As you know, we don’t usually deviate much from our core mission of covering cars and the car business here at Autosavant. But this morning, an article in the Wall Street Journal really caught my eye, and it’s about a railroad. Don’t worry, we’re not going to go all “Trainlopnik” on you, but there’s definitely a connection between this news and the auto industry, so bear with me for a few minutes while I explain.
BNSF Railway (which was formed by the merger of Burlington Northern and Santa Fe railways, and which is owned by Warren Buffett’s Berkshire Hathaway) told The Wall Street Journal that it is going to pilot a switch from diesel fuel to natural gas in a few of its locomotives. Why? Because natural gas is ridiculously cheap as a fuel right now, thanks to the natural gas glut we’re seeing in the U.S. these days. (That natural gas boom is expected to last three decades, according to the article linked in the last sentence.) We have more cheap gas these days thanks to new technologies such as hydraulic fracturing, or fracking, that injects water, sand, and chemicals into rocks to release gas. Fracking itself is extremely controversial (mainly due to the potential for groundwater contamination, which can’t be un-done if it happens), but it appears to be here to stay. Frankly, fracking is America’s best chance for greater energy independence than anything that has come before in the past five decades, and nuclear power is a non-starter for cost reasons (not to mention Fukushima in Japan, circa 2011).
Just how much cheaper is natural gas than the diesel fuel that powers on-board generators in diesel-electric locomotives? Diesel fuel used by railroads cost about $3.97 per gallon last year on average. The equivalent amount of energy from natural gas (sold at industrial prices that large railroads could take advantage of) would cost about 48 cents, or about 1/12. Railroads would be foolish not to consider taking advantage of the cost benefits of natural gas as a fuel, and particularly since most analysts believe that cheap natural gas is not a short-term phenomenon (remember the “decades” line a paragraph ago?)
Now, it’s not just a matter of BNSF’s CEO Matt Rose snapping his fingers and decreeing that his company’s 6,900 locomotives would now be powered by natural gas. Retrofitting a single locomotive and purchasing the required tank car (carrying natural gas, naturally) adds about 50 percent to a diesel locomotive’s approximate $2 million price tag. Then there’s the matter of infrastructure, which doesn’t really exist at this point for powering locomotives. The nice thing about natural gas, though, is that there is natural gas service in much of the United States already, so it may not be necessary to build a dedicated pipeline to a locomotive refueling station.
What would be necessary, however, is a method for cooling and liquefying the natural gas to -260 degrees Fahrenheit so that it can be loaded to the locomotive’s tank car and kept cold. A heat exchanger then converts the LNG to gaseous natural gas, which then is piped to the locomotive for its consumption. Liquefied natural gas (LNG) is extremely energy dense, much more so than diesel fuel. (It’s important to draw one distinction here; BNSF is proposing the use of liquefied natural gas to fuel its locomotives. In most current transportation applications of natural gas, it’s compressed natural gas. Special garbage trucks, city buses, the natural gas Honda Civic – those are all powered by CNG, not LNG.) LNG is five times more energy dense than CNG; you’ll note that the CNG Honda Civic has a per-tank range of approximately 220 miles, which is quite a bit less than the normal Civic’s 380-mile range. Plus, the regular Civic doesn’t have to sacrifice part of its luggage space).
Then there’s the matter of having locomotives that can actually burn the stuff to fuel their generators, which create the electricity that drives their huge traction motors. According to the WSJ, BNSF is actively working with locomotive manufacturers to develop a locomotive that can run on diesel and gas. Mr. Rose, the BNSF CEO, said that preliminary tests show that locomotives fueled by LNG can travel further on a gallon of fuel than their diesel counterparts, yet they have similar pulling power. Remember, diesel-electric (or LNG-electric) locomotives do not pull their train cars directly via internal combustion, but via strong traction motors that get their electricity from generators that are powered by burning fossil fuels.
Aside from fuel-cost considerations, a huge benefit for LNG-powered trains is that they typically run on predictable schedules between fixed points. There doesn’t have to be a LNG refueling stop everywhere, but only along the railway’s right of way, and they can be fairly far apart. Plus, having a train and all, an entire tender full of energy-dense fuel behind each locomotive would seem to need fewer refueling stops than a diesel-powered locomotive with only fuel underneath it in saddle tanks. That means fewer refueling depots are needed, making the infrastructure conversion simpler.
So finaly, how does this all relate to cars?
Locomotives use just 6 percent of the diesel fuel that the United States uses for transportation. Since there are so few diesel-powered cars here, that means that over the road trucks burn more diesel fuel in the U.S. than do any other category of diesel consumers. If railroads eventually do make the switch to natural gas, it could be the tipping point that makes truck companies consider using natural gas to fuel its fleets.
Railroads don’t really use enough diesel fuel by themselves to impact either diesel prices of natural gas prices, so it’s unlikely that diesel prices would fall dramatically even if they abandoned the fuel wholesale. (It’s also unlikely that railroad use of natural gas would drive that fuel’s cost up to a dramatically high level). But should truckers start abandoning diesel fuel in large numbers, that might have an impact on both diesel prices (lowering them) and on natural gas prices (raising them). There’s also the matter of nearly every industrial energy consumer reconsidering natural gas as a power source given its relative abundance and low price. Eventually demand will get closer to supply and natural gas will become more expensive. The U.S. has a lot of the stuff, but it’s not an unlimited supply.
This is something that we will be watching with interest over the next few years. If successful, it has the potential to bring down the cost of transportation and improve greenhouse-gas emissions. Those two would be wins for everyone.