Will the result be a transformation of our economy similar to what happened in the 1990's with the Internet buildout?
From the New York Times:
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 Serviceplans 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.
U.P.S., like the rest of the industry, still has a long way to go in the conversion, but the company hopes to make natural gas vehicles a majority of its new heavy truck acquisitions in two years.
The company is benefiting from incentives provided by various states and the federal government, which offer tax credits and grants for installing natural gas fuel stations and using vehicles fueled by natural gas.
“By us doing this it will help pave the way and others will follow,” said Scott Wicker, chief sustainability officer at U.P.S.
“Moving into L.N.G. is a means to get us onto what we see as the bridging fuel of the future and off of oil,” he said. “It’s the right step for us, for our customers and for our planet.”
The move could also cut the country’s oil import bill. There are currently about eight million heavy and medium-weight trucks consuming three million barrels of oil a day while traveling the nation’s highways. That is nearly 15 percent of the total national daily consumption and the equivalent of three-fourths of the amount of oil imported from members of the Organization of the Petroleum Exporting Countries. Roughly two-thirds of the diesel used as transportation fuel nationwide feeds three million 18-wheelers, the main trucks hauling goods over long distances.
In the last four years, the natural gas shale drilling boom has produced a glut of inexpensive fuel, leading producers to argue that the country should wean its commercial and municipal transportation systems from a dependence on imported oil to domestically produced natural gas.
It is cheaper, saving truckers as much as $1.50 a gallon, and it burns cleaner, making it easier to meet emissions standards. The domestic fuel also provides some insulation from the volatile geopolitics that can drive up petroleum prices.
From National Geographic:
Over the past year, Clean Energy Fuels opted to make the first move in this game, building 70 fueling stations in 33 states. Most of those are dormant, awaiting a major development that has been delayed, but is now expected later this year—the roll-out of the first generation of standard-size heavy-duty trucks specially equipped to run on natural gas. When those trucks hit the road, Clean Energy Fuels says, its new truck stops will open.
"At the end of this year, you are coast to coast and border to border," the company's president and chief executive officer, Andrew Littlefair, said recently. "You have a nice skeleton and the work has just started."
ENN has made its foray into the U.S. market quietly, partnering with a small Salt Lake City, Utah, company, CH4 Energy and operating under the name Blu. The company told Reuters it already has five stations in operation and is opening three more in the coming weeks. (See related: "Pictures: A Rare Look Inside China's Energy Machine.")
The mover behind Clean Energy Fuels has been Pickens, who chairs the private equity fund BP Capital Management, which has significant holdings in companies focused on natural gas fracking (as well as an array of other energy investments). Pickens has been one of the most vocal proponents of switching to natural gas for transportation. (See related story: "Natural Gas Stirs Hope and Fear in Pennsylvania" and interactive "Breaking Fuel From the Rock.")
Under the Pickens Plan, introduced in 2008 and refocused to emphasize natural gas rather than wind energy in 2010, Pickens has described the shift as a way to minimize U.S. reliance on imported oil, reduce pollution and fuel costs, generate jobs, and provide a "bridge" to greener fuels. "It's a helluva deal for the country," Pickens said in an interview with Bloomberg last year.Another effect of the move to LNG by the Trucking/Transportation industry will be that America will be able to sell more of it's oil overseas. Already America's booming oil industry (fueled by Fracking in Texas and the Bakken Oil Field of Wyoming/Dakotas) has significantly decreased the Trade deficit:
Record petroleum exports helped shrink the U.S. trade deficit in December to the smallest in almost three years as America moved closer to energy self- sufficiency, a goal the nation has been pursuing since the 1973 Arab oil embargo.
The gap narrowed 20.7 percent to $38.5 billion, the smallest since January 2010 and lower than any estimate in a Bloomberg survey of 73 economists, Commerce Department figures showed today in Washington. Oil exports climbed $11.6 billion. Another report showed wholesale inventories unexpectedly declined in December.
In addition to trimming the trade deficit, greater fuel autonomy helps boost household incomes, jobs and government revenue and makes American companies more competitive. An improving global economy, reflected by record exports to South and Central America, also means manufacturers such as Caterpillar Inc. will benefit.
“The trend toward energy independence is there, and it is picking up,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston with more than 30 years of experience in refining and trading. “This bodes well for our economy. As our oil production increases, our reliance on other parts of the world for oil comes down.”From CNBC:
The Citi report, titled "Energy 2020: Independence Day," also projects a larger and quicker decline in demand for oil in the U.S. over the next decade or two, due to efficiency and the shift to cheaper natural gas.
For instance, Citi expects 30 percent of the U.S. heavy duty truck fleet to turn to natural gas-based fuel by 2015, well above the 10 percent it previously forecast. That would reduce diesel demand by an estimated 600,000 barrels per day. It also expects new automotive efficiency standards to reduce U.S. oil production by two million barrels per day, up from the one million forecast last year.
"Starting this year, North American output, as we indicate in this report, should start to have tangible impacts both on global prices and trading patterns, and will eventually turn the global geopolitics of energy on its head," the report said.
Morse surprised markets a year ago with a report that envisioned the U.S. as part of an energy independent North America. Since then, the view has become mainstream. The International Energy Agency forecast last fall that the U.S. will overtake Saudi Arabia and Russia as the top oil producer by 2017. The IEA also forecast that North America could become a net oil exporter by around 2030.This Energy surplus will make manufacturing affordable in the United States once again:
Steel makers, for example, benefit from both the lower cost of manufacturing and from strong demand for steel pipe used for oil and gas drilling. Companies in the steel rustbelt of Pennsylvania and Ohio are polishing up aging plants to replace coal with cheaper natural gas. Others are setting up shop closer to major gas distribution hubs like Louisiana, where steel giant Nucor is investing $750 million to fire up a new plant later this year.
Chemical, plastics and fertilizer makers, who rely on natural gas both as a raw material and an energy source, have also been expanding production. Last year,Dow Chemical announced a $4 billion investment in facilities, part of some $15 billion in expansion plans announced by Gulf Coast chemical makers.
And Vancouver-based Methanex Corp. decided last year to spend $425 million to disassemble an idled methanol plant in Chile and move it lock, stock and pipeline toLouisiana.
In December, economists with UBS bank tallied some $65 billion in announced construction of new plants related to cheaper natural gas, and said another 11 plants had been announced worth billions more.
As groundbreaking on these projects gets under way, the dividends from the energy boom will flow even further – to construction companies, engineering firms, materials and equipment suppliers and lenders who help finance the projects.
That, in turn, will help shore up state and federal budgets. The added revenue – from income taxes on new jobs created, corporate taxes on added oil and gas profits and state and federal royalty payments – could top $2.5 trillion through 2035, according to IHS Global Insight.It seems that no matter what China does, no matter what the UN does, no matter what the Kyoto Treaty attempts to do, no matter what Barack Obama himself does, no one can keep the American economy down for long.
It's the creativity that comes from the Freedoms (which are protected, not created, by our Constitution) which allow us to implement all these new ideas and technologies, and make us, always, the most powerful economy and nation in the world.