Natural Gas as a Transportation Fuel

David T. Messersmith, Extension Educator, Penn State EXTENSION
08/04/2013 - 08/11/2013

A look at the benefits, challenges and options of natural gas for transportation.

Interest in natural gas fueled vehicles has grown substantially in recent years as people seek lower cost alternatives to gasoline and diesel. Currently natural gas powers about 112,000 vehicles in the United States and roughly 14.8 million vehicles worldwide.

Benefits of Natural Gas Vehicles

  • Lower prices at the pump.
  • 20-30% fewer Greenhouse Gas Emissions and 95% fewer tailpipe emissions vs. gasoline.
  • Extended engine life.
  • Domestically produced energy.
  • Similar driving experience as conventional vehicles.

Challenges of Natural Gas Vehicles

  • Substantial up-front vehicle costs.
  • Limited places to refuel.
  • Limited vehicle selection.
  • Longer refueling times.
  • Shorter driving range vs. traditional fuels.

Natural Gas Fuels: What are the Options?

There are several forms of natural gas, as well as propane, that can be utilized as transportation fuels:

  • CNG (Compressed Natural Gas) is natural gas(CH4) compressed to 3,600 psi and stored onboard as a gas in pressurized tanks. CNG has a relatively low energy density compared to other fuels. It requires approximately 0.51 cubic feet of CNG to equal the btu value of one gallon of gasoline. In other words, a CNG tank with an interior volume of 20 gallons would hold the energy equivalent of 6 gallons of gasoline. So on a practical basis, CNG vehicles will have shorter driving ranges verses conventional vehicles with similar size fuel tanks. CNG vehicles are well suited for high-mileage, centrally-fueled fleets that operate within a limited area. They may also be a good fit for commuter vehicles in conjunction with home refueling units.
  • LNG, or Liquified Natural Gas, is natural gas (CH4) chilled to –260 degrees Fahrenheit and stored as a liquid in thermal tanks. One gallon of LNG has 64% of the btu value of one gallon of gasoline. LNG is much more energy dense than CNG so LNG is often more suited for vehicles needing to travel longer distances between refueling. Best applications include class 7 and 8 heavy duty vehicles, marine and rail. One of the problems with LNG as a fuel is that as it warms, the fuel needs to be utilized or vented. So LNG should be utilized within a few days of refueling. Therefore LNG is not well suited to vehicles that sit for long periods of time between uses.
  • Propane is a hydrocarbon gas (C3H8) often produced in association with natural gas and petroleum. Significant amounts of propane are produced in liquids-rich areas of the Marcellus and Utica shales in western Pennsylvania and eastern Ohio. Propane is stored in a liquid state at 200-300 psi. One of the advantages of propane is that it can be delivered and stored via lower pressure and less costly equipment compared to CNG. It also has a relatively high energy density: one gallon of propane has 73% of the btu value of one gallon of gasoline. Propane is best suited for light duty cars and trucks and school busses; although at current market prices it’s not cost-competitive with CNG.

A look at how natural gas is priced and how market changes affects pricing.

CNG Pricing and the GGE Concept:

At the retail level CNG is bought and sold in units of ‘gasoline gallon equivalent’ or ‘GGE’. The National Conference of Weights and Measures has standardized and defined the GGE unit of measurement as 5.660 pounds of natural gas. Simply stated, one GGE of CNG contains the same amount of energy as one gallon of gasoline. Although there is some variability between models, vehicles generally achieve the same levels of engine performance and efficiency (miles per gallon) on CNG and gasoline.

How do Market Changes Impact the Price of CNG at the Pump?

One of the leading benefits of CNG is its cost-competitiveness at the pump compared to gasoline or diesel. However it’s important to understand how prices at the pump are impacted by natural gas market fluctuations. Below are two examples that illustrate a current price scenario (Example A) and a scenario with increased natural gas prices (Example B):

Example A:

At a natural gas wellhead price of $4.00 per Mcf, a CNG station owner could buy natural gas on the market for approximately $0.94 per GGE. The station owner would add compression, maintenance, taxes, equipment and capital costs totaling $1.50 per GGE. So in this example the retail price at this CNG station would be $2.44 per GGE.

Example B:

Now let’s assume the wellhead price of natural gas doubled and becomes $8.00 per Mcf. In this case a station owner could buy natural gas on the market for $1.44 per GGE. The station would then add the same costs for compression, maintenance, taxes, equipment and capital totaling $1.50 per GGE. So in this example the retail price of CNG would increase to $2.94 per GGE.