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Rahm Emanuel Proposal

Update

I see from some of the comments following this story that my position needs to be clarified. There are several reasons that I think this is an important step forward. First, I have long advocated that we should use natural gas to directly fuel our vehicles instead of using the convoluted step of turning it into ethanol. Proponents of ethanol will often say “But there isn’t enough infrastructure.” This bill would help build out infrastructure.

Second, with respect to this simply trading out one fossil fuel for another. That is true, today. But it helps diversify our energy supply. Most importantly, though, is that it is much easier to produce biogas than to produce renewable liquid fuels. Therefore, natural gas has the potential to supply a significant portion of our renewable fuels.

Finally, natural gas vehicles burn much cleaner. All of these factors are what helped lead Brazil to build up a large fleet of natural gas vehicles (8 times the size of the U.S.). They certainly don’t use their natural gas for producing ethanol.

RR

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Representative Rahm Emanuel has proposed some very promising legislation. As a fan of natural gas vehicles, this legislation, while not perfect (I prefer incentives over mandates, and this may be a mandate) is a big step in the direction of actually addressing our energy problems. Press release in full below, and credit to a reader for calling it to my attention:

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EMANUEL ANNOUNCES NEW PROPOSAL TO INCREASE THE USE OF NATURAL GAS

Washington, D.C. – At a press conference in Chicago, Rep. Rahm Emanuel today announced plans to introduce legislation that will compel automakers to make 10 percent of their fleet vehicles that run on natural gas by the year 2018. Emanuel’s proposal also includes incentives and tax credits that will result in the addition of natural gas pumps at 20,000 fueling stations across the country. The legislation will be formally introduced later this week.

“This proposal is a hat trick for America: it’s good for our environment, good for our national security and good for drivers who are suffering at the pump. Natural gas is cheap, green and American-made and it’s time we encouraged the use of natural gas vehicles here in America,” said Emanuel. “American drivers should be able to buy a car that runs on a cleaner fuel that is currently half the cost of gas. Developing cars that run on natural gas and making it available at the gas station or at home will save money for consumers and help end our dependence on foreign oil.”

Emanuel’s legislation would compel automakers to make 10% of their fleet vehicles that run on natural gas by the year 2018. The bill would also offer new incentives to make natural gas more readily available for drivers and could enable the construction of natural gas pumps at 20,000 gas stations across the country. The legislation:

  • Offers a $90,000 tax credit to encourage gas station owners to install natural gas fuel pumps.
  • Provides $2.6 billion in bonding authority to states to provide no or low-interest loans to service stations to install natural gas pumps.
  • Requires the gas stations owned by the major oil companies to install at least one natural gas pump in each station by 2018.
  • Includes tax credits for drivers who convert their cars to allow them to run on natural gas and for those Americans who own home “Phill” units, a simple device that can be installed in a garage that allows drivers to use their home natural gas line to refuel their car.
  • Currently, natural gas costs about half of the price of gasoline and produces approximately one-third less emissions. Additionally, 98% of the natural gas Americans currently consume is produced in North America and current estimates indicate that America has a 118 year supply of natural gas.

    “The United States has abundant natural gas reserves,” added Emanuel. “It’s time to start making those reserves work for us.”

    American automakers have the technology to produce vehicles that run on natural gas. General Motors currently makes four different natural gas vehicles in Europe and Asia and Ford has previously built natural gas vehicles that were used in the House of Representatives.

    The Emanuel legislation would also create jobs and help offset recent declines in the SUV and light truck market. Estimates indicate that increased demand for natural gas powered vehicles and natural gas production could create 500,000 US energy industry jobs.

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    July 15, 2008 - Posted by | CNG, natural gas, Rahm Emanuel

    23 Comments

    1. This solution is so 15 years ago. I think it is the wrong direction for the future.

      A nat gas conversion requires a presssurized tank in the trunk of your car, competing for space with battery packs for PHEVs. Nat gas is less energy dense meaning less range. Any conversion limits your range to the nearest refuelling point. Each vehicle conversion is very expensive.

      A better approach is to mandate automakers to make flex fuel vehicles that can run on methanol, ethanol, gasoline or any combination of the 3. Energy companies can then use nat gas or coal to make methanol. Methanol would require a bit more care to ensure it doesn’t get into the groundwater, but it is certainly technically doable.

      Diesel engines could be dual fueled with DME once the lubrocity issue is solved.

      When the flex fuel fleet reaches a critical mass, refiners will begin producing and marketing fuel for them.

      Comment by KingofKaty | July 15, 2008

    2. How long would it take to fill the natural gas tank of one of these cars at a station? If it’s much longer than gasoline I’m no so sure the public will go for it. Honda has been selling a natural gas Civic for awhile now but I don’t think it’s really caught on. Part of the reason is probably because of the need to install a refueling station at home.

      Comment by Terry | July 15, 2008

    3. What is your take on the situation with our nat gas reserves? Things may look good at the moment, but given

      1)Increased powerplant demand as coal plants get virtually impossible to approve & nuclear plants probably stay that way
      2)Home heating conversion from oil to nat gas; probably some industrial conversions, too
      3)Expansion of nat gas use for process heat in ethanol plants
      4)Expanded nat gas demand for fertilizer

      …how long until we are talking about the natural gas shortage/crisis?

      Comment by David | July 15, 2008

    4. We need all of our natural gas to make ethanol.

      Comment by robert | July 15, 2008

    5. GM, clunky old GM, is making the Volt without any help, or tax breaks, or anything. They are going to try to seek help for carbuyers, but they have already developed the car w/o assurances of that.
      The market system seems to be migrating towards battery cars. There is no shortage of ways to make electricity — including natural gas.
      A Volt makes tons of sense. Why CNG, except for fleet vehicles?

      Comment by benny "peak demand" cole | July 15, 2008

    6. I agree with Benny – electric is the way to go.

      Besides, a nat gas converted ICE is still about 15% efficient. If I take that same nat gas and run it through a combined cycle gas turbine at 58% efficiency then to a PHEV at 90% efficiency I’ve more than doubled the overall thermal efficiency to the wheels, and produced less CO2 than burning it in an ICE.

      Comment by KingofKaty | July 15, 2008

    7. Am I dreaming or is this unreal?
      “it’s good for our environment, good for our national security and good for drivers who are suffering at the pump.”

      How is this good for the drivers?
      Crude and natural gas prices have historically followed a 6:1 ratio. Judging by that, one can say that natural gas is in for some steep price hikes.

      Comment by Pradeep | July 16, 2008

    8. Great idea- lets convert from one strained, non-renewable fossil fuel to another. If natural gas is so abundant, why is my gas bill always higher each winter?

      Comment by gc | July 16, 2008

    9. NG is a good interim solution for agriculture and heavy equipment, although going straight to electric (even lead acid batteries) would be more sensible. Cummins partnered with Westport and have production 200-300 hp engines which are suitable for buses, trucks, tractors, combines, etc.

      In the case of agriculture, most farm equipment doesn’t stray far from the yard, moves at less than 10 mpg and has added weight (for traction) that could be removed. Refueling or swapping tanks (or battery packs) isn’t an issue. Western Canadian farmers are used to dragging around 1000gal NH3 tanks, CNG wouldn’t be a big problem. The positives of compressed gas are that anaerobic methane or pyrolysis gas are relatively easy to produce on-farm and could be supplemented to purchased NG.

      It makes a lot more sense to convert shipping, rail, trucking, public transport, construction equipment and agriculture away from diesel (either electric or compressed gas) and then use the diesel in cars than to convert the automotive industry to a low density energy media (which currently includes all available batteries).

      Comment by Bob Rohatensky | July 16, 2008

    10. I agree with king, much better to convert the nat. gas to a liquid like MeOH, in that way you can also use coal to make the fuel. I think it fits in better with our existing infrastructure, the vehicle conversion is cheaper, and I think the engine is more efficient.

      I also have to mention that a super efficient modern steam engine would easily run on any fuel liquid or gas.

      Comment by dennis moore | July 16, 2008

    11. I don’t see how his proposal helps.

      (1) We are going to have the same problems with natural gas supply as with gasoline.

      (2) As with many other bright ideas, this addresses only the energy source to propel vehicles, not the energy for building vehicles, building and maintaining roads, etc. Local govts across the US are already cutting back on road maintenance. Will cars powered by natural gas or electricity fly over potholes and rivers?

      (3) It’s the same old paradigm: Instead of restructuring society to run on far less energy, the focus is on somehow scraping together enough energy to maintain an unsustainable system.

      Proposals like this are only going to aggravate the problem.

      Comment by Rice Farmer | July 16, 2008

    12. “It makes a lot more sense to convert shipping, rail, trucking, public transport, construction equipment and agriculture away from diesel”…makes sense for construction equipment, agriculture, and local transportation, IF we really believe that there is plenty of nat gas. Rail, maybe…stick a couple of tank cars of CNG behind the locomotive? Ocean shipping, though, is probably out of the question because of the tank volume that would be needed for long voyages.

      Comment by David | July 16, 2008

    13. GM, clunky old GM, is making the Volt without any help, or tax breaks, or anything. They are going to try to seek help for carbuyers

      Hah! Out of the goodness of their hearts? I think not. I haven’t verified it, but I suspect that everyone and his brother is trying to come out with a PHEV in 2010 because of some California emissions regulation that is supposed to come into effect… the one that the EPA rejected and which California and a dozen other states are suing the EPA about. The EPA may turn around when there’s a new president.

      It was a California regulation that made the EV-1 and the other EV cars come out in the 1990s. And it was the caving in of CA, (which backed off from the regulation) that resulted in all the car companies trying to get their EV cars back and crushing them.

      Also Lutz claims that they wouldn’t have pushed the Volt if it weren’t for the Tesla Roadster.

      But I agree, PHEVs seem to be the most promising choice right now. And I agree with all the comments on how natural gas supplies would be a problem. Boone T. Pickens wants to free up natural gas supplies for transportation fuel by reducing its use for electricity generation by building more wind turbines.

      Comment by clee | July 16, 2008

    14. I see from some of the comments that my position needs to be clarified. There are several reasons that I think this is an important step forward. First, I have long advocated that we should use natural gas to directly fuel our vehicles instead of using the convoluted step of turning it into ethanol. Proponents of ethanol will often say “But there isn’t enough infrastructure.” This bill would help build out infrastructure.

      Second, with respect to this simply trading out one fossil fuel for another. That is true, today. But it helps diversify our energy supply. Most importantly, though, is that it is much easier to produce biogas than to produce renewable liquid fuels. Therefore, natural gas has the potential to supply a significant portion of our renewable fuels.

      Finally, natural gas vehicles burn much cleaner. All of these factors are what helped lead Brazil to build up a large fleet of natural gas vehicles (8 times the size of the U.S.). They certainly don’t use their natural gas for producing ethanol.

      RR

      Comment by Robert Rapier | July 16, 2008

    15. Ocean shipping, though, is probably out of the question because of the tank volume …

      With the liquid natural gas shipments occurring now, I am going to bet that tankers full of LNG use traditional diesel engines, the “cargo” space would be actually be increased by converting the propulsion to LNG and freeing up the diesel storage.

      On anything that floats, pressure or cryogenic tank weight isn’t much of an issue and once you either pressurize or cool methane to a liquid the difference in energy density between one liquid fuel or another isn’t significant.

      The problem is the capital investment of existing diesel systems, not the feasibility of using and storing CNG/LNG.

      We have a CNG refueling station near my home and a couple of others in the province. The long refueling time and expense of conversion have meant that it hasn’t caught on much past SaskEnergy’s own local fleet and a few customers. There also was a large push to LPG conversions in the early ’90’s, and as soon as the demand for LPG went up, so did the price and it became unfeasible to do LPG conversions. I was talking about CNG conversions with a local delivery company owner and although $1.40/L diesel is killing his business, long refueling times for CNG (which he has to pay drivers for) and what happened to LPG price have made him very leery of converting or replacing his delivery fleet with CNG. This is in a city with CNG infrastructure in a province with large supplies of NG, a gas company that is willing to supply businesses with CNG refueling equipment at below cost and a business that is running diesel trucks within the city. It’s still a problem getting them interested in converting to CNG, mostly on the belief that as soon as there are any amount of CNG vehicles, the price is going to go up to parity with diesel and the refueling time is not worth the hassle.

      Comment by Bob Rohatensky | July 16, 2008

    16. Is the timing of the the “push” for the Pickens Plan and Emanuel’s NG legislation coincidental or intentional? Is there any connection between the two other than timing? It sounds like the Picken’s Plan is more aggressive than what Emanuel is proposing, but is that really the case (I know the Picken’s Plan is short on details). Thanks.

      Comment by Bryan | July 16, 2008

    17. With so many homes in the U.S. still heating with oil, I think we can find a better use for natural gas than putting it into car fuel tanks. Natural gas heating beats the pants off electric heat, whereas electric vehicles are much more competitive with internal combustion engines.

      Comment by jff | July 16, 2008

    18. Thank you for the update, Robert. I admit to being a little surprised that you were in favor of this proposal at first, but I wasn’t even thinking about things like biogas-versus-liquid fuels.

      I’m still a bit ambivalent on the proposal, but it makes quite a bit more sense to me now than it did at first.

      Comment by Sean Daugherty | July 16, 2008

    19. Using natural gas as a transportation fuel would dramatically drive up winter heating costs. It would also likely drive up summer electric bills in deregulated states where grid managers allow natural gas-generated power to set market prices. Near-month gas is trading on the NYMEX at just under $12 per million BTUs (c. 1 Mcf) today. (Electric utilities bought into gas turbines when gas was $2/Mcf) Winter gas prices are even higher. The EIA estimates winter residential gas prices at c. $17 per Mcf delivered. The idea is not even a reasonable short-term solution.

      Comment by John.Funk@Yahoo.com | July 16, 2008

    20. your readers, for the most part, might be amazed and shocked at the burgeoning nat gas use for transportation occuring in emerging nations/markets. many of these possess[as does the USA] significant stores of NG as well as sources for biogas[which can be used while significantly reducing wastes and pollution]. by transportation is meant surface transport[ auto, fleet[bus,taxi, long/short hauling, public utilities,e.g.].

      anyone looking for wide open stock/wealth opportunity[worldwide] should focus on this area.

      fran

      Comment by Anonymous | July 16, 2008

    21. Currently, natural gas costs about half of the price of gasoline…

      It sure won’t when 10% of our cars use NG. This is a great solution for countries with cheap, stranded NG. That’s not the US.

      CNG makes sense for fleet vehicles (buses, delivery trucks, etc.) which return to base each night. No refill issues, no infrastructure problems, lots more bang for the buck.

      Lawmakers should not pick the solution, they should create a level playing field for all comers. I prefer PHEVs but I don’t want to see PHEV-specific laws, either. Reward cars which burn domestic fuels, penalize cars which burn imported fuels. Base it on what they actually burn — i.e. minimal credit for E85 vehicles because they almost always fill up with E0-E10.

      Comment by doggydogworld | July 17, 2008

    22. Natural gas to ethanol is a very silly idea. Ethanol is good PR and Americans still don’t like diesel but GTL diesel makes more sense energetically, as the higher efficiency of diesel engines partially makes up for the losses in GTL conversion. But the GTL plants cost quite a bit of money and it takes time to get serious amounts of capacity online. In fact it would probably take as long as the extra NG infrastructure required when burning NG directly in vehicles.

      Comment by Cyril R | July 18, 2008

    23. clunky old GM, is making the Volt without any help, or tax breaks, or anything. They are going to try to seek help for carbuyers

      I found what the “anything” is. The California Air Resources Board.
      http://blog.wired.com/cars/2008/03/the-california.html
      The new guideline means the world’s biggest automakers must build a total of 7,500 electric and hydrogen fuel cell cars between 2012 and 2014….The new rules also require the auto industry to produce nearly 60,000 plug-in hybrids in that time frame.

      That’s why GM is pushing the Volt and other car companies are trying hard to build production PHEVs in a few years. It’s not altruism.

      Comment by clee | July 21, 2008


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