Compressed natural gas and liquefied natural gas

Products and services–

Compressed natural gas is essentially comprised of methane that is extracted from natural

gas and condensed wells, oil wells, and coal bed methane wells.1 Although natural indicates that

natural gas is renewable energy, natural gas actually is considered a fossil fuel since the gas is

separated from free liquids such as crude oil, hydrocarbon condensate, and water after being

extracted.2 However, it is one of the most clean energy resources that work for us in the present

moment.

Liquefied natural gas is the exact same thing as compressed natural gas. The only

difference is that it comes in liquid form. Liquefying natural gas requires that natural gas needs

to cool down to about -260 degrees F in which is the temperature where the gas condensates into

a temperature.3 This allows the gas to be stored in double-walled, vacuum-insulated pressure

vessels and transported long distances due to the larger density of liquid compared to.1

In the long term, liquefied natural gas allows stranded natural gas reserves to be extracted

and transported for alternatives that wouldn’t work like the construction of gas lines in places

that are hard to access. 3 Many of the liquefied natural gas essentially makes transporting the gas

much more cost-effective because of efficiency by taking up less space.

1 Alternative Fuels Data Center. (2013). Natural Gas Fuel Basics. Retrieved from http://www.afdc.energy.gov/fuels/natural_gas_basics.html

2 Alternative Fuels Data Center (2013). Natural Gas Production. Retrieved from http://www.afdc.energy.gov/fuels/natural_gas_production.html

3 NaturalGas.org. (n.d.) Liquefied Natural Gas (LNG). Retrieved from http://www.naturalgas.org/lng/lng.asp

There are multiple reasons why customers and fleets will be attracted to using liquefied

natural gas and compressed natural gas fueling station. A big factor that businesses are focuses in

on are environmental sustainability and how we can leave less of a carbon footprint as humans.

A natural gas fuel station starts to satisfy this desired need because of the cleanliness impact on

the environment. If LNG or CNG spills, 100 percent of it evaporates and it leaves no traces on

the environment.4 The oil and coal industry has a greater negative consequence on the earth

compared to the natural gas industry.5 Natural gas has lower carbon content which means using

natural gas could reduce tailpipe emissions as well as providing an opportunity to better life

cycle greenhouse gas (GHC) than conventional oil.6 Studies also have found the cleanest coal

technologies emit 70% more GHC than the capacity of power produced by LNG. 4 Natural gas

also has been found that natural gas contributes to smog 20% to 45% less than oil as well as 5%

to 9% less greenhouse gas emissions.7 With this environment health benefit, consumers and

business will be more drawn into the idea of slowly switching to natural gas.

In addition, the United States has many rich natural gas reserves located in many parts.

95% of natural gas that is consumed in the United States is also produced here, compared to 45%

4 Center for Liquefied Natural Gas. (2013). Environment. Retrieved from http://www.lngfacts.org/about-lng/environment/

5 US Environmental Protection Agency: (2012). Clean Alternative Fuels: Compressed Natural gas. Retrieved from www.epa.gov

6 Alternative Fuel Data Center (2013). Natural Gas Vehicle Emissions. Retrieved from http://www.afdc.energy.gov/vehicles/natural_gas_emissions.html

7 Fuel Economy. (2013). Natural Gas. Retrieved from http://www.fueleconomy.gov/feg/bifueltech.shtml

of oil that is imported.8 Adding another fuel alternative for our society would increase our energy

security since many of our oil imports come from violate countries. Another benefit from having

a large supply of natural gas reserves in the US are the positive impact on economic growth of

this nation. Tapping into our natural gas reserves will let us export natural gas which will

increase tax revenues and reduced our current trade deficit.9 Adding alternative energy fuel

stations will also increase job growth with building the stations as well as converting and

creating alternative energy vehicles.

Gas gallon equivalent is the amount of energy produced by alternative fuel that is equal to

the energy content of one liquid gallon of petroleum. This lets consumers compare the energy

content of alternative fuels to the normal transportation fuel that is used in the majority of the

globe. Gas prices in natural gas fueling stations are priced at the gas gallon equivalent.10 In 1994,

the U.S. National Institute of Standards and Technology defined the GGE of natural gas is 5.660

pounds. In other words, this means compressed natural gas run vehicles require more refueling

per miles than conventional oil because there’s less energy content to a normal gas tank in a

car.11 However, with liquefied natural gas and an extra storage tanks can increase the range for

larger and heavy duty vehicles.

8 NGVA. (2013). About NGVS. Retrieved from http://www.ngvamerica.org/about_ngv/index.html

9 Center for Liquefied Natural Gas. (2013). FAQ. Retrieved from http://www.lngfacts.org/about-lng/faq/

10 Wikipedia. (2013). Gas gallon equivalent. Retrieved from http://en.wikipedia.org/wiki/Gasoline_gallon_equivalent

11 Alternative Fuels Data Center. (2013) Fuel Prices. Retrieved from http://www.afdc.energy.gov/fuels/prices.html

Another minor disadvantage is the limited vehicle availability for CNG based cars and

the higher cost.5 However, the number of gas vehicle are growing slowly and certain vehicles can

be converted if they meet regulations set by the U.S. Environmental Protection agency. Between

1997 and 2009, demand for natural gas grew threefold to 27.7 million gasoline gallon equivalent

for fleets like delivery trucks, refuse trucks and transit agencies.12 With the growing production

and popularity with NG vehicles, the costs are expected to offset the cost of switching to NG

cars.

Pricing Strategies– How does the cost of a GGE of CNG compare to that of gasoline or diesel?

The market for natural gas in the local region is very small with stations in Grand Junction,

Denver, and Ignacio. The main goal of this project is to establish a foundation where consumers

and business can use CNG and LNG vehicles for the long term. The switch to alternative energy

for transportation and for our society in general will inevitably so the earlier the start, the better.

Currently, there are 1,200 public and private CNG stations in the United States compared to

120,000 retail gas stations. 12

12 Loser, M. (2012) Valley Civil Design Group. CNG Infrastructure Guide. Retrieved from http://etuo.uh.edu/ngva/wp-content/uploads/2013/11/CNG_Infrastructure_Guide.pdf

Compressed and liquefied natural gas provide a cheaper alternative to gas and diesel with natural

gas costing from $1.50 to $2.00 less per gasoline equivalent.8 In the following graph, CNG is

much more stable than the price of gasoline and diesel. However, it’s important to note that

natural gas and electricity have been padded from the driver for the reason that they have a very

small market share in the industry. 11

Tax Benefits–

To provide incentives to switch over to natural gas, Colorado has added a capped $6,000 tax

credit for alternative fuel vehicles. If lower than $6,000, depending on what category the car is

in, the credit amount ranges from 75% to 10%. For compressed and liquefied natural gas

vehicles, they’d fall under 55% credit amount if unable to max out the credit.13

13 Alternative Fuels Data Center. (2013). Laws and Incentives. Retrieved from http://www.afdc.energy.gov/fuels/laws/3253/CO

Colorado also exempt low emission vehicles from the state sales tax that are certified to federal

LEV standards and has a gross vehicle weight rating of 10,000. 13 In addition, Colorado also

exempts natural gas fuel station to file an Air Pollutant Emission notice. The last incentive

Colorado has is the weight exemption where alternative vehicles that weigh more than the limit

can use highways that aren’t part of the interstate system. 13

Safety, Regulations and Taxes–

A characteristic of natural gas is that’s its mildly flammable. Compressed and liquefied

natural gas is only flammable when the ratio of Oxygen and natural gas mixture is between 5%

or 15%. With the small risk natural gas poses, it is viewed as a safe fuel and CNG/LNG run

vehicles are as safe as gas powered vehicles. 5

To build and run a compressed and liquefied natural gas station, there are many

regulations and codes to follow and maintain. OSHA and the Uniform Fire Code is among many

code-forming organizations that a CLNG fuel stations to comply with. In addition, the station

must fit the criteria for site selection to comply with land and access, utilities and other pre-

construction considerations. 12 To see the complete list of regulations, codes and selection

criteria, please see Appendix A.

Fleet vehicles also have to adhere to specific Colorado regulations are applied to

alternative fuel run vehicles. For instance, a vehicle needs to be registered with Colorado

Department of Revenue Division of Motor Vehicles and state what alternative fuel is used to

operate the vehicle and whether or not if it can run on more than fuel.13 Please see Appendix B

for the whole list of Colorado and Federal regulations.

In addition, compressed and liquefied natural gas will be taxed starting January 1st,

2014.13 Please see Appendix C for the taxes imposed after 2014.

Bibliography–

Alternative Fuels Data Center. (2013) Fuel Prices. Retrieved from http://www.afdc.energy.gov/

fuels/prices.html

Alternative Fuel Data Center (2013). Natural Gas Vehicle Emissions. Retrieved from http://

www.afdc.energy.gov/vehicles/natural_gas_emissions.html

Alternative Fuels Data Center. (2013). Natural Gas Fuel Basics. Retrieved from http://

www.afdc.energy.gov/fuels/natural_gas_basics.html

Alternative Fuels Data Center (2013). Natural Gas Production. Retrieved from http://

www.afdc.energy.gov/fuels/natural_gas_production.html

Alternative Fuels Data Center (2013). Alternative Fuels Data Center: Natural Gas Vehicle

Emissions. Retrieved from http://www.afdc.energy.gov/vehicles/natural_gas_emissions.html

Alternative Fuels Data Center. (2013). Laws and Incentives. Retrieved from http://

www.afdc.energy.gov/fuels/laws/3253/CO

Alternative Fuel Data Center (2013). Natural Gas Vehicle Emissions. Retrieved from http://

www.afdc.energy.gov/fuels/laws/3253/US

Center for Liquefied Natural Gas. (2013). Environment. Retrieved from http://www.lngfacts.org/

about-lng/environment/

Center for Liquefied Natural Gas. (2013). FAQ. Retrieved from http://www.lngfacts.org/about-

lng/faq/

Fuel Economy. (2013). Natural Gas. Retrieved from http://www.fueleconomy.gov/feg/

bifueltech.shtml

NaturalGas.org. (n.d.) Liquefied Natural Gas (LNG). Retrieved from http://www.naturalgas.org/

lng/lng.asp

NGVA. (2013). About NGVS. Retrieved from http://www.ngvamerica.org/about_ngv/index.html

Liquefied Natural Gas (LNG) as a Transportation Fuel. (n.d.). Consumer Energy Center.

Retrieved from http://www.consumerenergycenter.org/transportation/afvs/cng.html

Loser, M. (2012) Valley Civil Design Group. CNG Infrastructure Guide. Retrieved from http://

etuo.uh.edu/ngva/wp-content/uploads/2013/11/CNG_Infrastructure_Guide.pdf

Wikipedia. (2013). Gas gallon equivalent. Retrieved from http://en.wikipedia.org/wiki/

Gasoline_gallon_equivalent

US Environmental Protection Agency: (2012). Clean Alternative Fuels: Compressed Natural gas.

Retrieved from www.epa.gov

Appendices–

Appendix A:

Appendix B:

Appendix C: Taxes for Natural gas (CNG), liquefied natural gas (LNG), and liquefied petroleum

gas (LPG). 13

2014 2015 2016 2017 2018 2019 & BeyondCNG $0.03 $0.06/ $0.09 $0.12/ $0.15 $0.183LNG $0.03 $0.05 $0.07 $0.08 $0.10 $0.12LPG $0.03 $0.05 $0.07 $0.09 $0.11 $0.135