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Natural gas as a transport fuel is not a new story. With over 14.8 million natural gas vehicles (NGVs) on the roads worldwide, the industry is well-established, challenging perceptions about how all forms of transport are powered. In addition to increased supplies–thanks to the US shale revolution–the change towards gas has been further incentivised by regulatory, economic, and environmental imperatives. Here we explore the future of a cleaner, more efficient means of powering our transportation globally.
With car ownership and road freight set to rise, combined with extensive innovations in NGV engines, natural gas as a road transport fuel is becoming highly competitive. The economic and environmental advantages are particularly acute for Heavy Goods Vehicles (HGVs), making them attractive to both individual operators and fleet businesses alike. The International Energy Agency (IEA) predicts that together the US and China will account for the majority of gas consumption in transport by 2035. By comparison the European market is slower to adapt, with only 10% of global NGVs. Yet here too change is taking place.
American Class 1 railroads spent a staggering $9 billion on diesel fuel in 2012, so the appeal of cheaper, cleaner natural gas is clear. The preferred rail solution is fast becoming Liquefied Natural Gas (LNG), which boasts cost savings of 40% to 60%. Although high capital investment costs are required to retrofit an LNG engine to a train, the overall cost saving is expected to be $200,000 each year across the typical 30 year lifespan of a locomotive. An added benefit is also the need to refuel less frequently.
Gas also has a significant role to play in marine transportation. Marine vessels have much lower turnover than road vehicles and both economic and environmental factors imply that many predict that gas powered ships could achieve the greatest market penetration. This is particularly true in the light of International Maritime Organisation regulations which seek to ensure that both industry and governments limit the amount of emissions from shipping over the next decade. In Europe natural gas fuelled ships are being built and operated in national waters. Norway has long been a front runner, and Statoil uses gas powered boats to transport goods and equipment to its offshore installations where the gas is extracted from below the ocean floor. Gas is also being used to power longer ocean voyages.
Christopher Le Fevre, of the Oxford Energy Institute, agrees that the opportunity for LNG fuelled ships in the marine sector is particularly significant, as it will form the base for the next wave of developments in the use of natural gas as a transportation fuel. “The combination of regulatory and economic drivers could kick start the build-up of a marine fuelling network that could then extend to land based applications in HGVs and rail.”
Natural gas as an alternative transport fuel works and is here to stay. The environmental and economic benefits, combined with market forces, are creating a new chapter in manufacturing and transport.
Learn more about natural gas’ role in the future of energy.
This article was produced by Statoil and not by the Quartz editorial staff.