Posts

Arctic Leaf

Making the Case for Mars and Methanol

/in , /by

Robert Zubrin is one of those oddball geniuses who prowl around the peripheries of important national issues making suggestions that may seem completely off the wall but on closer inspection are revealed to have penetrating insight.

I first came across him a couple of years ago while writing about space exploration. Zubrin is perhaps the world’s leading advocate of manned trips to Mars. He’s written five books about making the trip to Mars, including How to Live on Mars (2008), which detailed how to establish a permanent colony on the red plant. None of this is going to happen soon, of course, and even though Zubrin is a highly trained aerospace engineer, it’s easy enough to dismiss him as a fatuous dreamer.

Except for one thing: he has also become the most knowledgeable and well versed advocate of substituting methanol from natural gas for imported oil as a way of breaking the back of OPEC.

Zubrin actually wrote his first highly informed book on the subject – Energy Victory – in 2008, before the fracking revolution began producing prodigious amounts of natural gas. At the time he was suggesting we use our abundant coal resources as the feedstock. Now that George Mitchell’s revolution has pumped up gas production to 24 times the level of 2007, the case is even stronger.

Zubrin has just published a 5,700-word article in the current issue of New Atlantis. I won’t do more than summarize it here, but I would recommend tying it up in a bow and giving it to everyone you know as a Valentine’s Day present. Zubrin wraps up all the major arguments for methanol and even manages to illuminate some obscure details about the Environmental Protection Agency’s policy toward methanol that eluded some of us for some time. Here are his major talking points:

  • OPEC still essentially controls the world price of oil. Even though non-OPEC production has increased 60 percent since 1973, 60 percent of the oil traded around the world is exported from OPEC countries and 80 percent commercially viable reserves are still owned by OPEC members. The price of oil is still set in the Persian Gulf.
  • This oligopolistic control has a huge impact on the American economy. Ten of the last 11 postwar recessions were preceded by sharp increases in oil prices. The recent upsurge in shale oil production won’t help much. The Energy Information Administration expects it to level off after 2016. By 2040 we will still be importing 32 percent of our oil.
  • Methanol made from natural gas is the only commodity that can realistically replace oil. “Methanol is not some futuristic dream touted by researchers seeking funding,” writes Zubrin. “Rather, it is an established chemical commodity, with a global annual production capacity of almost 33 billion gallons. It has recently been selling for around $1.50 a gallon.” Methanol’s energy content is only about 60 percent of gasoline, but the bottom line is that “pure methanol can get a car 30 percent farther down the road than a dollar of gasoline.”
  • Methanol has numerous environmental advantages. In fact, when California put 15,000 methanol cars on the road in the 1990s, it was for air pollution purposes, rather than cutting imports or reducing prices to motorists. Methanol burns cleaner, produces virtually no particulate matter or smog components, has none of gasoline’s carcinogenic aromatic compounds and reduces carbon emissions.  On pollution grounds alone, it would be worth making the transformation.

So why don’t we do it?  As Peter Drucker always said, in order to replace a well established technology, an upstart replacement must be 10 times as efficient to clear the institutional barriers. That’s a tall order. But as Zubrin details, there are some specifics that stand out:

  • In terms of sheer market capitalization, the oil industry far surpasses the auto industry. Thus, even though the auto industry might benefit from opening up to new fuels, the oil companies’ interest in maintaining the status quo overwhelms them. Zubrin documents how institutional investors that own large shares of the auto companies are even more heavily invested in oil. Several OPEC sovereign wealth funds also own huge slices of the auto companies. The Qatar Investment Authority owns 17 percent of Volkswagen, which has the highest auto company revenues in the world.  Its vice chairman sits on Volkswagen’s board.
  • The Environmental Protection Agency, through overregulatory zeal, has somehow ended up as one of the major impediments to methanol conversion, even though there would be vast environmental benefits. Although older cars can easily be converted to run on methanol at a cost of less than $200, the EPA no longer permits it. “Since 2002, the only way for a vehicle modification to be deemed lawful is if it receives certification ahead of time from the EPA or the California air-quality board. . . In 2009, the EPA specified massive fines that it may level against any individual or business that modifies a vehicles without advance certification, even if there is clear and compelling proof that no emissions increase had resulted, or even been risked, by such changes. In fact, even the use of unapproved engine parts identical to the certified brands would be considered an emissions violation . . . These fines are set at thousands of dollars for individuals and hundreds of thousands, or even millions, for manufacturers. For example, if a mechanic running his own small business converting cars to flex-fuel in his garage modified just a dozen cars, he would face a crippling fine of more than $105,000.”

In 2011 on National Review Online, Zubrin offered to bet anyone $10,000 he could modify his 2007 Chevy Cobalt (apparently in violation of EPA regulations) to run on 100 percent methanol and get 24 miles per gallon. He did it by replacing the fuel pump seal with a 41-cents replacement made from a synthetic rubber that resists methanol erosion. He also had to adjust the ignition timing for methanol’s higher octane. He would have won the bet but no one took him up.

As a way of moving the ball forward, Zubrin advocates the Open Fuel Standard Act, which has been sitting around in Congress since 2008. The present version would clear up some of the EPA’s restrictions and require at least 30 percent of each carmaker’s new vehicles be flex-fuel by 2016, moving up to 50 percent by 2107. The modification would only add about $200 to the price of the car.

Zubrin is one of those American treasures, an independent thinker operating outside the world of “policymaking” who dares think differently and big. His ideas for colonizing Mars may never get off the drawing boards.  But his proposal for substituting methanol as a domestic alternative to imported oil certainly deserves the greatest attention.

Arctic Leaf

No Sex-Just Smirking; No Lies-Just No Strategic Thinking; No Videotapes- Just Lots Of words And Ideology

/in , /by

According to several well-known writers of blogs and columns, based on a recent study by North Carolina State University, EDV’s (electric cars, hybrids and plug ins) are not all they are cracked up to be. Because they may be powered by a coal or natural gas utilities, they spew pollutants, because hybrids may use gasoline, they emit ghg and other pollutants, because their production processes are “dirty,” they generate more pollutants than gasoline.

Electric cars in China have an overall impact on pollution that could be more harmful to health than gasoline vehicles…  EDVs ghg reduction will not make a big difference because the total number of vehicles in the U.S. only produces about 20 percent of all carbon emissions.”

I have seen higher numbers than stated by the writers concerning carbon emissions by cars and trucks fueled by gasoline. It is not clear whether the North Carolina study compared general supply chains to supply chain specifics. For example, EV engines use a proportionately large share of aluminum. Its mining probably emits more ghg than materials used in non evs. Yet, its use in cars, given its lighter weight, produces less emissions.

More relevant, perhaps, while recently there has been some retreat because of rising natural gas costs compared to coal costs, in the long term future, (perhaps aided by government regulations of carbon emissions,) conversion of coal based power generation to natural gas will  again trend upward and lower the total ghg allocated to EDVs.

The bloggers and columnists as well as the North Carolina scholars seem to believe in the theory that if you build it they will come.  Indeed, the most frequent comments on the models used in the study relate to one model, that is, a 42 percent EDV market share by 2050. It presumes a government cap on emissions.   Apparently, according to this model, any ghg reductions caused by EDVs will soon be filled up by other emitters. According to the study’s author, Joseph DeCarolis, ( interviewed by Will Oremus, a critic of the paper in his article in Future Tense, Jan. 27),   “It’s that there all this other stuff going on in this larger energy system that effects overall emissions.” I would add based on the study, DeCarolis presumes ghg emissions are fungible and equilibrium will result in 2050.

Diminishing the ghg importance of  EDVs ,  more than three decades out,  shifts  issues and initiates arguments over whether or not government should have a tougher cap; whether or not other sectors of the economy will illustrate more or less ghg emissions; whether or not technological advancements focused on ghg reduction across the economy will remain almost static; whether or not businesses will accept ghg reduction as a must or as part of  “conscientious capitalism” both to sustain profits and quality of life.

The continued development and increased sales of edvs are important to the nation’s long term effort to reduce ghg and other pollutants. But, until evs among edvs increase mileage per charge to remove owner fear of stalling out in either remote or congested places like freeways and until the price comes down and size increases for families with children, they will at best constitute a relatively small share of the new market for cars in the  near future. Even if the total numbers of edvs significantly increase their proportion of new car sales, many years will pass before they, will collectively, play a major role in lessening the nation’s carbon footprint.

Perfectibility not perfection should be a legitimate goal for all of us concerned with the environment. Individuals and groups concerned with the economic and social health of the nation should drop their ideological bundling boards. (Some of us are old enough to remember the real origins of the bundling board. Because of a shortage of space in many homes, it was used to separate males and females who often slept together before they were married in revolutionary days. I am not sure it was abandoned because mores changed, houses got bigger or people got splinters. I have no videotapes!)

2014 should witness the development of a non-partisan,non- ideological coalition of environmental, business, non-profit, academic  and government leaders to embrace  the need for an effective transitional alternative fuel strategy for new and existing cars and EDVs.  The embrace should respond to national and local objectives concerning the environment, the economy, and security and consumer well-being.   A good place to start would be to extend the use of natural gas based fuels, including ethanol and methanol.

Simultaneously, the coalition should encourage Detroit to expand production of flex fuel cars and the nation to implement a large scale flex fuel conversion program for existing cars.  Added to the coalition’s agenda should be development of a more open fuels market and support for intense research and development of EDV’s, particularly EVs.  Hopefully, evs will soon be   ready for prime time in the marketplace. Succinctly, we need both alternative fuels and evs.

Arctic Leaf

Oil and Natural Gas Prices and the Future of Alternative Fuels

/in , /by

I love Vivaldi’s Four Seasons, especially the music from the spring. I love the optimistic line from the poem by P.B. Shelley, “if winter comes can spring be far behind.”  The unique cold weather, the Midwest, East Coast and even the South, has been facing this year will soon be over and spring will soon be here. Maybe it will be shorter. Perhaps, as many experts indicate, we will experience a longer summer, because of climate change. But flowers will bloom again; lovers will hold hands without gloves outside, kids will play in the park… and natural gas prices will likely come down to more normal levels than currently reflected.

Last Friday’s natural gas price according to the NY Times was $5.20 per thousand cubic feet. It was “the first time gas had crossed the symbolic $5 threshold in three and half years, although (and this is important) the current price is still roughly a third of the gas price before the 2008 financial crisis and the surge in domestic production since then.”

Why? Most experts lay the blame primarily on the weather and secondarily on low reserves, a slowdown in drilling, and pipeline inadequacies. The major impact so far has been on heating and electricity costs for many American households, particularly low and moderate income households and the shift of some power plants from natural gas back to coal.

I wouldn’t bet more than two McDonald’s sandwiches on where natural gas prices will be in the long term. But I would bet the sandwiches and perhaps a good conversation with a respected, hopefully clairvoyant, natural gas economist-one who has a track record of being reasonably accurate concerning gas prices- that come cherry blossom time in Washington, the price of natural gas will begin to fall relatively slowly and that by early summer, it will hover between 3.75 to 4.25 per thousand cubic feet.

Natural gas prices over the next decade, aided by growing consensus concerning reasonable fracking regulations as reflected in Colorado’s recent regulatory proposals, and EPA’s soon to be announced regulations, should be sufficiently high to reignite modest drilling passions, improvements in infrastructure and increased supplies at costs sufficient to maintain an advantage for natural gas based fuels when compared to oil based fuels at the pump.

The present relatively low price of oil (Bent Crude $107 a barrel; WTI $97.00 a barrel) and its derivative gasoline ($3.30 a gallon) may impact the cost differential between gasoline and natural gas based fuels. But the impact could go both ways. That is, if the price of oil per barrel continues to fall and translate into lower costs for gasoline, the price differences between natural gas based fuels and gasoline would narrow. Conversely, if the price of oil goes lower than $90 a barrel, its present price, it likely will impede future drilling, particularly in high cost, hard to get at environmentally sensitive areas. This fact combine with renewed economic growth in the U.S., Europe and Asia, as well as continued tension in the Middle East and continued speculation could well result in a return to higher gasoline prices.

Clearly, the relationship between the cost of natural gas based fuels (CNG, ethanol and methanol) and gasoline is a critical variable in determining consumer behavior with respect to conversion of existing cars to flex fuel cars and the purchase of new natural gas cars (Based on the national pilot involving 22 states lead by Governor Hickenlooper(D) and Governor Fallin(R), as well as interviews with carmakers, creation of a deep predictable market for CNG fueled vehicles will bring down the price of such cars and give them competitive status with gasoline fueled vehicles).

The odds are that the lower costs of natural gas based fuels will serve as an incentive to buyers and existing owners to use them. That is, assuming problems related to fuel distribution as well as access and misinformation concerning the affect alternative fuels have on engines are resolved by public, non-profit, academic and private sectors. Maybe I will up my bet!

Arctic Leaf

Who Says Cars Have to Fill a Parking Space?

/in , /by

You’ve seen them zipping around city streets or squeezed into some illegal-looking space between a normal car and a fire hydrant.  At first you might have thought they were some kind of joke. Who would drive such a thing?  But the new mini-electrics are catching on and may be on the way to revolutionizing urban driving.

There is now a whole menu of them – the Chevrolet Spark, the MINI E, the Toyota IQ, the Fiat 500. Oddly, many of them are available only in California. That seems like a mismatch because they’re obviously better suited for the densely populated cities of the Northeast than California freeways. But those are the vagaries of state incentives and government mandates.

Most of them have a highly limited range.  125 miles is good and some are as low as 75. (A regular gas-powered vehicle can go 400 miles on a full tank.)  But they’re a niche model, obviously suited for running around town and finding a parking space in the vehicle-choked precincts of places like New York City. They can get up to the equivalent of 125 miles per gallon and with some newer accessories don’t take up to seven hours to recharge. Most important, they are getting down into a price range where they are accessible. Leasing prices are impressive (some of them are only available by lease) and with the incentives that the Golden State is offering, people in California can say they are getting a really good deal.

Here’ a list of some of the contenders:

  • Chevrolet Spark.  Originally produced as the Daewood Matiz by GM’s Korean division, the all-electric Spark went on sale in California and Oregon in 2013.  The car is a 146-inch-long four-door hatchback that sells for $27,000.  With a $7,500 federal tax credit and a $2,500 California rebate, however, it comes in at well below $20,000. The Spark can be leased for $199 a month. With an optional connector, it can be charged up to 80 percent in 20 minutes.
  • Fiat 500e.  An electric version of a car that has been sold in Europe since the 1950s, the 500e went on sale in California last year, selling 645 units. Range is barely 100 miles but it gets the equivalent of 116 mpg. The car is priced at $32,000.  Fiat says it will be available in several more states in 2014.
  • Chrysler’s Smart Fortwo. The Smart Fortwo is a model that looks like you could fold it up in your back pocket or park it in your living room. Manufactured in France, it is barely eight feet long. It sells everywhere in the United States. Previously built for gasoline and diesel, the new all-electric model sells for only $12,000 and leases for $99 a month. You’re starting to see them more and more on the streets of New York City.
  • Toyota Scion IQ. Positioned as a direct competitor to the Fortwo, Toyota’s “city car” sold as a 3-cylinder gasoline engine until the electric version was introduced last year.  Estimated range is only 50 miles with a three-hour recharge, so it’s really limited to city driving. The price is high – $35,000 – and right now it’s only available for fleet purchases and car share programs. The first 30 units were bought by the University of California at Irvine.
  • Mitsubishi i-MIEV EV.  Introduced in Japan in 2008 and soon sold almost everywhere but in the United States, the “i” version was finally brought to these shores in 2011, a slightly larger version with some additional features.  The American version has a range of only 62 miles but was ranked by the EPA as the most fuel-efficient car in America until surpassed by the Honda Fit EV in 2012. It sells for $23,000.
  • Honda Fit EV. Still only available on a lease basis, the Fit EV goes for $259 a month. Introduced only in California and Oregon in 2011, it is now available in New York, New Jersey, Maryland, Massachusetts, Connecticut and Rhode Island as well. The car only has an 80-mile range but is highly fuel efficient.

Getting people to accept the proposition of driving around city streets in something that looks like it could be sold on the floor of FAO Schwarz, of course, is an entirely different matter. In test driving a city car for The New York Times, Jim Motavalli reports a neighbor commenting, “It’s adorable, but I’m afraid it would be crushed by a Suburban.” The idea of weaving in and out of traffic in what amounts to a tin can is certainly not for everyone. But electric vehicles have lots of torque at the lower end of the spectrum and can be easily maneuvered. Plus if nothing else, they are loaded with safety features.

To anyone familiar with the dense urban streets of Athens or Buenos Aires, city cars would be a familiar sight. And of course the more there are of them, the less dangerous driving becomes. The progress of mini-cars is slow but you’re seeing more and more of them. In the end, they may revolutionize urban driving.

Arctic Leaf

Are Hydrogen Cars the Future – Again?

/in , /by

The hydrogen car may be on the road to another comeback – again.  At the annual auto show in Los Angeles last week, both Honda and Hyundai unveiled “concept cars” of hydrogen models they expect to be available by 2015.  As a result, the automobile press has been filled with stories its revived prospects.

“For a long time, hydrogen fuel-cell vehicles were seen as a tantalizing technology to help reduce society’s reliance on oil,” Brad Plumer wrote in the Washington Post. “But the vehicles themselves were seen as forbiddingly expensive. Not the pendulum may be swinging back.”

“Toyota made a decagon – the fuel-cell car is going to be a big part of our future,” wrote Bradley Berman in The New York Times, quoting Toyota spokesman John Hanson.  “Today Toyota is not alone,” he continued. “Four other carmakers – General Motors, Hyundai, Honda and Mercedes-Benz – are also promising fuel-cell cars in the next few years.”

The prospect of an automobile running on hydrogen is indeed perpetually attractive.  Hydrogen is the most common element in the universe.  When combined with free oxygen in the atmosphere it “combusts” to produce H2O – water.  There are no other “exhausts”. Thus hydrogen promises transportation absolutely clean of any air pollution.  No global warming, either.

But it isn’t quite that simple.  The question that always presents itself is, “Where do you get the hydrogen?” Although hydrogen may be the most common element on earth, all of it is tied up in chemical compounds, mostly methane and water.  Accessing this hydrogen means freeing it up, which requires energy.

Most of our commercial hydrogen is made by “reforming” natural gas, which splits the carbon and hydrogen in methane to produce carbon dioxide and free hydrogen. That doesn’t help much with global warming.  Another method is to split water through electrolysis. That is a much cleaner process but requires a considerable amount of electricity. Depending on what power source is used, this can produce zero or ample emissions. If it’s coal, the problem is made much worse. If it’s clean sources such as solar or nuclear, then there can be a strong advantage. In the 1930s, John Haldane proposed giant wind and solar farms that would generate hydrogen that could fuel all of society. Such facilities generating hydrogen for transportation would be a step toward such a utopia.

Even then, however, there are problems.  Hydrogen is the smallest molecule and leaks out of everything.  It is very difficult to transport.  Joseph Romm, a disciple of alternative energy guru Amory Lovins, was appointed head of hydrogen car development program under President Bill Clinton and worked for two years on its development.  In the end, he became very disillusioned and wrote a book entitled The Hype About Hydrogen, in which he argued that the idea really wasn’t practical. Romm is now one of the country’s premier global warming alarmists on ClimateProgress.org.

What has apparently brought hyfrohgen cars back to the forefront has been the substitution for platinum as the principal catalyst in the fuel cell process.

A fuel cell produces an electric current by stripping the electron off a hydrogen atom and running it around a barrier that is otherwise permeable to a naked proton.  The proton and electron are reunited on the other side of the barrier, where they combine with free oxygen to form water.  Until recently, platinum was the only substance that could fill this barrier function. This made fuel cells very expensive and raised the question of whether there was enough platinum in the world to manufacture fuel cells in mass production.  But several platinum substitutes have now been found, making fuel cells considerably cheaper and more accessible.

Estimates are now that next year’s Hyundai and Honda FCVs will sell for about $34,000, which puts them in the range of electric vehicles such as the Nissan Leaf and the Toyota Prius.  (The Tesla, a luxury car, is  priced in a much higher range,)  The problem then becomes fueling.  The FCV offers considerable advantages over the EV in that it has a range of 300 miles, comparing favorable to gasoline vehicles.  It can also be refilled in a matter of minutes, like gasoline cars, whereas recharging  an EVs can take anywhere from  20 minutes to three hours. But hydrogen refueling stations have not materialized, despite former governor Arnold Schwarzenegger’s promise of a “hydrogen highway.” At last count there were 1,350 EV recharging stations around the country but only ten hydrogen stations, eight of them In Southern California.

All this suggests that neither hydrogen cars or electric vehicles will be sweeping the country any time soon.  Neither the Chevy Volt nor the Nissan Leaf have sold well and are not expected to do much better next year.  If you read the press stories carefully, you soon realize that the reason the automakers are constantly cycling back and forth between electric and hydrogen cars is that they are trying to meet California’s requirements for low-emissions vehicles that will allow them to continue selling in the state. The problem, as always, is consumer resistance..  The automakers can manufacture all the hydrogen and electric cars they want but consumers are not always going to buy them, especially at their elevated price.  So the manufacturers will end up dumping them on car rental agencies where they will sit on the back lots, as did the first generation of EVs.

There is, however, one type of alternative that succeeded handsomely in California and had widespread consumer acceptance, although it is completely forgotten today.  That is methanol.  In 2003, California had 15,000 cars running on blends of up to 85 percent methanol.  Consumers were extremely happy and did not have to be dragooned into buying them.  Refueling was easy since liquid methanol slots right into our current gas stations. Cars that run on methanol can be manufactured for the same price as cars that run on gasoline.

The experiment only ended because natural gas, the main feedstock for methanol, had become too expensive.  In 2003, natural gas was selling as high as $11 per mBTU, making it more expensive than gasoline.  That was before the fracking revolution.  Today natural gas sells for less than $4 per mBTU and the industry is coping with a glut.  Methanol, which is already produced in industrial quantities, could sell for $1 less than motorists are now paying for energy equivalent in gasoline.  Moreover, methanol can be made from garbage and crop wastes and a variety of other sources that would reduce it’s carbon footprint.

Hydrogen and electric cars each have a future and it is good to see the auto companies keep experimenting with them.  But each has impediments that are going to be difficult to overcome. Methanol, on the other hand, is a technology that could be implemented today at a price that not require subsidies.  Even if it is only perceived as a “bridge” to some more favorable, low-carbon future, it is worth pursuing now.

 

Arctic Leaf

A Thanksgiving Feast of Alternatives

/in , /by

“Over the river and through the wood

To grandmother’s house we go.

The horse knows the way to carry the sleigh\

Through white and drifted snow.”

Thanksgiving has come and gone, Christmas is coming, and that makes me think of alternative fuels and finding something to replace gasoline in our engines.

What, after all, was the horse and sleight except an old-fashioned means of transportation?  It had served humanity since the Bronze Age.  It has often been said that Julius Caesar and George Washington used essentially the  same transportation technology in pursuing their wars

All this held through the early days of the 20th century. There is a famous scene Jules Verne’s The Mysterious Island, written in 1875, where the adventurers go to investigate a mysterious submarine – in a horse and carriage!  When people started assembling on the New York docks in 1913 to hear reports of the missing Titanic, half of them arrived in horses and carriages.

We eventually made the energy transformation to the “horseless carriage” of automobiles but it wasn’t easy. People were afraid of the new invention.  They didn’t know how to work it. They fretted over the extraordinary speeds that could be reached – 30 miles an hour!  They did not like the nasty exhausts that some new technologies produced.

Nor was it ever certain which means of propulsion for the new “automobiles” would prevail. There were three contenders – the electric car, the steam car and the internal combustion engine running on any number of fuels.  Gasoline was not the foremost possibility. When Henry Ford built his first model in 1895, called the “quadricycle,” he designed it to run on corn ethanol, which seemed like a reasonable alternative.

The steam car set speed records of 200 miles per hour and the electric showed great promise as a gadabout town car. But the internal combustion eventually prevailed. Why?  The steam car, running on coal, took too long to warm up – about 20 minutes.  The electric car had a very short range, as it still does today. The internal combustion engine was awkward because it required the driver to hand-crank the engine from the front.  There was also a question of whether there would be enough fuel available to run large numbers of cars.  At the time, oil was still a relatively rare commodity, marketed mainly for the “lamps of China.”  But when Spindletop gushed forth in 1901, questions about the oil supply faded.  And when Charles Kettering invented the electric starter in 1912, the battle was over.

Still, Henry Ford didn’t particularly like gasoline and never gave up on the idea that ethanol was a better alternative.  Gasoline had a lower octane rating, was much more toxic (particularly when blended with tetra-ethyl lead to raise its octane rating) and emitted more pollutants. It was also more explosive and required complex refining, whereas ethanol was relatively easy to produce. Ford had roots in farm country and as late as 1925, with the farm belt in a chronic recession, he argued that farmers should be growing their own fuel. “The fuel of the future is going to come from fruit like that sumac out by the road, or from apples, weeds, sawdust — almost anything,” he told The New York Times. “There is fuel in every bit of vegetable matter that can be fermented. There’s enough alcohol in one year’s yield of an acre of potatoes to drive the machinery necessary to cultivate the fields for a hundred years.”

These ideas still resonate today.  Making auto fuel from crops has become a reality since we add 10 percent corn ethanol to our gasoline supplies, cutting our dependence on foreign oil.  There is still talk about using the much larger portions of “crop wastes” to produce cellulosic ethanol, although the technology to do this economically has not emerged yet.  Electric cars are getting another run as battery life and range are extended.  And there is a range of other alternatives – compressed natural gas (CNG), liquefied natural gas (LNG), hydrogen fuel cells and methanol derived from natural gas, coal or any number of organic sources, including garbage, crops and crop wastes.  We have a regular Thanksgiving feast of options before us.  It’s just a question of finding out what works best.

So remember, no technology is forever.  The holiday revelers sleighing toward grandmother’s house for Thanksgiving never dreamed they might one day be making the same trip across 300 miles of countryside at speeds of 60 miles an hour. And today when you’re speeding down the Interstate in a car powered by gasoline from Saudi Arabia, you may not dream that in ten years you could be driving a car running on switchgrass grown on the scrubland of South Dakota or natural gas pumped from the Marcellus in Pennsylvania.  Yet stranger things have happened.  You never know where that path over the river and through the woods is going to lead.

Arctic Leaf

Ford Leads the Way

/in , /by

The Ford Motor Company stepped front-and-center in the effort to fine alternatives to high-priced imported oil last week with the announcement that it will offer compressed natural gas (CNG) tank as an option in the F-150 pickup truck, its most popular brand that currently sells 700,000 models a year.

Now it won’t come cheap. There’s a $250-$350 charge for the vehicle to come “prepped” from the factory. That means putting hardened valves, valve seats, piston and rings into the V6 engine. But after that, there’s a $7-9000 charge for installing the CNG tank in the cargo bay – made considerably more expensive than in Europe because safety standards are interpreted in a way that makes them much more expensive. This lifts the showroom price from $24,000 to around $32,000. That’s a big chunk but Ford swears you’ll make it back in three years by substituting fuels.

With the price of gas at around $3.80 per gallon and the oil-equivalent of natural gas at around $1.20, those savings should add up fast.  Of course all this assumes that the price differential won’t narrow to its traditional level, but that doesn’t seem very likely now. Electrical plants have shown a tendency to move quickly back to cheaper coal if the price of gas rises, but the difference between the crack spread and the spark spread seems to have separated permanently, much to natural gas’s advantage.

All this is good news for those looking to substitute some of our abundant natural gas for foreign oil in our transport sector.  In fact, there’s a lot of progress being made right now:

Clean Energy Fuels of Newport Beach, CA already has a network of 360 natural gas fueling stations at truck stops along Interstate highways and is trying to build a complete national infrastructure.  NGV stations cost $750,000 a pop but Clean Energy is looking at the long term.  The ready availability of filling stations will help spur the conversion of giant 18-wheel diesel haulers, which most people see as the ripest target for conversion.

Heavy-duty fleet vehicles are making rapid progress.  Buses and garbage trucks are in the forefront. Eight out of ten new vehicles bought in 2012 by Waste Management, the leader in the field, were powered by natural gas.

There are now 120,000 gas vehicles on the road in the United States, according to Natural Gas Vehicles of America, the trade group.  Unfortunately, this constitutes only a tiny fraction of the 15.2 million NGVs worldwide. Iran, Pakistan and Argentina, improbably, are the leaders. We’re behind in making the transition, but there’s plenty of room to catch up.

In a report issued in June, Citi Research estimated that one-quarter of the world’s present consumption of oil could be replaced by natural gas under present conditions. More than 9 million barrels per day could be replaced in truck transport, 2 million of these in the US. Another 3 million b/d could be opted out in marine transport and 200,000 b/d in railroad locomotives.

All this would be fairly easy to transact since it involves large commercial organizations with centralized decision-making.  Sooner or later, however, this approach is likely to run up against limits.  The stumbling block will be the vastly more decentralized system of private automobiles, which still consumes 60 percent of our oil and involves a car in every garage and a gas station on every other corner. Here the problem of building an infrastructure and achieving widespread distribution is much more difficult.

The problem comes because reformers are viewing natural gas as a fuel instead of a feedstock. Compressed natural gas (CNG) and liquefied natural gas (LNG) are the most readily available options – and both are legal – but in the end they are going to have their limits. It will make much more sense to use methane as a feedstock for the manufacture of liquids, methanol in particular.  These will be much easier to transport and will substitute for gasoline in current car engines with only minimum adjustment – nothing like the $8000 required for the F-150. Valero has just opted to build a $700 million methanol manufacturing plant in St. Charles, Louisiana in anticipation of this demand. All depends on whether the Environmental Protection Agency decides to give a go-ahead to use methanol in car engines. The matter is pending.

So the effort to use our abundant natural gas resources to reduce our dependence on expensive, unpredictable and unreliable foreign sources of oil is making headway. Ford’s decision to equip the F-150 with CNG is a beginning. But there’s more to come.

Arctic Leaf

Natural Gas Demand Causes the EU to Invite Russia to Join…

/in , /by

Hold the presses, stop the cable and network news shows, break away from Twitter, and forget for a moment about Facebook… Why? Read the latest wire from The Associated Press! Many European nations, including Great Britain, have signed a multibillion dollar long term contract for Russian natural gas. The signing was accompanied by a decision by the European Community to integrate Russia into the community’s governance– NATO officials expressed anger and disappointment. Great Britain’s ambassador to America gently, but affirmatively, responded to the New York Time’s question concerning “what does this do to America and Great Britain’s special relationship? Well, it isn’t so special anymore.” She went on, “the world is evolving and Europe, as well as Great Britain, is evolving also. . . The alliance, and indeed NATO, is a relic of the past. I am sorry but that’s just how it is!”

Please don’t respond like many in America did to the late 1930s broadcast of H.G. Well’s War of the Worlds, narrated by Orson Wells. Don’t fear! don’t run out to the street! No deal with Russia for natural gas has yet been signed, NATO is still intact. The European Commission and European Union are still alive, if not well, given the economic problems plaguing many of its members and the continent as well as Great Britain.

While not factual, my flight into hyperbole and negative fantasy could become a reality sometime in the future. What got me thinking about the possibilities was an interesting article in the Oct. 31 Financial Times (coincidentally, on Halloween) by Paolo Scaroni, Chief Executive of Eni, Europe’s largest natural gas dealer.

Scaroni’s thoughts were not offered to trick or treat us. They were meant to make us think seriously about opportunity costing and risk analysis sure to be undertaken by European countries because of their increased need for natural gas and other energy sources.

Scaroni suggests that Europe’s present energy policies and related energy costs impede economic growth, and do not reduce Greenhouse Gas (GHG) emissions. Of note, he indicates that “the problem is that we have so far failed to grasp the implications of the U.S. shale revolution for Europe. Thanks to the rapid increase in efficient non-conventional gas production, U.S. companies pay about $3.50 per million British Thermal Units (BTUs) for their natural gas…That is about a third of what Europeans pay. “

Apart from high gas feedstock costs, Europeans also pay a hefty set of charges to sustain incentives to invest in renewables. As a result, Europe’s electricity is “twice as expensive as America’s” and gives the U.S. a clear competitive advantage with investors around the world, including investors from Europe. Why invest, build or expand in Europe if your company is energy intensive?  The U.S. has the Red Sox, Lady Gaga, Madonna and, most importantly, relatively cheap natural gas fuel.

Because natural gas in the U.S. now crowds out coal, Europe gets a lot of its surplus coal for power plants. So while natural gas use has declined, it is increasingly hostage to dirty U.S. coal- sort of a negative equilibrium for our friends on the other side of the Atlantic. Rising carbon emissions from coal have come close to netting out the carbon benefits from investment in renewables, natural gas and the economic downturn.

What are Europe’s generally intelligent public and private sector leaders to do?  Sounds obvious!  Increase imports of shale gas from the U.S.!  No, says Scaroni. By the time transport costs are added and subject to liquefaction in the U.S. for shipping and regasification for use in Europe, shale gas exported from the U.S. is twice as expensive as gas in the U.S. While likely a bit exaggerated, the author indicates that buying U.S. natural gas would be economically disastrous.

It is also not a good political move. Besides the costs for U.S. natural gas, many Europeans still view the U.S. as “that” upstart nation, once defined by old Europe as the “colonies.” Heck, it was only near 325 years ago; it’s too early to pay reparations.

Scaroni thinks the answer is to explore home grown shale oil assets and nuclear energy, as well as increasing the efficiency of conventional fuels. To secure the first two, however, will be tough given the opposition of environmentalists and people who would like to keep Europe just as it is. Further, high density wall to wall development throughout Europe and Great Britain creates even more fear concerning despoiling the remaining open space and breeds an intense “not in my neighborhood” attitude in many areas. Efficiency is praised by most, because it is often used devoid of real meaning in political rhetoric. Who can be against it, until specifics and likely mandates, costs, and its impact are put on the table?

Scaroni, realizing the obstacles to lowering the costs of gas to U.S. benchmark prices, suggests strengthening commercial and political ties with Russia and perhaps other traditional non U.S. energy partners.  Reading between the lines of the author’s words, he seems to be saying, “let’s milk Russia for all the comparably inexpensive gas we can get.”  WOW!  Communist! Reprobate!  Misanthrope!  No.  Probably just a good analyst and business person.

Without access to NSA data or James Bond, I still almost can hear the buzz at the Pentagon and State Department.  I can see the dour faces at NATO offices in Brussels. I can visualize the depression in the EC and EU. Sure, Russia may soon find a welcome mat in Europe. Its entrance price will be relatively cheap natural gas. New alliances, new travel patterns for diplomats, better food in Russia in the future, new political fun and games as well as new problems for the U.S.

Russia’s natural gas exports to Europe are likely to increase, but Russia’s natural gas dominance is probably not around the corner. The West can take a deep breath.  Use of fracking, governed by strong environmental regulations, likely will increase and result in expanded natural gas supplies in Europe and Great Britain.  While exports from Russia will increase, they will reflect a measured increase at least in the short term.

Russian exports to Europe and Great Britain will not have a major impact on the U.S. We can manage any uncertain political changes and the European price of natural gas will not have a major effect on the U.S. price of the same.

What’s the U.S. going to do with its natural gas? While LNG exports from the U.S. may increase to Great Britain and Europe (as well as Asia), the increase will be moderate, given the continued absence of sufficient port capacity, the cost and the slow pace of government approvals. Pressure, in light of predicted surpluses and the advocacy of alternative fuel supporters, may help open up the almost monopolistic U.S. vehicular fuel markets and increase natural gas demand.

Natural gas prices in the U.S. will remain subject by and large to U.S. production and related costs, as well as regional market behavior and investor speculation. Contrary to oil, natural gas produced in the U.S. likely will not play a major role for at least the next several years in global markets

Is this good for U.S. and U.S. consumers?  On balance, yes. The gap between demand and production as well as production potential will remain visible. ROI in natural gas wells and rigs will probably be sufficient to secure modest production increases. Natural gas prices will likely go up over time but remain well under the price of oil when both are converted to vehicular fuels. Assuming positive government rule-making and the increased use of natural gas derivatives, ethanol and methanol as alternative transitional vehicular fuels, consumers at the pump will benefit from the continued differential and the U.S. will benefit security-wise as well as environmentally and economically.

Arctic Leaf

Can the Marcellus give birth to CNG vehicles?

/in , /by

What if America had so much natural gas it didn’t know what to do with it?

Right now that’s the situation in the Marcellus Shale, the vast formation that underlies nearly all of Pennsylvania. There just isn’t enough demand for what’s available. And the same situation could be facing the entire United States in just a few years, according to speakers at the 2013 Natural Gas Utilization Conference held at the Omni William Penn Hotel in downtown Pittsburgh last week.

“Today there are 800 shut in wells in the Marcellus, waiting for an increase in price and improvements in infrastructure,” said Justin Carlson, manager of energy analytics at Bentek Energy of Colorado told the gathering. “By 2017, demand could dip below supply for the entire United States. We’re not doing enough to support growth. The market needs more users.”

Where could you find those new consumers? Virtually everyone agrees that there’s one market that is begging for greater natural gas use – the transportation sector.

Some companies are already looking for ways to do it. Last year Consol Energy Inc. and Praxair, Inc., a Connecticut-based manufacturer of industrial gases, was preparing to build a $2 billion plant to convert gas from the Marcellus into gasoline and diesel blends for use in cars and trucks. In the end, however, the economics didn’t quite work. “The project would have generated a positive rate of return but not the 12% that investors are looking for,” said Dante Bonaquist, chief scientist and corporation fellow at Praxair, who spoke at the conference. “We had to give it up.”

So absent a liquids option, most gas producers are opting for another technology – compressed natural gas. Leading the pack has been Chesapeake Energy, which set a goal to convert its entire fleet of vehicles to CNG by 2015. At the current pace it will hit the 80% mark in 2014. Last year Chesapeake’s Peake Fuel Solutions affiliate also partnered with GE to launch “CNG In A Box,” a package that compresses natural gas from a pipeline into CNG fueling stations so that small and large retailers can become vendors of natural gas. The package was introduced at the National Association of Convenience Stores 2012 annual convention.

“The 8-by-10-foot container is easy to ship and its modular design allows for plug-and-play,” said Bob Jarvis, spokesman for Chesapeake. “It makes pay-at-the-pump a familiar and secure experience.” GE already has a manufacturing plant up and running in Houston. On Sept. 17 it announced a memorandum of understanding with China’s Endurance Industries to deliver 260 CNGs In A Box to fuel China’s rapidly growing conversion to natural gas vehicles.

Last week, however, Chesapeake was forced to disband its seven-member Natural Gas Vehicle Task Force as part of an austerity-driven reorganization. But other companies may pick up the slack. “Chesapeake has been an important player in growing the natural gas vehicle market, but other companies and organizations have taken on that role now,” said Rich Kolodziej, president of advocacy group Natural Gas Vehicles for America.

Range Resources, another major player in the Marcellus, is also making an all-out effort to promote CNG vehicles. It recently closed a deal with GM to buy an entire fleet of trucks for its Pennsylvania operations. The company expects to save 40-50% of vehicle operating costs by switching from gasoline. With 180 trucks in the region, each carrying a 17-gallon tank, Range will save $3,000 each time its fleet refuels.

But is compressed natural gas the best way to go? The technology involves high-pressure tanks, both in storage and in your car or truck and involves a whole new infrastructure. Converting natural gas into methanol – a fairly simple process – would allow us to use the current infrastructure with only a few minor adjustments. Existing vehicles can be modified to use methanol for only a few hundred dollars and flex-fuel vehicles could use either methanol or traditional gasoline.

Methanol works better from the supply side as well. “The economics of methanol would have been more attractive,” said Bonaquist, of the Praxair-Consol Energy proposal that didn’t make it off the drawing boards. “The conversion and purification sections of the plant would have been less complex. It would have been particularly advantageous for smaller scale production.”

So what’s the problem? Well, unfortunately, putting methanol in your car hasn’t yet been approved by the Environmental Protection Agency. That makes it illegal. If the regulations could be changed, methanol would become a much easier route for moving the nation’s looming gas surpluses into the transportation sector. There could hardly be a more promising way of freeing ourselves from dependence on foreign oil.