Today, the U.S. Senate Energy and Natural Resources Committee is having hearings in which they will discuss alternative transportation fuels with special attention given to natural gas-powered vehicles.
With the price of gasoline as high as it is, Compressed Natural Gas (CNG), is looking really good these days and increasing its usage in vehicles would be a boon to Louisiana. Currently, a gallon of CNG fuel costs about $1.79 as compared to a $3.47 per-gallon national average for regular gasoline.
Louisiana is the Saudi Arabia of natural gas, said Louisiana Oil and Gas Association Vice President Gifford Briggs, with the Haynes Shale being the largest known supply of shale gas in the world.
The industry is suffered from a supply glut and jobs are being lost in our state, however, due mostly to lack of refining and storage facilities that would make it cost effective as an export commodity. Federal environmental hurdles aren’t easy to get over, either, and add to costs associated with fracking. A few years back, high prices caused a rush, but supply is so high now that drilling isn’t really worth the investment. Back in 2008, prices were as high as $12 per-million British thermal units (MMBtu), but that’s dropped down to about $2.70 per-MMBtu.
“We are the Saudi Arabia of natural gas, but prices are going to have to come back up to about $3.50 to $4 to make things profitable,” Briggs said. “There are only about 25 rigs working now at Haynesville and that’s down from around 140 from just two years ago.”
While the federal government continues to throw billions down the crapper on green energy that doesn’t work, the one that does—natural gas—hasn’t gotten the support it needs to take off as a gasoline alternative:
There have been strides made in Louisiana to grow the CNG gas market—like in Lafayette where city busses have been converted to use CNG gas—but there are lots of obstacles to be overcome before the fuel becomes a viable alternative to gasoline and diesel.
The primary problem is infrastructure. While the number of CNG stations are growing—there are only 11 across the state—they’re nowhere close to enough to give people an incentive to convert their vehicles or spend the money on a new one that’s able to accept CNG gas. Much less, for gas stations to invest in CNG. Bills like the Nat Gas Act and Rep. Bill Cassidy’s H.R. 1712, include things like tax incentives for individuals and businesses and restructuring of the tax code to grow CNG gas assumption but haven’t gotten very far.
This is something that holds a lot of potential for growing jobs and state coffers here in Louisiana, so it’s worth keeping an eye on what—if anything—comes from these hearings.