Supporters of natural gas vehicles gather in Denver, USA
The Denver’s petroleum production boom has both help and hurt the decades-long push to fuel more vehicles in the United States with natural gas.
Hydraulic fracturing has opened up massive reserves of natural gas, reassuring those who switch to the alternative fuel source that prices will remain low and stable for years to come.
But the technology has also boosted oil production, pushing down gasoline and diesel prices globally and cutting into the strength of economic arguments that support natural gas.
“Natural gas is the only fuel that is clean, reliable and affordable. We have a good product. It performs,” said Marty Durbin, president and CEO of America’s Natural Gas Alliance, to an audience in Denver gathered for the North American Natural Gas Vehicle Conference & Expo.
More than 800 people attended the conference Tuesday and Wednesday at the Colorado Convention Center, where suppliers put some of the latest in gas-vehicle technology on display.
Natural gas has made the strongest in-roads with “return-to-base” operators like shuttle buses, trash trucks and local package delivery.
About 40 major airports use the fuel for ground transportation, as do about 30 percent of transit buses and 60 percent of new refuse trucks, said Andrew Littlefair, president and CEO of California-based Clean Energy, which is expanding the nationwide network of natural gas fueling stations.
Those local fleets represent a market of 2 billion gallons a year, while converting long-haul trucks could displace 30 billion gallons of diesel or gasoline. But a lack of natural gas fueling stations and the efficiency of diesel engines has made that market a tough one to convert.
Charles Rimer, who’s in charge of onshore U.S. operations for Texas-based Noble Energy, detailed how the company is working hard to get its costs in line with lower commodity prices and ensure supply.
Noble Energy is putting down 24 to 32 wells per section rather than the six to 10 it used to drill. Wells are now drilled in five or six days versus the 10 to 15 days it used to take.
Lateral bores are also going out farther — up to 9,000 feet, or double the old standard. All of that has contributed to a 32 percent increase in shale gas from completed wells, Rimer said.
“There is plenty of gas out there, plenty of supply,” he told the audience.
Once the rising star of alternative fuels, natural gas has struggled to win favor within the Obama administration, and some in government are convinced that batteries or fuel cells will leapfrog it, Littlefair said.
But Mike Whitlatch, vice president of global energy and procurement at UPS, detailed how the delivery giant has displaced tens of millions of gallons of traditional fuel with natural gas and will keep doing so.
UPS is also looking ahead to the next wave — renewable natural gas sources that carry some of the lowest carbon impacts of any transportation fuel available, Whitlatch said.
NGVAmerica, which hosted the conference, recognized Gov. John Hickenlooper and Democratic Sen. Michael Bennet as two of its public policy champions.
“Colorado is a strong state for natural gas,” Hickenlooper told the audience.
Colorado has added 233 natural gas-fueled vehicles to its state fleets the past two years and is working to build out a network of fueling stations.
Early reviews are showing the transition will more than pay for itself, but persuading some agencies, like the Colorado State Patrol, to make the switch has been hard, Hickenlooper said.
Converted to a gasoline equivalent, compressed natural gas is expected to average $2.06 a gallon over the next five years versus $3.36 for gasoline, Hickenlooper said, adding that emissions can be up to 90 percent lower.
Hickenlooper and Oklahoma Gov. Mary Fallin launched a memorandum of understanding to encourage automakers to focus on creating more engines and vehicles using the fuel source. Twenty-three states total have signed on or indicated support.