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April 02, 2011

Going Beyond the One third Reduction in Oil Imports

President Obama had a recent energy speech where he called for a reduction of US Oil imports by one third from the level of 2008 imports by 2025.

Oil imports in 2008 were 11.1 million barrels a day. The EIA (Energy Information Administration) reports that net imports for have averaged 9.0 MBD for the first two months of 2011 — and 8.9 MBD over the last 6 months. The US needs to get to 7.4 million barrels per day or less to achieve Obama’s goal.

The EIA weekly oil status reports are here The usage of oil below is a conversion of earlier EIA oil status from about 2006. The basic distribution of oil usage is broadly similar.

I agree with proposals to save 1.2 to 1.6 million barrels per day of oil with a prompt conversion of commercial trucking from oil to natural gas. The US now has more natural gas. Natural gas is used to power over 11 million cars already worldwide. It would be easier to convert enough refueling stations for commercial truckers to use and it would be easier and faster to mandate a conversion of commercial trucking. There would not be the issues involved in getting private buyers of cars to like vehicles with different power systems. For commercial trucking it is all about efficiency and costs.


Isuzu Truck Production in USA will include a Compress natural gas conversion-ready engine

Canada-based Westport Innovations believes U.S. truck operators and other big vehicles can cost-effectively transition to natural gas. Currently, 18-wheelers dominate goods transportation in the U.S.

Westport started by converting vehicles that refuel at a central depot, such as buses and garbage trucks, but now is expanding to highway trucks. Key hurdles remaining include the build-out of the natural gas refuel network to enable coast-to-coast refueling.

The price of diesel with play a large role in the popularity of natural gas fuel for trucks. Diesel under $2 per gallon discourages it, and above $2.50 or so, will encourage more conversions. So far, with oil prices high – they've been above $80 per barrel for months – despite modest demand, diesel's price is cooperating, with the average price for diesel up a whopping 96 cents, or 32%, in the past year, to $3.90 per gallon.

US Policy can be used to shift and accelerate this process.

Argonne National Laboratory, “Natural Gas Vehicles: Status, Barriers, and Opportunities,” August 2010

This study determined that the country could reduce its daily oil consumption by 8% if commercial intra-city heavy-duty trucks and a significant number off-road vehicles switched to natural gas. Under these projections, the country could that could reduce petroleum consumption by 1.2 million barrels a day, while another 400,000 barrels of oil reduction could be achieved with significant use of natural gas off-road vehicles.

Center for American Progress, “American Fuel: Developing Natural Gas for Heavy Vehicles,” April 14, 2010

Creating incentives to convert the nation’s heavy vehicle fleet to natural gas would reduce oil use, invest in American energy sources, increase our energy independence and national security, and slash air pollution, according to the conclusions of this report. The analysis, which is based on current fleet turnover rates for each class of vehicle, determines that deployment of 3.5 million of these natural gas vehicles by 2035 would save at least 1.2 million barrels of oil per day, which is more oil than the U.S. imported from Venezuela in 2009.

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