CNG as a Vehicle Fuel - One Way Nuclear Power Can Help Ease the Motor Fuel Crisis
Robert Bryce, the managing editor of Energy Tribune is one of my favorite energy thinkers. He is a throwback journalist with an inquiring mind who asks hard questions and really thinks through the answers. He has recently written a book titled Gusher of Lies.
I have not yet had a chance to read the book, but I recently listened to a Tavis Smiley show interview with Robert where he talked a little about one of the topics discussed in the book - the use of natural gas as a vehicle fuel.
This topic caught my interest as my energy obsessed brain began weaving several threads into a new pattern. One thread is the growing disconnect between the cost per unit energy of natural gas compared to diesel fuel in the United States. Another thread is a story that has been playing on my drive time radio station about the challenges that local school districts are facing as they prepare their student transportation budgets in the face of rapid increases in the cost of diesel fuel. The final thread is my continuing belief that new nuclear power plants have a role to play in alleviating our current energy crisis.
Let me try to weave those thread together in a cohesive way. In Europe, oil prices and natural gas prices have a definite linkage, but in the United States there are often market conditions where one fuel develops a significant cost advantage over the other. Such a situation exists today. To compare different energy fuels, we should think about convenience of storage, flexibility in consumption, delivery mechanisms, and cost per unit energy.
The traders have not made that last bit easy, over the many decades that energy fuels have been bought and sold, some rather unusual units have become the standard. Most of us are familiar with diesel or gasoline prices in $/gal, but natural gas trades in a unit that looks really strange the first time you see it - $/MMBTU. MM is the Roman numeral representation of thousand thousand or 1 million. A reasonably accurate thumb rule is that 7 gallons of diesel fuel contains one MMBTU.
If you take a look at one of my most frequently visited web pages - Bloomberg.com: Energy Prices you will find that heating oil - essentially diesel fuel without the taxes and retail mark-up - is trading today for $3.80 per gallon ($26.60 per MMBTU) while natural gas - again without retail mark-ups or taxes - is trading at about $13.00 per MMBTU. In the wholesale market, natural gas is selling at a 50% discount on a cost per unit heat basis compared to diesel fuel.
I work in Washington, DC and live in Annapolis, MD, so I see a LOT of buses every day. In our national capital city, about 1/3 of the 1500 buses run by the Washington Metro Area Transit Authority (WMATA) use Compressed Natural Gas (CNG) as their fuel source while the rest run on diesel fuel.
Most of the CNG buses have entered service within the past 7 years. They have won support from many environmental groups like the NRDC. Of course, not everyone likes CNG buses, people that prefer to sell diesel fuel and diesel engines, for example, have worked hard to prevent market share losses to the upstart competitor.
The DC area CNG buses are very obvious - some are painted with jungle scenes to emphasize their green cred while others simply have the large-letter marketing slogan - “This Bus Running on Clean Natural Gas” - plastered on three of the four surfaces of the vehicle. CNG works especially well for a large fleet that gets refueled at certain fixed stations and includes enough vehicles to support a specialized group of mechanics and parts inventory. CNG buses cost a bit more than diesel buses, but they can run more cleanly. When the fuel is available for a 50% discount, the economics look pretty attractive.
As school districts struggle with the high cost of diesel fuel for their bus fleets, perhaps it is time for more of them to take another look at CNG if they are planning any large scale bus replacement purchases. The National Renewable Energy Laboratory (NREL) produced a comprehensive study of the choices titled Washington Metropolitan Area Transit Authority: Compressed Natural Gas Transit Bus Evaluation in April 2006. In order to use the study for a current decision, it is important to update the fuel price figures; the market has changed quite a bit since the evaluation period (2001-2002).
One more thread to tie in. One big frustration from my involvement in numerous energy related debates is that people with an anti-nuclear position often dismiss the value of increased use of nuclear power with regard to helping to meet the demand for motor fuels. Their line is that nuclear power is only useful for producing electricity - which is demonstrably not true - and that oil is used for transportation, not electricity production - which is also not true.
All that aside, there should be no argument that natural gas is most definitely used for electricity production (approximately 20% of the electricity in the US comes from burning natural gas), that the increased use of gas in electricity has caused part of the 600% increase in natural gas prices over the past 10 years, and that new nuclear power plants can displace some of that gas to make it more available for other uses. If there is more gas available, it would make CNG vehicles even more competitive against diesel fuel vehicles.
The law of supply and demand has never been repealed - if the demand for gas in electrical power plants goes down, the price of gas will go down until other customers enter the market to purchase that newly available supply.
Photo Credit WMATA Photo by Larry Levine
Posts Related to Compressed Natural Gas and Oil:
- Natural Gas Cars: CNG Fuel Almost Free in Some Parts of the Country
- The Cleanest Cars on Earth?: Honda Civic GX and Other Natural Gas Vehicles (NGVs)
- Offshore Drilling Ban Opens Discussion for Other Domestic Oil Options
- US Will Export $440 Billion For Oil In 2008
- The Growing Need for Fuel Substitution, Efficiency, and Conservation
Hi,
CNG can be a good alternative as an intermediate solution to hydrogen power. As mentioned in http://www.grumpyoldman.be/grumpys-news-flashes-xx/ one seems to have understood this in The Netherlands. One doesn’t seem to be that far yet. There is only one car available and there aren’t any public filling stations. Thus one need to pay 4780 Euro for the filling station at home + 800 euro extra installation costs.
Eddy
It’s my first time on your blog and I will be returning and subscribing!
Green Shop: Thanks! We’ll ’see’ you around…
I agree that CNG is a good fuel for fleet vehicles and at the present moment it makes sense economically too. However, North American production of natural gas appears to be in decline especially in Canada. The DOE and others are predicting massive increases in the importation of LNG which will increase the exportation of American dollars to unfriendly nations.
Yes nuclear power may be able to offset some of the use of natural gas in power plants (and oil is used in very, very few power plants in the US mainly in AK and HI) but there are several problems with this.
1. Nuclear power is great for baseload power which is sometimes provided by natural gas plants but the majority of natural gas plants are highly inefficient peaker plants which are basically inverted jet engines and run only when needed for times of high demand. Nuclear power cannot fill this gap.
2. Construction of new nuclear plants is extremely expensive undertaking. How expensive? Well we don’t know. During the decline of nuclear power in the 1980s most new plants overran costs projections by hundreds of percent and billions of dollars. It is estimated that any new plants will cost about $3 B but no one knows - they cost that much in the 80s and judging by inflation I think at least $10 B is a fair estimate. Much talk has been made about standardization of nuke plants but currently there are a few designs being put forth by GE, Westinghouse, etc. And several will need to be built before any standardization occurs. Add that to the fact that Wall Street has refused to back the construction of nukes due to the uncertainty of prices, NIMBYism, general opposition to nukes (although declining), the unknowns of nuke waste (see below). These financial problems persist after billions in subsidies, loan guarantees, and liability caps. Finally, deregulation of utilities has raised the cost of debt to generators because they can no longer pawn off their costs on ratepayers - which was also questioned by the Supreme Court (see Duquense Light Co. v. Barasch)
3. Nuclear waste still is an unresolved issue. If Yucca ever opens up, which I doubt, it will not be long before it has been filled. Already Nevada has sued as will every state that the trains pass through on their way to Yucca. On site storage seems to be working but many of the older sites are running out of space which is a serious problem for the companies and a major concern for local citizens. Deep hole boring also seems like a good idea but reliable cost estimates are not available and no long term studies about seepage have been conducted.
All that being said I don’t think nukes will help our liquid fuels or our electricity problems. Reprocessing is no solution either it is cost-ineffective and still leaves substantial waste which is then weapons grade. Not good. Hate to rain on your parade but its back to the drawing board.
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Energy guy,
DOD and the British tried to make weapons grade material out of power reactor waste and it didn’t go well, the bombs are more difficult to make and they fizzled anyway. Anyone wanting to make a plutonium bomb would build a heavy water fast neutron reactor or a graphite pile reactor, not a power reactor.
The nuclear waste issues will be resolved through technical means. There are several ‘deep burn’ projects now being pursued to eliminate the waste through re-use and transmutation. Also, one of the Gen. IV designs called the Molten Salt Reactor, or Liquid Fluoride Thorium reactor, can be feed transurantic waste and burn it down to short lived fission products. Build a couple dozen of these and over 50 years we could probably get rid of the majority of Neptunium 327. High level waste (which is largely fission products, not transuranics) can be vitrified, Their half lives reach up to 30 years, by the time the glass they are fixed in erodes and releases them, they will be have been cold for centuries.
All of your economic arguments are dated or skewed. First of all, as Germany is waking up to realize with their news that they are going to have to build 18 new coal plants as they phase out their nuclear plants, the only real alternative for base load generators are coal fired plants. The cost of a new coal fired plant the size of a nuclear plant is around $2bln dollars for the very same reasons that the price for the nuclear plants have gone up. There has also been and inversion concerning the two. There is now less opposition (except for people apparently lobotomized in the 1970’s towards nuclear than coal. Kansas, for instance, completely blocked the production of a new coal plant on environmental grounds. So far there has only been fairly flaccid opposition to the nuclear plants being proposed.
I personally see the opposition to nuclear power to be extremely immoral. Coal has blood on it from miners deaths, both acute and due to long term chronic diseases. Do a quick Google earth on Southern West Virgina and North Eastern Kentucky. Keep the zoom around 5-6 clicks up from the bottom. All those irregular tan patches are what is left of mountain tops that have been pushed over into adjacent valleys to get at the coal under them. How does one add in the cost of this scale of destruction to coal generated electricity? The damage is extensive now, but this is just a snapshot of an ongoing process. This also constitutes a mind blowing amount of petroleum. It takes a lot of energy to do that scale of earth moving, we dig out 3.8 billions tons of coal a year, but that is a fraction of the tonnage of earth that needs to be moved. We also transport all that coal across the country. That can’t be a low carbon process either.
Coal sits in the ground as a giant Brita filter, absorbing mercury, chromium, arsenic, lead, uranium and thorium, in addition to other heavy metals. 40% of all the mercury pollution in the environment comes from coal combustion, how does one put a price on this level of destruction? Burning coal also produces micro-particulate pollution that no less than the Bush administration estimates kills 12,000 Americans a year. We are burning more and more of the dirty brown coal.
Finally, the price of coal per ton is now around $100. It was, a couple years ago, $25. The major expense that an operator of coal plant has to deal with is the price of fuel. It will take half a billion dollars in recurring cost to run the coal plant, over against $10 in capital cost plus $30 mln in recurring cost for a nuclear plant. Coal will probably be up to $200 a ton by the time the control rods are moved out on the first new plant in this country, and I am being extremely conservative in my estimate. That is a billion dollars a year in recurring cost without cap and trade or similar tax structures to make coal come close to what it really costs us. A Westinghouse AP-1000 is supposed to last 60 years, amortize these figures out and see if it isn’t cheaper to go nuclear in strictly economic terms and then throw in the differences in pollution and environmental terms and see if it is more desirable in moral terms, even with the tiny amounts of waste it produces.
In terms of transportation, use the overnight excess capacity of the nuclear power plant to power plasma guns to make SynGas out of our garbage in a Coskata-like method of ethanol production. During the overnight period one could make enough syngas to feed huge arrays of bio-reactors 24/7. This, plus plug-in hybrids and electric cars, which should be commercially available when the proposed nuclear plants come on line, would also decrease our need for oil.
The major issues wityh CNG are the limited range or the lack of energy density. The perception that you go further on diesel is based on the fact that there are more GJ of energy / liter than comparable fuels, petrol kerosene etc.
It therefor makes sense to run large earhmoving plant and mining plant on CNG because they load and dump and return to a load site and have a closed loop haul circuit , consume a lot of diesel, 1500L per 12 hoiur shift and are concentrated in one location. If anyone knows of a mine running on this basis I would appreciate the feedback please.