Via Meadia has been consistently following the fracking revolution sweeping the U.S., and we continue to be optimistic about the impact of our natural gas industry on energy security and climate change. Today we add another reason for our optimism. The WSJ has the story:
The shale gas revolution, which cut the price of natural gas by about 45% over the past year, already has triggered a shift by the utility industry to natural gas from coal…Now the shale-gas boom is rippling through transportation. Never before has the price gap between natural gas and diesel been so large, suddenly making natural-gas-powered trucks an alluring option for company fleets……[T]ruck manufacturers are embracing natural gas for everything from bi-fuel pickup trucks like the Chevy Silverado HD to eighteen-wheelers that can burn natural gas either compressed, called CNG, or super-chilled, called LNG…For years, a barrel of oil cost about as much as six units of natural gas and their prices moved in tandem, notes Don Mason, a gas-industry consultant in Ohio. Today, a barrel of West Texas Intermediate crude costs more than 33 times as much as a unit of natural gas in the U.S. At the pump, a gallon of diesel often costs more than twice as much as CNG, on a diesel-gallon-equivalent basis.
According to the EPA, which updated its methodology for investigating the amount of greenhouse gases emitted through the entire life cycle of natural gas fuels this year, natural gas burns cleaner than both diesel and gasoline, not to mention coal.There are many challenges involved in transforming our nation’s transportation industry to run on natural gas: though natural gas has become less expensive than other fuel alternatives and seems likely to drop still further, that may not always be the case; we lack a reliable network of refueling stations; bulky tanks are required for compressed gas, and liquified gas is dangerous; less than 0.1 percent of vehicles on American roads run on natural gas; dangerous amounts of methane (a stronger greenhouse gas than CO2) are released during the life cycle of natural gas.Yet the economic argument for transportation companies switching to natural gas from diesel is compelling, and studies suggest natural gas has less impact on the environment than alternatives. Most important, America has lots of this stuff.Via Meadia remains optimistic. Frack baby, frack.