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By Robert Rapier on Sep 13, 2012 with 27 responses

Mitigating the Long Recession; and CNG Vehicle Restrictions

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In this week’s episode of R-Squared Energy TV, I answer two viewer questions. The first question is whether I believe that nuclear energy or hydraulic fracturing will offset the impacts of my “Long Recession” scenario. The second is about the EPA licensing requirements for compressed natural gas (CNG) vehicles, and whether the EPA might relax those restrictions.

To answer the second question, I consulted with Marc Rauch at The Auto Channel, who first tipped me off to the expensive EPA licensing requirements. See Behind the Costs of CNG Conversions for additional details.

Readers who have specific questions can send them to ask [at] consumerenergyreport [dot] com or leave the question after this post (at the original source). Consider subscribing to our YouTube channel where you’ll be able to view past and future videos.

Link to Original Article: The Long Recession and CNG Vehicles

By Robert Rapier

  1. By Ed Reid on September 13, 2012 at 9:34 am

    Robert,

    It is important, in this discussion, to distinguish between: “purpose-built” CNG vehicles and “converted” CNG vehicles; dedicated CNG vehicles and bi-fuel (CNG or gasoline); and, dual-fuel (CNG + Diesel).

    Virtually all light-duty conversion vehicles were designed and EPA certified as gasoline vehicles. The conversion process typically does not change the engine compression ratio because: it is time consuming and expensive; and, the vehicle must still run on gasoline and, in many states, pass annual emissions tests on gasoline. In the case of virtually all spark ignited engines, this means that the compression ration of the engine in the converted vehicle is sub-optimal for CNG, which has a higher octane number than gasoline. Conversion also adds considerable weight to the vehicle, since the gasoline tank remains and the CNG cylinders are added.

    Dedicated, purpose-built CNG vehicles can be equipped with higher compression ratio engines, to take advantage of the higher octane rating of CNG. The space required for the gasoline tank can be used to accommodate the CNG cylinders. Vehicle emissions can then be optimized for CNG.

    Diesel/CNG vehicles typically operate in dual-fuel mode, using a varying pilot charge of diesel fuel, since CNG cannot reliably be compression ignited over the typical range of vehicle operating conditions. Dual-fuel operation allows the higher engine compression ratio of the typical Diesel engine to be retained, along with its higher efficiency. The volume of Diesel fuel carried on the vehicle can be reduced by ~80-90%, freeing space for the CNG cylinders and reducing finished vehicle weight.

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  2. By mac on September 13, 2012 at 7:36 pm

    The Long Recession ? 

    The U.S. is 16 Trillion dollars in debt, more than than the net worth of all U.S. assets.(estimated at a little over 11 Trillion.)

     

    While expensive energy prices (i.e. crude oil) is certainly an inflationary factor, the real reason the U.S. and the EU are in bad shape is due to over-borrowing to fund legacy obligations to constituents who were promised generous pensions, medical care. etc.

    U.S. T-Bills are in essence Bonds issued and sold by the Treasury, (and similarly, the various debt instruments issued by the EU member states)

    Out in California, they are cutting back and trimming legacy pensions for government workers.  Nothing to do with the price of gasoline or crude oil………………

    Agreed……………. High crude and/or energy prices aggravate governmental revenue shortfalls because increases in energy prices reverberate throughout the economy and tend to be inflationary, since they take an increasing bite into Americans disposable income.

    The problem in Europe  and the U.S.,  however, is basically due to over-spending and issuing debt instruments to cover  treasury shortfalls and  is not  solely due to high energy prices.

    Mac

     

     

     

     

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  3. By mac on September 13, 2012 at 8:08 pm

    If someone wants to adopt alternatives to oil, perhaps CNG is an alternative to the gasoline/diesel only paradigm.  Does politics enter here ?

    The grievous requirements for CNG vehicles is hard to understand.

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  4. By Ben on September 14, 2012 at 5:03 am

    Thanks for the brief tutorial, Ed Reid.  You put it succinctly and without an apprarent bias pro or con re: CNG–definitely the sign of a real professional.  

    It strikes me that the extra tank issue may be as much about the modalities involving available space as it is about the extra weight.  On larger vehicles such as trucks/buses this appears much less problematic than with autos.   One can appreciate how this is particularly true as it relates to conversions vis-a-vis the design accomodations on new hybrid or CNG vehicles.   

    Regardless of the tank issue and  the need for improved design sensibilities, the future of CNG for the mass consumer market will largely rise or fall on regional, if not national, commitments to fueling infrastructure.  Such commitements impact the availability of  dependable supply even if dependable prices remain a bit more elusive.  On that note, welcome to the world of high-grade transportation fuels, eh:)  One things for certain, the issue of CNG conversions are not about to go away.  A well-placed friend in the transportation industry shared with me third-party analysis pointing to the likelihood of 10MM CNG vehicles by 2016.   While that is admittedly only  small slice of the pie,  it’s presumably enough to justify a good measure of investment in the required refueling infrastructure and several companies are stepping up on that note.   This brings to mind a line from the 1996 election about macroeconomic policy and taking some liberty to paraphrase, “It’s the pumps, stupid.”  Yeah, I guess it really does come down to fuel in the tank to make the engines go–at least for now:)  

    Thanks,  Ben

     

     

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    • By Ed Reid on September 14, 2012 at 3:40 pm

      Ben,

      First, thank you.

      Actually, the fuel storage issue affects vehicles of all sizes, because the larger vehicles get far lower fuel economy. For instance, fuel storage for a 40′ Flxible CNG transit bus operating continuously in a city of 600,000 for a full day without refueling required 6 fuel cylinders ~16″ D x 7′ L, which occupied virtually all of the available space under the floor of the bus between the wheels. Similarly, a long haul tractor/trailer rig would require similar cylinders stacked 2 front to back and 3 high behind the cab or 6 cylinders under the trailer to achieve the same range as the Diesel fueled version.These estimates assume the use of 3,600 psi cylinders with PET liners and a fiberglass/epoxy overwrap.

      Another issue to consider is the variability of the composition of natural gas in various parts of the country. For example, some natural gas is virtually 100% methane, while other natural gases contain less methane and more heavier hydrocarbons. The variation in Btu content can approach 40% in some cases. Also, some utilities blend mixtures of refinery off-gases with landfill gas to produce a mixed gas with the same Wobbe number as typical natural gas, but a very different chemical composition and octane number. I do not know the extent to which modern, electronically controlled Otto cycle engines could adapt to these changes and avoid engine knock under high loads. This issue should be of less concern in dual-fuel Diesel engines.

      I would guess that most of the early CNG vehicles would be in fleet applications, with refueling facilities at the vehicles’ bases of operation. That has been the case with transit buses and airport shuttle buses, as well as with utility fleets.

       

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  5. By Warren Stephens on September 16, 2012 at 10:32 am

    Where is the link about electric vehicles in California “scamming” the public?  Or was that just a side-comment by the auto channel (?) to the CNG article somehow?

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  6. By Robert Rapier on September 16, 2012 at 2:14 pm

    Where is the link about electric vehicles in California “scamming” the public?

    If that is something that was said by The Auto Channel, I didn’t see it so I can’t comment. Not sure of the context.

    RR

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    • By Warren Stephens on September 17, 2012 at 10:58 am

      Your quoting them at the 6:18 mark of your video.  CARB is “scamming” the public by pushing EVs…

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      • By Robert Rapier on September 17, 2012 at 1:10 pm

        Your quoting them at the 6:18 mark of your video.  CARB is “scamming” the public by pushing EVs…

        Ah, OK. I don’t have any more context than what was in the comment that I read.

        RR

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  7. By ben on September 17, 2012 at 12:01 pm

    Mr. Reid,

    Initial CNG deployment is logically in the fleets where capital recovery is optimal.  One can see the reconfiguration (storage) in new freight/mass transit vehicles achieving utilitarian requirements without loss of design aesthetics and minimal impact on aerodynamics.  I expect we will be seeing the same with POVs.  Investments in fueling infrastructure is the harbinger of what will follow and, on that note, we are beginning to see some indications that a trend is beginning  to emerge–not unlike detecting a large wave offshore well ahead of any whitecaps close to the shoreline.   To the extent that blog readers are proponents of greater energy security, some attention to additional advocacy of flex-fueling will likely pay social benefits as a complement to financial rewards for getting the waxed board out in the deep water early on in transition to more diversified fuels.

    Again, thanks for the insights and interest.

    Ben

     

     

     

     

     

     

     

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  8. By mac on September 17, 2012 at 2:55 pm

    It’s amazing.  The Chinese can pay upwards of $100/bbl for oil and still prosper at CAGR growth rate of about 8%.

    How can this be ?  While the West (Europe and the U.S. are in recession ?)

    Obviously.  there is more to all this than high crude oil prices……

     

    How can China and India advance with these high oil prices while the West languishes ?

    Once again, there is much more to it than just high crude oil prices….

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  9. By Robert Rapier on September 17, 2012 at 3:30 pm

    How can China and India advance with these high oil prices while the West languishes ?

    That’s easy. They use 1 or 2 barrels per person per year, and we use over 20. So high oil prices impact us much more than they do them.

    RR

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  10. By mac on September 17, 2012 at 4:07 pm

    Why are India and China prospering despite high oil prices ?

    (while the West is supposedly in the doldrums, with $100 OIL)  ?

    Simple… a cheap labor pool where manufactured goods can be produced for pennies on the U.S. or EU dollar.  (And this very much includes IT and high tech stuff)

    Our wonderful “American Entrepeneurs” (our college trained,. MBA,  bean counters, can simply  move manufacturing technology to China/India. etc. ) literally selling out hard won U.S. R&D  and American jobs to Asia, etc.

     

    They are not true entrepeneurs at all,  just selfish opportunists.

    It;s not to hard to figure out… The managerial (import) class gets fat bonuses as manufacturing flees the U.S. as imports climb and so-called “patriotic ” U.S. businesses move off-shore.  The managerial class are not entrepeneurs.  They create nothing. They are basically worthless and one of their main functions is to ship U.S. and EU jobs over-seas.

     

    Not too hard to figure out really………..

     

     

     

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  11. By Ben on September 17, 2012 at 6:53 pm

    Mac

    While I share the frustration, I find your lament an over-simplification on the dynamics of the American free trade policies against the backdrop of a global economy.  We can pretend this is the early part of the 2oth century, but we would be ignoring the major events/developments of the past few decades.  American hegemony, at least in the mid-to-late 2oth century use of term,speaks to a bygone era.  We may be in the earliest stages of a “new normal” that some attribute, at least in some measure, to the ramifications of Peak Oil–and all that goes with it.   

    The author of this blog speaks of the Long Recession that reflects genuine concerns for the challenges that necessarily attend the need for readily available, affordable energy supplies to fuel economic growth, create much-needed jobs and otherwise promote improvements in standards of living.   We can argue ’til the cows come home on various measurements of “economic progress” and how that squaures with our views about the essentiality of manufacturing  jobs in an increasingly IT and service sector-oriented economy.   Regardless of where we come down on the issue, most of those “blue Collar” jobs from the old economy are lost to the emerging markets who, in turn, will lose them in due course to other emerging nations; as a case in point, I read with interest, this past week, about the wholesale loss of jobs by Pakistan to Bangladesh). 

    There is much to conern ourselves about in this era of limitations.  Affordable sources of energy are no small part to be sure.  Yet, we have always faced limits and we have hustled with a good dose of Yankee ingenuity to find new ways to solve old challenges.  I’m betting that we will do so again albeit in novel ways that we are yet to fully comprehend.

    Thanks for giving some of this the benefit of the doubt.

    Ben

      

     

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  12. By mac on September 18, 2012 at 4:27 pm

    Robert

    Since China has approximately 4  times the U.S. population, the total OVER-ALL consumption of oil in China is 8 barrels a year versus 20 barrels in the U.S.,  using a 2 barrel per capita benchmark consumption statistic for China.

    China is using lots of oil.

    In 2011,  China sold 18.5 million gasoline powered vehicles.  In 2011 the U,S. domestic market sold  12.42 million.  The world’s single largest auto market is China.

    You must look at overall consumption, not just per capita consumption.

    It’s appx. 8 barrels in China versus 20 plus barrels in the U.S.  with demand growing rapidly.in China.

    ————————————————————————————————————–

     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     

     

    The EU prospered for decades with artificially high oil prices (due to taxation) and now you are telling me that high oil prices cause recessions ?  If high oil prices cause recessions, then Europe should have been in continual Recession for the last 30 years or more.

    Obviously, there are other factors at work.

    Mac

     

     

     

     

     

     

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    • By Robert Rapier on September 18, 2012 at 7:05 pm

      Since China has approximately 4  times the U.S. population, the total OVER-ALL consumption of oil in China is 8 barrels a year versus 20 barrels in the U.S.,  using a 2 barrel per capita benchmark consumption statistic for China.

      That doesn’t make any sense. Per capita means per person. So 8 barrels per year is meaningless. If you want to say that China uses a lot of oil — indeed they do. But each person doesn’t use much, and that’s why it hasn’t hit them as hard. It takes a smaller chunk out of each person’s budget. As a whole, they are competing on the world market and helping keep oil prices up, but the entire country still uses less oil than the U.S.

      It matters a great deal whether people’s use of oil is low and for very basic necessities, or whether it is excessive and frequently wasteful. The latter situation will likely see oil consumption fall when prices rise, but the former won’t necessarily.

      RR

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  13. By mac on September 19, 2012 at 7:37 pm

    Nation A has 100 inhabitants and uses 2 barrels of oil per person annually or 200 barrels

    (100 times 2 equals 200 bbl).

    Nation B uses only half as much oil per inhabitant, or just 1 barrel.  But there are 200 inhabitants in nation B.

    (200 times 1 bbl equals 200 bbl total yearly consumption)

    Therefore, nation-wide or over-all oil consumption is exactly the same  for both nation A and Nation B.————-200 bbl per year

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  14. By Robert Rapier on September 19, 2012 at 7:45 pm

    Therefore, nation-wide or over-all oil consumption is exactly the same  for both nation A and Nation B.————-200 bbl per year

    Yeah, I got that part. It’s not that hard to understand. But it matters how many people are in each nation, hence our usage of per capita numbers. And per capita numbers only make sense on a per person basis. If one country has 4 times the population of the other, you don’t multiply the per capita numbers by 4.

    But the per capita numbers are what tells you why high oil prices have hurt some countries more than others. In the West, we have fat that we can cut, and hence our consumption goes down when oil prices rise. They have no fat to cut. Their consumption numbers are already very low, hence it can grow even at high oil prices.

    RR

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  15. By mac on September 19, 2012 at 7:51 pm

    Once again, if high oil prices cause recessions, then Europe would have been in continuous recession for the last 3 or 4 decades because of high oil prices, since they have some of the highest oil prices in the world.

    Oddly enough, the U.S, ships more freight by rail than Europe.  A larger percentage of freight is shipped by truck in Europe than in the U.S.

    Obviously there is more to it than just high oil prices.

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  16. By Robert Rapier on September 19, 2012 at 8:05 pm

    Once again, if high oil prices cause recessions, then Europe would have been in continuous recession for the last 3 or 4 decades because of high oil prices, since they have some of the highest oil prices in the world.

    Two things. First, their per capita consumption is about half of ours, so high oil prices have less impact on them. But second, it isn’t simply high oil prices, it is rapidly climbing oil prices. If oil prices go smoothly to $200/bbl over the next 5 years, then we will adjust. If they hover around $100 for 4 years and then shoot to $200, the odds of recession will be much higher. 

    Nobody ever said that it was only oil prices that caused recession. But historically recessions have followed oil price spikes. There are numerous examples of this.

    RR

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  17. By mac on September 19, 2012 at 8:26 pm

    If one country has 4 times the population of the other, you don’t multiply the per capita numbers by 4.

    You do if you are looking at total oil consumption………………

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  18. By mac on September 19, 2012 at 8:41 pm

    Nobody ever said that it was only oil prices that caused recession. But historically recessions have followed oil price spikes. There are numerous examples of this.

    ==========================

    Prior to WWII there isn’t as much correlation between high oil prices and commodity induced price recessions.  Oil was cheap up until about the year 2000 when I drove through Bakersfield, CA and bought gas at .99 cents a gallon.  Prior to the year 2000, evidence that high gas prices cause recesions is scant,

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  19. By mac on September 19, 2012 at 9:30 pm

    Oil prices have less impact on the Chinese than the U.S. ?

     

    Whoa, wait a minute…………………..auto sales in China were 17.5 million last year, the world’s largest single auto market.  Will they hit 20 million this year ?

    Of course, the Chinese just buy cars for “status reasons”

    They don’t actually use them.  They just park them in their garages.

     

    OOOppps ???  What about the recent 186 mile traffic jam leading into Beijing ?

     

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  20. By Robert Rapier on September 19, 2012 at 9:41 pm

    Oil prices have less impact on the Chinese than the U.S. ?

    Of course. Because each person uses less. They don’t drive as many miles and on average drive more fuel efficient cars. That’s why their consumption was able to grow even when oil prices were $100/bbl, and ours fell.

    RR

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  21. By mac on September 19, 2012 at 11:15 pm

    Robert said:

    It matters a great deal whether people’s use of oil is low and for very basic necessities, or whether it is excessive and frequently wasteful.-

    ————————-

    The majority of auto sales in China in 2011 were not trucks or buses,  but passenger vehicles.

    What ???

    The Chinese can’t ride bikes or walk to work like they used to ????

    No, not any more…………….why should they ?  when they have all that income from exports to the U.S. and interest on U.S. issued deficit financed T-Bills.

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  22. By mac on September 19, 2012 at 11:26 pm

    “They don’t drive as many miles and on average drive more fuel efficient cars.”  says Robert.

    ————————————————————————

    The fact is that most of the automobiles sold in China (17..5 million last year) are imports from Europe and the U.S. and Japan.

    No super-duper, miraculous, mysterious, mystical 100 mpg Chinese vehicles involved. Basically the same vehicles that are sold in the EU, U.S., and Japan.

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  23. By Robert Rapier on September 19, 2012 at 11:32 pm

    No super-duper, miraculous, mysterious, mystical 100 mpg Chinese vehicles involved. Basically the same vehicles that are sold in the EU, U.S., and Japan.

    This seems to be kind of a pointless argument, but China’s average fuel economy for their fleet is significantly ahead of that of the U.S.

    RR

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