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2009 NPRA Meeting: CNG As A Transportation Fuel: A Threat to Refiners?

March 25, 2009

Gasoline produced from the refining of crude oil has dominated the United States (U.S.) automobile and light truck fuel market for decades. Historically, inroads by other fuels, such as electricity, liquefied petroleum gas (LPG), and natural gas have been small and short in duration.

Recent events have changed how traditional sources of transportation fuel are viewed. Despite some false starts in the past, compressed natural gas (CNG) is once again emerging as a potential solution to a number of problems facing the U.S. The potential benefits of CNG as a transportation fuel include:

  1. Availability – U.S. proven reserves of natural gas are increasing, and the country is less dependent on natural gas imports (16%) than on crude oil and petroleum imports (73%).
  2. The Environment - The hydrogen-to-carbon ratio in CNG is higher than the ratio for either gasoline or diesel fuel, resulting in lower carbon dioxide (CO2) emissions from an automobile tailpipe. In addition, public policy debate regarding alternative fuels is likely to increase with the new Administration.
  3. Economics - CNG could potentially be more economic than liquid fuels given the "British thermal unit (Btu) discount" that is typically seen for natural gas versus (vs.) gasoline and diesel, and potential changes in public policies and subsidies.

So, an old idea has been resurrected: Can CNG be a viable fuel for U.S. light transportation needs?

Click here to view the entire paper, presented by David Freyman on March 23, 2009 at the NPRA Annual Meeting in San Antonio, Texas.