The Answer To Oil's Dilemma? Natural Gas
Robert Kientz | Aug 08, 2012 11:49AM ET
Natural gas is making a big comeback. I don't mean the price, but its use as a vital fuel in the economy. Natural gas is right now the only fuel we have that can be used as a substitute for oil in transportation energy. Hydrogen is but a dream and electric cars are failing because they lack the features people are used to in gas engines. Those options are still on the table, but they're in the future, not the here and now. Natural gas will be the complementary transportation energy to oil for now and in the near future until a we find a better technology that doesn't require enormous trade-offs to implement.
Natural gas in the U.S. is so cheap it has become a substitute for coal in grid power. And coal is still really cheap. The advances in fracking gas have increased supplies and production rates to the point that it is the cheapest and cleanest of the fossil fuels, which comes at a good time. As I wrote in done it for about $1000 themselves for a two-gallon unit allowing 50 miles per fill-up. For about $1600, a person can convert to a 5.5 gallon system that would more than take care of daily driving needs for the vast majority of people. Installed professionally, $2500 would be the most anyone would pay to convert their car to a gasoline/natural-gas hybrid.
It has also been reported that prices are much cheaper in third world countries, which have higher rates of natural gas cars already on the road, meaning costs fall pretty quickly as more units are installed.
Savings Time frame
The average savings of natural gas per GGE, based on gasoline and natural-gas pump rates, is currently sitting at around $1.00 ,or so, per gallon. Depending on the system and options used to install the conversion, the payoff could be between two-to-four years on a car getting 25mpg at 15,000 miles per year. I could think of worse investments.
The world has over 1 billion cars, according to the Huffington Post. Assuming all cars have to be converted using a $1500 system, that is a price tag of about $1.5 trillion for the entire world's fleet.
New CNG cars cost anywhere from $3500 to $5000 more than their gas counterparts, but given economies of scale, that number should come done substantially given a large move to CNG vehicles.
Then we have the infrastructure. Natural-gas pipelines are not cheap. But, 64% of the world's pipelines are already pumping natural gas compared to 17% for oil. The U.S. has an extensive pipeline network.
Natural-gas pipeline construction costs are about $60k per inch mile, according to the Intrastate Natural Gas Association of America (INGAA).
At current rates, between 1000 and 1,500 miles of new pipe are expected to be built between the U.S. and Canada through 2030, given current rates. At least $160 billion in pipeline expenditures are expected annually until 2030 including those needed in the arctic.
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If the nation converts it's fleet of cars and trucks, that will increase significantly. Pipelines are by far the safest way to transport natural gas, though trucking it regionally shouldn't be ruled out.
The INGAA estimates current pipeline costs in three scenarios.
It's impossible to tell what the total pipeline expenditures would be for a conversion process of the world's fleet of cars to natural gas from oil, but it would conservatively be in the hundreds of billions of dollars.
If we estimate a $2 trillion total, all-in cost of oil to NG conversion, we are probably in the right ballpark. If we compare that to the $1.2 trillion the U.S. alone has spent on war in the Middle East, then about 60% of that world conversion cost could have been paid for already. We could have been well on our way.
The numbers are big, but so are the payoffs. Natural gas is cleaner and very abundant. We have enough oil to see us through a transition to natural gas. Inotherwords, we have enough of both fuels to use for transportation for the foreseeable future. That is not a bad situation and it is certainly not as apocalyptic as many analysts make it seem.
If our anticipated grid solutions in thorium nuclear work out, we will have plenty of safer and cheaper energy options for us and a few succeeding generations to come.
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