Jeff Wilson
About this author: By this author:
If you’ve been paying attention, you will notice a major change in the Pickens Plan.
The original plan was this: Use wind energy to replace the use of natural gas in generating electricity, and take the saved natural gas and use it in compressed natural gas cars, like the Honda GX (NYSE: HMC), to replace gasoline. This shift would greatly reduce the amount of oil that we need to import. T. Boone Pickens said that this would get us started toward energy independence while we are waiting for the development of other technologies like plug-in electric cars, which he described as ‘not quite there yet’.
Mr. Pickens’ has clearly changed his mind about the near-term viability of electric cars. Now he is promoting the use of compressed natural gas (CNG) in big rig trucks. The rationale is that battery technology has enough energy for practical use in small vehicles, but not enough for big rigs.
The viability of the electric car is confirmed by the recent announcement that the MidAmerican Energy Holdings subsidiary of Berkshire Hathaway (NYSE: BRK.A and BRK.B) is spending $230 million for a 10% stake in the Chinese battery outfit BYD Company (HKSE: 1211:HK) which will soon be mass producing a range of electric cars and electric car batteries. A quarter-billion dollar bet by Warren Buffet is a serious indication of a technology’s viability…..
Mr. Pickens is good buddies with Aubrey McClendon, CEO of Chesapeake Energy Corp (NYSE: CHK), the largest producer of natural gas in the United States. Pickens also is a director and the largest shareholder in Clean Energy Fuels Corp (NASD: CLNE), the company that has developed CNG fuelling stations.
What we’re not being told is this: a cubic foot of compressed natural gas has about 1/4 of the energy of a cubic foot of diesel fuel. So, for the same size tank, CNG will only take a truck 1/4 as far as diesel fuel. But CNG tanks are space hogs because, unlike the diesel tank that can be any shape to fit in any space, a high-pressure tank must be some combination of spherical and cylindrical.
The technology that will make the Pickens Plan work (and be a big part of our future in general) is hydrocarbon synthesis. The research group that is out ahead on this is the Loker Hydrocarbon Research Institute at USC Davis. Late last year they partnered with UOP LLC, a Honeywell company (NYSE: HON) to develop clean burning alternative liquid fuels.
First on the agenda is to make methanol and dimethyl ether from natural gas. Methanol can be used in any flex fuel vehicle. Dimethyl ether, on the other hand, is very interesting because it runs exceptionally well in diesel engines. It is like propane in that is a liquid when held in a relatively low pressure tank (about 75psi).
Disclosure: No positions held
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This article has 28 comments:
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john s. gordon
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695 Comments
Nov 17 08:33 AMelectric cars - full circle from 1910's commercial products, using edison type nickel-iron-KOH batteries.
> jack
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NumbersGuy
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10 Comments
Nov 17 08:55 AM-
long_on_oil
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102 Comments
Nov 17 08:57 AMHow many electric car batteries can we build with the current proven supply of nickel? My guess is, not near as many as the world needs.
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fran
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234 Comments
Nov 17 09:00 AMno change in pickens plan. NG comes in two forms--LNG and CNG. you are presenting only partial information and incomplete analysis. nothing of consequence has changed in the story/justification for NG as transportation fuel alternative over past several years but the increase in domestic NG supply. why change NG to metanol base when not required. suggest extending your base of research; then republish with adequate analysis.
in addition to CLNE, WPRT web sites you might try googling--ngvamerica.org
also check WASTE MGT, WALMART, PACCAR TRUCKS, PORTS OF LA and LONGBEACH, FSYS, GHNG.OB[OTC], ETC. google yourself blind, but do complete work. UPS while your at it.
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Brahm
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56 Comments
Nov 17 10:22 AMSynthesis of liquid fuels (diesel) involves a thermal efficiency of about 50%. That means it takes about 2 MM BTU of CNG to produce one MM BTU of diesel! This chips off significantly the advasntage for a tacit objective of putting out less carbon to contain global warming. The author should not forget that rather than the volume of the tank it is the weight of the fuel and its BTU density which determines the overall performance (mpg) of the engine, if other issues such as engine burn characteristics, etc remain equivalent for the two fuels. BTU to BTU diesel is much more weighty than CNG!
There is an economic dimension to the issues I have raised. The fuel material input costs, i.e. the cost of natural gas input for diesel, is double that of CNG as a direct firing fuel (low synthesis efficiency!). In other words, the present $6 per MM BTU CNG becomes a $12 per MMBTU input cost for diesel. Add to this plant capital, depreciation, interest on capital borrowed, ROR, etc, you have $16 per MM BTU cost. Quite a lot more than $6 CNG!!! A massive shift to the use of this kind of diesel will roil gas markets, bring gas supply concerns, etc, etc and etc. MY guess is there would be no advantage vis-a-vis oil, especially if OPEC or other oil intersts turn themselves as upsetters of the apple-cart. Competition!!!
There are other profound issues which I will leave you, MR. Pickens and others to think and browse about. But there are there. Without good thinking we may go down a sticky wcket again. Please! Us, little people, and OBAMA does not need another mess on our hands through shoddy thinking and slickness. Please continue the good work with my blessings! And, if you have the energy to do it check it out with me. I am "retired", though, but would not mind giving my inputs
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Mmarrkk
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274 Comments
Nov 17 11:32 AMAre you trying to say "LPG"? Liquified Propane Gas? Like we use for our B-B-Q pits??
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jmac2000
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2 Comments
Nov 17 11:52 AM-
josetjack
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1 Comment
Nov 17 11:55 AM-
jmac2000
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2 Comments
Nov 17 12:03 PMOn Nov 17 11:32 AM Mmarrkk wrote:
> Please be careful with the use of LNG when discussing transportation
> fuels. The more generally accepted use of the term "LNG" is liquified
> natural gas which is what is used to transport natural gas around
> the world. It involves extreme temperatures/pressures and would not
> be a viable alternative for any transportation need.
>
> Are you trying to say "LPG"? Liquified Propane Gas? Like we use for
> our B-B-Q pits??
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bindlepete
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30 Comments
Nov 17 12:16 PMThe issue of natural gas as a feedstock for replacement of liquid fuels takes me to the direct use of methanol ( partially oxidized methane).
The DISC engine championed by Texaco and UPS in the last energy crunch can handle nearly pure methanol as can the idiotically small gas turbines such as the Capystone model with very high efficiency.
M-85 is my preferred fuel. Bank of America ran it's currier fleet on it for years with huge cuts in maintenance and emissions.
For non weight sensitive power ( rail roads and tow boats ) methanol run through a fuel cell makes sense. We are not out of options and a barrier against OPEC meddling is simple from a legislative viewpoint.
On Nov 17 10:22 AM Brahm wrote:
> The cylinder or space issues for CNG is not a significant issue in
> the case of CNG fired trucks.. The author's suggestions on liquid
> fuels, also advocated by many others and Mr. Pickens himself, is
> in my view a foolish intellectual contribution to the whole idea
> of global warming or energy independence due to the following reasons
> and others.
>
> Synthesis of liquid fuels (diesel) involves a thermal efficiency
> of about 50%. That means it takes about 2 MM BTU of CNG to produce
> one MM BTU of diesel! This chips off significantly the advasntage
> for a tacit objective of putting out less carbon to contain global
> warming. The author should not forget that rather than the volume
> of the tank it is the weight of the fuel and its BTU density which
> determines the overall performance (mpg) of the engine, if other
> issues such as engine burn characteristics, etc remain equivalent
> for the two fuels. BTU to BTU diesel is much more weighty than
> CNG!
>
> There is an economic dimension to the issues I have raised. The
> fuel material input costs, i.e. the cost of natural gas input for
> diesel, is double that of CNG as a direct firing fuel (low synthesis
> efficiency!). In other words, the present $6 per MM BTU CNG becomes
> a $12 per MMBTU input cost for diesel. Add to this plant capital,
> depreciation, interest on capital borrowed, ROR, etc, you have $16
> per MM BTU cost. Quite a lot more than $6 CNG!!! A massive shift
> to the use of this kind of diesel will roil gas markets, bring gas
> supply concerns, etc, etc and etc. MY guess is there would be no
> advantage vis-a-vis oil, especially if OPEC or other oil intersts
> turn themselves as upsetters of the apple-cart. Competition!!!
>
>
> There are other profound issues which I will leave you, MR. Pickens
> and others to think and browse about. But there are there. Without
> good thinking we may go down a sticky wcket again. Please! Us,
> little people, and OBAMA does not need another mess on our hands
> through shoddy thinking and slickness. Please continue the good
> work with my blessings! And, if you have the energy to do it check
> it out with me. I am "retired", though, but would not mind giving
> my inputs
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User 277223
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1 Comment
Nov 17 12:21 PMI will not be listning to him, either.
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fran
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234 Comments
Nov 17 12:31 PMwe said what we meant. join mr. wilson in his research. there are many. some direct in my response above.
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kebu77
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60 Comments
My Website
Nov 17 12:41 PMNot good enough.
We need to save energy in a hurry due to general oil depletion issues and for national security. The single largest energy efficiency / conservation option (with the possible exception of improving the energy efficiency of buildings) is to expand and electrify the freight railroads. (Passenger can follow, but freight now is critical.)
Diesel-electric rail transport is 10X more efficient that big rigs, not counting the savings on road maintenance and public safety from getting the big rigs off the road - - and electrified rail is double that. Rail saves so much energy that using coal-fired electricity to run trains reduces CO2 emissions compared to NG-powered trucks (gasoline and diesel are not even in the running).
Between the Civil War and 1905, America expanded the rail network from about 30,000 miles to 240,000 miles. The current network is a little over half that, due the the transition to trucking that came when we switched from a coal to an oil economy, and the largest use of rail is transport of bulk commodities (e.g., coal mine to power plant).
An added effort should be made to expand water transport of goods, incl. river/canal/coastal traffic and more shipping of Asian goods to Gulf and E. Coast ports via Panama Canal vs. Trucking from W. Coast Ports.
The diesel saved can go in part to ensuring that shortages of home heating fuel do not occur during the transition of building heating to geothermal heat pumps and other non-oil heating sources.
The International Energy Agency is finally coming around to the reality that an energy crunch is upon us with the end of cheap oil. (Even now, oil is not cheap @ 4X its 1998 low and 3X its 2002 low.)
This July The Oil Drum, theoildrum.com, published a detailed proposal by Alan Drake, a proponent of expanded and electrified rail, which can be found at www.theoildrum.com/nod.... Mr. Drake's dedication to the national interest come thru in every word.
The expanded rail network in the 19th century converted the US into a truly national ecomony by the end of the century. The relative impact of that effort was greater than the construction of the interstate highway system. (An anecdote tells the tale: the 1906 SF earthquake was about as devistating as Hurricane Katrina was on NOLA, but a much smaller country was able to provide what some have commented was more effective and timely relief from all over the country via rail.)
A government effort to support and guide the reconstruction of our freight rail system is needed now.
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frflyer
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134 Comments
My Website
Nov 17 01:08 PMRail is much better for long haul than trucks, much more efficient.
One problem with Picken's plan that immediately jumped out at me, is that what we really need to phase out is coal fired plants, as they are the dirtiest by far.
I forget the numbers, but coal transport accounts for a huge percentage of our rail capacity. As coal is phased out, it will free up rail freight capacity for other materials/products.
There are other problems with Picken's plan, which are analysed in depth at the following article from Climate Progress.
climateprogress.org/20.../
Windfarms can't function as peaker power plants as gas plants often do.
The most promising renewable energy solution for replacing coal fired plants is solar thermal power in the southwest. Solar thermal plants can operate as base load, follow on, or peaker power plants. No other renewable energy can do this.
A must read article on solar thermal and it's potential and how critical it is too a sensible energy policy for the future is at.
www.salon.com/news/fea...
Solar thermal is perfectly suited to the energy demand cycle during the day and can provide power at night. Thermal storage is at least 20 times more efficient than electric storage.
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mamie1
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1 Comment
Nov 17 01:12 PMOn Nov 17 08:55 AM NumbersGuy wrote:
> There isn't really a change here. His point about trucks is not new.
> He's always said that natural gas is for trucks, but using LNG for
> heavy duty trucks, CNG for lighter duty short-haul vehicles, taxis
> that pass by central stations etc. Look at CLNE's filings for more
> on that....
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Pipo
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266 Comments
My Website
Nov 17 02:07 PM-
john s. gordon
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695 Comments
Nov 17 03:07 PMrather than NG to diesel, oil shale to diesel (and jet-A) makes more sense. technologies are available from 1927 to do this. what is lacking is a water supply to revegetate the devastated landscape.
> jack
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Mmarrkk
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274 Comments
Nov 17 04:54 PMI think some of the issues expressed really are an issue of short vs long term goals and how we transition from one to the other. Getting rid of coal fired plants isn't going to happen in the next 5-10 years. Sorry, it just can't. The U.S. economy won't be able to handle it and that was true before this little depression/big recession hit us. Long term, yes we can move from coal if we are willing to accept the additional costs. Maybe we can ship our coal to other countries?? Or convert it to some other fuel that is more acceptable to our climate change/global warming/global freezing friends. Trying to be all inclusive as over the last 30 years I've seen concerns over too cold and too hot. Stop trying to keep up. Its going to be too something and we are to blame I guess.
Jack: from a security standpoint I don't have the same concern. One can do the same amount of damage with some of the rogue nuke material floating around the world. Just put the regas terminals in remote areas. LNG terminals are built all over the world. We in the U.S. are starting to lag the rest of the world when it comes to this source/supply. The Japanese, Chinese, Koreans, Australians, Qatari's, Spanish, Italians, Dutch, Germans, etc. all seem to have incoroporated LNG into their energy supply chains. Why not us?
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Alamo
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27 Comments
Nov 17 05:36 PMcubic ft of natural gas (mcf) contains approx 1 million BTUs---these are the generally accepted heat values. Crude oil is currently priced at about $65 per barrell whereas natural gas is about $6.50 per mcf or 58 per cent the cost of crude.
Oxidizing (ie; burning) crude versus nat. gas is 75 per cent or more polluting than natural gas. Shipping crude 6,000 miles by tanker presents additional pollution problems---anyone remember the Exxon Valdez environmental disaster? Alaskans and Exxon Mobil certainly do.
The EPA has said that the Honda Civic GX was the least pollouting vehicle they have ever tested---including the Toyota Prius. Anyone interested in burning crude, diesel or gasoline in their kitchen stove? I don't think so.
With the foreign policy disasters directly traceable to our reliance on crude supplies that we have to control with our military---a very deadly and unsustainably costly "control", I frankly cannot imagine why anyone would support any continuation of that insane policy. As world oil continues to decline we can anticipate 2 things: 1) more militarism and 2) economic ruin.
It is an absolute certainty that we must maintain an efficient and affordable transportation system fueled by an American produced energy source. In the immediate short term natural gas as the preferential fuel is an almost providential solution. Its American, its abundantly available, its less expensive and far cleaner than crude oil based fuels--gasoline or diesel. 40 per cent cheaper and 80 per cent less polluting and all-American. Win, win, win and WIND!
We need to bow our collective American necks and demand this change now.
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Robert Nabloid
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252 Comments
My Website
Nov 17 06:56 PMPickens plan is flawed and won't work; It's dead.
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billp37
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163 Comments
My Website
Nov 17 08:11 PM-
ED K
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74 Comments
Nov 18 09:17 AM-
GDS
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4 Comments
Nov 18 09:24 AMIn the real world there are only 2 (two) insurance companies that insure the storage and distribution of LNG, CNG, Propane or any other form of natural gas. Guess what! Their cost are like medical malpractice insurance and for good reason. Accidents that involve this fuel have the highest mortality rate of any type of energy accident. Multiply that time 10's of thousands fueling points necessary to properly distribute natural gas products and you can see the dilemma.
In the Authors last paragraph he mentions methanol. Methanol hasn't been used as a fuel additive for the masses in the US for at least 20 years. Groundwater contaminated with Methanol is almost impossible to clean up, No one in the industry willl touch it, except for limited uses.
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john s. gordon
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695 Comments
Nov 18 10:44 AM> jack
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Longinvestor
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18 Comments
Nov 18 01:08 PM-
Kofi Bofah
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72 Comments
My Website
Nov 18 05:05 PMThe sector could not compete with oil at $150 - it is now doomed with oil at $50-$60.
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Kofi Bofah
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72 Comments
My Website
Nov 18 05:07 PMLNG explosion in Cleveland?
Isn't Cleveland the same place where the river caught on fire?
I wouldn't really cite Cleveland as a terribly good example here.
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X-15
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66 Comments
Nov 22 11:49 AM7.6 million Barrels a day to move stuff around via USA roadways.
OR 304,000,000 million gallons
IF USA government instituted a deficit tax on Diesel and Gasoline of 25%
it would only create 63 Billion in new money to pay down on 11 Trillion dollar debt...we are so screwed.