Natural Gas By Rail (NGBR) -- August 4, 2014

I thought I posted this, but I can never find it. So, for the archives: the next big thing -- natural gas by rail. Reuters is reporting:

As politicians debate the dangers of a massive increase in oil carried by rail in North America, railroads and energy producers are considering the same for natural gas.

Buoyed by the unexpected success of crude by rail, companies are beginning to consider transporting natural gas as remote drilling frontiers emerge beyond the reach of pipelines, executives said. 

Natural gas by rail is years away and likely to face strong public resistance after a series of explosive crude-by-rail accidents. But the potentially multibillion-dollar development could connect gas-rich regions like North Dakota with urban centers, presenting an opportunity for railroads, drillers and tank car makers already cashing in from hauling oil on trains. 

It could also be a cure for environmentally unfriendly flaring, a growing problem in far-flung areas where more than $1 billion of natural gas produced alongside oil is burned off each year for lack of processing plants or pipelines that can take years to build. 

Speaking of " railroads, drillers and tank car makers already cashing in from hauling oil on trains," Berkshire Hathaway/Warren Buffett reported 41% increase in profits this last quarter; and, Warren's company now has the most cash ($50 billion) on hand of any company in the United States. Warren owns Burlington Northern Santa Fe, the #1 mover of crude oil in the United States, possibly in North America. You can bet that Warren's 41% increase in profits wasn't from selling ice cream cones at Dairy Queen, especially not in the second quarter. By the way, this was Warren Buffett's biggest quarter ... ever. He can thank Mr Bakken.

What should Warren do with all that cash? Buy Union Pacific. LOL. 

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Cocktail Trivia

I did not know this. Reuters via Rigzone is reporting:

The summit aims to showcase American interests in the region, home to six of the 10 of the world's fastest-growing economies and the fastest-growing middle class, through public-private partnership deals. 

The region? Africa.

I would have guessed China had six of the 10 fastest growing economies, followed by Dickinson, Watford City, Williston, and Parshall.

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Bumper Stickers

http://www.zazzle.com/FirstPrinciples

The Road To New England -- August 4, 2014

The Christian Science Monitor is reporting:

In the first three months of 2014, Massachusetts residents paid nearly as much for energy as they did in all of 2012, according to Independent System Operator-New England, a nonprofit formed by the Federal Energy Regulatory Commission (FERC) to oversee the region’s bulk power system. While natural gas prices in New England averaged around $36 per megawatt hour in 2012, they routinely spiked above $200 per megawatt hour over that period.

And apparently the folks in Massachusetts don't mind. 

I'm just a spectator in all of this; I have no dog in this fight. It will be interesting to see how this plays out. LOL.

By the way, the next big thing in railroading: liquid natural gas by rail. 

Here are the realities:

• contrary to what the nuts with the eccentric signs (their words, not mine) say, New England's demand for energy will increase (unless industry and jobs go away);
• New England is shutting down its coal plants and nuclear energy plants;
• solar and wind can't come close to making up the coal/nuclear loss;
• customers will get their natural gas one way or the other -- yes, that's reality;
• if the nuts with the eccentric signs (their words, not mine) don't like pipelines, they can watch unit trains carry highly volatile natural gas in from the Marcellus (no, it won't be Bakken natural gas; it will be Marcellus gas); and,
• it won't get less expensive by putting the inevitable off

But after watching the Boston folks pay for the "Big Dig," it appears they are used to paying for their mistakes.

You're Goin' Nowhere, Chris Isaak

Hess, Natural Gas Pipeline, Processing Plant

The Dickinson Press is reporting that the Alliance pipeline is completed.

The 80-mile-long Tioga Lateral Pipeline will move natural gas from Hess Corp.’s gas processing plant near Tioga and tie in to the existing Alliance mainline near Sherwood, just south of the Canadian border in Renville County. From there, the gas will make its way to processing facilities and other market connections in the Chicago area.

However, while the pipeline was ready for service on Sept. 1, gas won’t move through it until Hess Corp., which has contracted with Alliance to use about 50 percent of the pipeline’s capacity, finishes doubling the processing capacity of its Tioga plant to 250 million cubic feet per day. Steve McNally, Hess Corp’s general manager for North Dakota, said the expanded plant will open soon, but he wouldn’t say exactly when, saying more details would be available in the company’s quarterly report due out Wednesday.

There are several story lines here. Regular readers will know which story most interests me. Click here for the original post on the Alliance pipeline.

I track pipelines of interest here.

Enbridge/Alliance Offers Post-2015 Capacity -- Huge NG Pipeline Story; This Is What The Keystone XL Could Have Been (Oil, Of Course)

Updates

October 29, 2013: the Alliance pipeline was completed September 1, 2013; won't go into service until Hess Tioga natural gas processing plant enlarged. I track pipelines of interest here. 
 

Original Post

Press release:

Unlike most natural gas pipelines, the Alliance system is capable of transporting methane and entrained NGL in a dense phase stream. Alliance's rich gas design allows producers to avoid costly investments in gas plant processing infrastructure. The Aux Sable Liquid Products plant at the Alliance system's southern end near Chicago extracts and fractionates the various NGL components into specific marketable products. Alliance's average annual capacity is 1.6 bcf/day and the system is in proximity to more than 6 bcf/d of natural gas supply looking for attractive markets.

From the Alliance website:

The Alliance Pipeline system consists of 3,719-kilometre (2,311-mile) integrated Canadian and U.S. high-pressure natural gas transmission pipeline system, delivering rich natural gas from the Western Canadian Sedimentary Basin and the Williston Basin to the Chicago market hub. The United States portion of the system consists of approximately 900 miles of mainline and related infrastructure. The system has been in commercial service since December 2000 and delivers, on average, about 1.6 billion standard cubic feet (or 45.3 million standard cubic metres) of natural gas per day. 

The Alliance has its own wiki page:

Alliance Pipeline is a natural gas transmission system that transports high-energy, rich natural gas from northeastern British Columbia and northwestern Alberta through Saskatchewan, North Dakota, Minnesota, and Iowa to its terminus in Illinois.

Approximately 1.6 Bcf/d of rich natural gas is safely delivered to Chicago each day, supplying approximately 5% of the residential natural gas needs for this market. The system, including lateral and delivery segment lines, is more than 3,719 km (2,311 mi) long with 14 mainline compressor stations—seven in Canada and seven in the United States. The compressors are driven by 31,000 to 46,000 horsepower (23 to 34 MW) gas turbines—similar to the turbines that power large airplanes.

Evidence Of A Tipping Point? Have Trucking and Natural Gas Gone Mainstream?

Will we look back on this story in five years and realize we were witnesses to that point in time when US trucking and natural gas went mainstream?

I know that looking back to March 20, 2000, this will be remembered as the tipping point when scares about global warming became a joke.

But I digress.

Back to the story at hand. 

Will we look back on this story five years from now and realize we were witnesses to that point in time when US trucking and natural gas went mainstream?

The New York Times is reporting: the trucking industry is set to expand its use of natural gas.

Now the trucking industry, with its millions of 18-wheelers moving products like potato chips, underarm deodorant and copy paper around the country, is taking a leap forward in switching from petroleum to cleaner-burning natural gas. And if natural gas remains cheap, consumers may benefit again.

This month, Cummins, a leading engine manufacturer, began shipping big, new engines that make long runs on natural gas possible. A skeletal network of refueling stations at dozens of truck stops stands ready. Major shippers like Procter & Gamble, mindful of both fuel costs and green credentials, are turning to companies with natural gas trucks in their fleets.

And in the latest sign of how the momentum for natural gas in transportation is accelerating, United Parcel Service plans to announce in the next few days that it will expand its fleet of heavy 18-wheel vehicles running on liquefied natural gas, or L.N.G., to 800 by the end of 2014, from 112. The vehicles will use the new Cummins engines, produced under a joint venture with Westport Innovations. 

This story is simply huge. 

By the way, we've talked about the safety precautions required while re-fueling with LNG. Some folks have written in suggesting that this could be a show-stopper. Not to worry. Truckers will be inside having dinner, showering, checking their e-mail, while "professionals" are fueling their trucks.

I forget where, but it might have been RBN Energy saying that there needs to be a "new" market to soak up all the natural gas being produced in the US. Perhaps long-haul trucking will be that "new" market.

The Flip Side of the Natural-Gas Boom, WSJ

We've talked about the "importance" of page three in newspapers. This story occupies the entire page today, except of course for the ads, including Warren's ad for NetJets, the Signature Series. No, the NetJets are not a basketball team. But I digress.

Link to natural-gas boom's flip side, WSJ: A long article on the demise of King Coal and the rough spot West Virginia is in. It's pretty much all about the low cost of natural gas, but there is no mention of the administration's role in killing coal, unless I missed it. My hunch is that coal and natural gas would be competitive if left to market rules, but the administration's goal to kill coal certainly must have played a role.

Another Milestone on the Road to a Natural Gas National Interstate System

Updates

December 23, 2012: The Colorado-to-Wyoming CNG corridor continues to expand. When I see these stories I am "thrilled" to see private enterprise doing this, but if the faux environmentalists and the current administration were serious about CO2, about addiction to oil, about Saudi imports, there would be a "Manhattan-like" program "to CNG" the nation.


October 17, 2012: Wyoming continues to push plans for CNG corridor.

A state legislative committee pledged support for two bills Tuesday which, if passed, could go a long way toward making Wyoming a leader in alternative fuels.

Meeting in Casper, the Joint Minerals, Business and Economic Development Committee first passed a measure that would slowly transition up to half of the state’s vehicle fleet to run on compressed natural gas by 2017. The second measure amends a state loan program to include compressed natural gas-related incentives.

October 11, 2012: "CNG in a box."

GE launched its “CNG In A Box” system this week, to expand fueling options for vehicles that run on compressed natural gas, the company has announced.

GE touts the all-in-one refueling system, developed in partnership with Chesapeake Energy affiliate Peake Fuel Solutions, as a plug-and-play solution that makes it quick and easy for retailers to expand their fuel selection.

At least 250 CNG In A Box systems will be distributed beginning this fall, the companies said.  CNG In A Box comes in an 8-foot-by-20-foot container, according to GE. The system compresses natural gas, delivered via pipeline, onsite and dispenses the fuel using a pump similar to that used at a traditional gasoline station.  

October 7, 2012: investment opportunities in natural gas as a transportation fuel; natural gas corridor; SeekingAlpha.com article.

May 15, 2011: Encana extends CNG corridor. This is from Rock Springs, WY, to Salt Lake City, UT.

Original Post

A great link sent in by "anon 1." This could compete for "top story" of the week. This story has so much on so many levels.

Shell and TravelCenters of America announced that starting in 2013, they plan to sell liquefied natural gas to on-highway customers through the existing network of full-service TA and Petro fueling centers. (LNG is viewed as a more suitable alternative fuel for long-haul operations because it has more range than compressed natural gas, or CNG.)

There's a  lot more at the link. Note the number of jobs that this initiative will generate. Politicians are having trouble coming up with ideas for jobs, but the private sector seems to be doing just fine.

See also this post on an update on the "natural gas national interstate system."

Later, Mike provided this link, asking whether GE's micro-LNG plants might not make sense for these refueling stations?