20 May 2010
Natural gas vehicles may have a brighter future in North America than they did in the 1990s due to increases in natural gas production, concluded several speakers at this year’s TTFF meeting. The Transportation Technologies and Fuels Forum (TTFF), descendant of the Windsor Workshop, is a Canadian-US government platform that brings together people from industry, government and academia to address issues surrounding transportation technologies. This year’s meeting was hosted by Natural Resources Canada in Ottawa, Ontario on May 10 and 11. The forum program covered policies, programs, and technical implementation issues related to fuels combustion, production, storage and infrastructure.
When North American (US and Canada) natural gas production last peaked in 2001, the market was supply limited and prices spiked. This lead to a number of LNG import projects and increased activity to bring production of unconventional gas (shale gas, coal bed methane and tight gas) online. The natural gas production continued to decline for several years, until a significant increase in the production of unconventional gas production in the US reversed the total North American production decline and production started to rise again after 2005. Total production has continued to decline in Canada.
While conventional gas production has continued to decline, the rise in North American production is almost entirely attributable to increased extraction of unconventional gas, mainly shale gas, in the US. Shale gas accounted for about 80% of the increase in US dry gas production from 2007 to 2008 with coal bed methane accounting for the other 20% and combined shale gas and coal bad methane production increased from 15% to 20% of total US production. Unconventional natural gas is only just starting to come online in Canada. British Colombia’s Monteny and Horn River projects are likely to stop the decline in total Canadian gas production in 5-10 years.
Shale gas discoveries have also lead to an increase in proved gas reserves in the US—offsetting declines in conventional plus tight gas and coal bed methane proved reserves from 2007 to 2008. By the end of 2008, shale gas made up 13% of US proved gas reserves. It may also comprise as much as 33% of potential US gas reserves. Shale gas has become feasible with the development of horizontal drilling with hydraulic fracturing. Concerns over possible ground water contamination present some risk for future production growth.
This improved natural gas supply outlook for North America has breathed new life into the prospects for the growth of natural gas vehicle (NGV) penetration into the North American fleet. While NGV growth in North America floundered in the 1990s, this is not the case in other parts of the world—particularly in the Asia-Pacific region and in Latin America. Promoters of NGVs in North America claim benefits such as:
- A reduced US dependence on imported oil by converting large numbers of heavy-duty trucks to natural gas. This forms a key element of The Pickens Plan being promoted by billionaire T. Boone Pickens.
- Lower vehicle CO2 emissions.
- Lower fuel costs.
Natural gas engine manufacturers that could benefit from increased North American natural engine sales—especially for medium and heavy-duty applications include Westport Innovations Inc and Cummins Westport Inc. Westport Innovations offers a 15 liter heavy-duty liquid natural gas (LNG) engine (GX 15L) that is currently available as an OEM option in Kenworth T800 LNG and Peterbilt 386, 387 and 367 trucks. Cummins Westport, a joint venture between Cummins and Westport, offers an 8.9 liter engine (ISL G) in North America for medium duty applications. Other natural gas engine manufacturers include: Doosan Infracore America that offers an 11.1 liter natural gas engine as a repower option for transit, refuse and other HD applications, Emissions Solutions Inc. that offers a 7.6 liter natural gas engine as a replacement for International DT-466 diesels, Baytech Corp. that offers GM 6.0 and 8.1 liter engines in new medium and heavy-duty GM vehicles and BAF which offers Ford 5.4 and 6.8 liter engines in new Ford trucks and vans.
Light- and medium-duty vehicle OEMs are also responding to the increased demand for NGVs. On May 18, GM announced it will offer Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) powered versions of the Chevrolet Express and GMC Savana full-size vans to fleet and commercial customers beginning later this year.