Wednesday, June 29, 2011

If 60 million bbl SPR release moves oil price, what could CNG do?

The release of 60 million barrels of crude oil and its derivatives from the Strategic Petroleum Reserve over 30 days is obviously a short term supply, as the crude oil is not produced, it is simply released from storage.  The global crude oil market consumes approximately 88 million bpd (according to IEA), so this 30 day release of 2 million bpd is 2.25% of the daily oil consumption.

So, imagine what would happen to crude oil prices if just 2.25% of crude oil demand was reduced PERMANENTLY by conversion of the demand to CNG?

According to recent news reports, the US could lose up to $1.5 Billion due to buying high and selling low on the 30 million bbls it's releasing from the SPR.  That's just for 30 days of benefit, because on day 31 guess what the price of crude oil will do?  Go back up!

Meanwhile, House Bill 1380, the Nat Gas Act, would cost between $5 and $9 Billion, but would create PERMANENTLY reduced oil consumption.

The US release of SPR for a 30 day price benefit (which will actually INCREASE oil price by encouraging demand and discouraging increased supply by suppressing price in the near term) makes the case for why the US should incent CNG adoption.

Saturday, June 18, 2011

Rebutting critics of Nat Gas Act - HR 1380

Some critics argue against subsidies for budget reasons - and they should.  Other critics claim "fracking" will destroy American water supplies - that claim is disingenuous, because it blindly ignores the environmental harm of the incumbent fuel - gasoline.

Regarding the subsidy argument, ask your congressman why the US went into Iraq, twice. Why are we in Libya?  What justification is there for these costs?  I say that it's oil security.  Why are these military costs not considered a "subsidy" for crude oil?

CNG works.  As this blog shows, I've been driving a Honda Civic GX for 18 months and 28,000 miles in Oklahoma.  Infrastructure?  Most of it's already there - most gasoline stations have a natural gas meter connected to the store!  All it takes is a compressor to get the natural gas from that existing meter into my car!  No gasoline tankers twice a day, no refinery, no tank farm, no crude oil hauled from the Middle East.

Regarding "fracking", which sounds more environmentally risky?  Crude oil and gasoline shipped around the world in a bunch of buckets or a complete closed system that flows pressurized fuel from 8,000 ft underground to the injectors in my car?  Please consider that big picture when you are claiming that "fracking" is killing babies while you fuel your car with $3.40/gal gasoline.

Another question to consider - who benefits from the $1.39/gal paid for CNG fuel?  Tracing back from the station - the American station owner and the American workers that built it, the American pipeline company and the American workers that built it, the American producer and the American driller who drilled the well, and finally, the American mineral owner who gets over 10% over the proceeds in royalty checks.  If you follow the money on gasoline, you'll find yourself outside America real soon...

CNG Honda Civic GX trial a huge success

My own trial of CNG began about 18 months ago when I purchased a Honda Civic GX.  At that time, I was only saving about 75 cents/gal; now I'm saving $2.50 per gallon!

The trial has been tremendously successful (28,000 miles on the odometer).  Now as my daughter is about to start driving it's time to expand the "fleet".  We have determined that we will not purchase another vehicle that does not run on CNG.

Key questions I had at the start of the trial:
  • Range? The Civic has been able to go everywhere we want to go in such a small car - Oklahoma City, Neosho, MO, Dallas.  200 miles per tank reliably, as high as 230 miles sometimes.  2 convenient filling locations in Tulsa, one off 169 at 51st St and one off 75 at 71st St, and 5 others scattered about.  Refueling is as easy as gasoline as shown in the 3 minute video.
  • Size?  The trunk is small, but it passed the Target grocery cart test.
  • Speed?  First, it's a Civic... but it can run the turnpike at 85 mph with the cruise set.  
  • Maintenance? Three oil changes and one fuel filter changeout at Joe Marina Honda.  No repairs have been necessary.  The oil at 8,000 miles looks like new oil. 
  • Safety?  I now feel safer with the CNG car than I do with a gasoline car - during refueling, when driving, when parked in the garage.  CNG is lighter than air, is never a liquid.  I love the video and the description of CNG tank testing shown here
Areas for improvement:
  • More fuel stations needed.  It would be so wonderful if QT would put in some stations like the one at the Love's in Kingfisher.
  • More OEM vehicles needed.  Conversions are ok I guess, but I want the simplicity that I have enjoyed with the Civic - one stop shopping and maintenance.
More about the next vehicle search in a future post.