.

U.S Natural Gas Net Imports


Imports

The United States imports natural gas via pipelines from Canada and Mexico, and from tanker deliveries to liquefied natural gas (LNG) terminals. Some key points include:
The vast majority of U.S. natural gas imports arrive via pipeline from Canada (see chart below). Significant increases in U.S. natural gas production have led to decreased U.S. demand for Canadian natural gas. Imports from Canada for 2011 were significantly below the previous five-year range, and have been lower for much of 2012 so far (some of this decline, however, can be attributed to warmer-than-usual weather across much of the United States).

U.S Natural Gas Production




LNG is the other main source of imported natural gas, however average daily deliveries from U.S. LNG terminals from January 1, 2012 through March 15, 2012 averaged 0.6 Bcf/d, down about 44% from a comparable period in 2011. Higher natural gas prices in competing markets abroad are attracting "spot" LNG cargoes that can be delivered under flexible pricing terms. LNG imports through U.S. terminals peaked in 2007 at over 2.1 Bcfd.

U.S. natural gas imports from Mexico are negligible, totaling just 2.7 Bcf, or about 7.3 million cubic feet per day in 2011. Imports from Mexico enter primarily through southern Texas and southeastern California.

U.S. Natural Gas Proved Reserves


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