World Grain - February 2013 - 105

FEATURE: FUTURE OF FUELS FOR U.S. FREIGHT TRANSPORT

NATURAL GAS
Natural gas (NG) consists of 90%
methane. It originated from the remains
of historic plants and animals and was
formed by the great pressure exerted
over centuries by the thousands of feet
of rock, sand and debris covering the
plant and animal remains. Recently,
large quantities of NG have been found
in shale formations.
In 2010, the United States had proven
NG reserves of 317 trillion cubic feet
(tcf). The 2011 production of NG was 24
tcf. At that level of production, the 317
tcf would only last 13 years. The good
news is that the U.S. has huge quantities
of unproven NG reserves locked deep in
shale formations. EIA estimates that, as
of Jan. 1, 2010, the total NG reserves in
the United States were 2,203 tcf. At the
2011 level of production, that would be
more than a 92-year supply. Some observers suggest that the EIA estimate of
unproven reserves is too low.
The huge unproven reserves of NG
have been made available to U.S. markets by hydraulic fracturing, commonly
called fracking. Fracking pumps more
than 1 million gallons of water, chemicals and sand under high pressure into
each well. These wells vary in depth,
but can be as deep as 10,000 feet. After

reaching the desired depth, the drilling
extends horizontally across the shale
formation. The high pressure of injected
water, chemicals and sand fractures the
shale formations, and allows the NG
and other hydrocarbons that exist there,
to escape the shale and ﬂow up the well.
The major advantages of NG over
diesel are its low price and huge supplies. Its major disadvantages are that
it is a gas, not a liquid and it has low
energy density. It must be converted
into “compressed NG” (CNG) and
“liqueﬁed NG” (LNG) before it can be
used by trucks and railroads. CNG is
NG under pressure of 3,000 to 3,600
pounds per square inch. LNG is NG
that has been cooled to -260 degrees F.
At that temperature, it changes from a
gas to a liquid that is 1/600th of its original volume. CNG is less expensive to
produce and store than LNG, because it
does not require expensive cooling and
cryogenic tanks. Other than biodiesel,
NG is the only near-term alternative to
diesel fuel for trucks.
SYNTHETIC DIESEL FUEL
Diesel fuel can be produced synthetically from NG, coal and biomass.
Biomass includes crop residues, grasses
and wood products. The United States

has huge quantities of biomass and coal.
Synthetic diesel fuels require no modiﬁcations to existing engines. They can
be mixed with and actually improve the
quality of petroleum diesel. They are
liquids and can be distributed through
the existing diesel distribution system.
However, they are likely to cost more
than diesel fuel and they have poor lubricity and cold ﬂow properties.
In September 2012, Texas-based
KiOR completed construction of a plant
in Columbus, Mississippi, U.S. that will
use fast pyrolysis to produce synthetic
gasoline and diesel fuels from biomass.
The initial production began on Nov. 8,
2012. Its preferred feedstock is southern
yellow pine wood chips.
The demand for KiOR’s products, beyond the EPA, state and city mandates,
will depend on their selling prices. If
their diesel price is equal to or exceeds
the price of petroleum diesel, truckers
and railroads are unlikely to purchase
quantities above the mandated amounts.
The price of their non-mandated synthetic diesel will need to be less than the
price of petroleum diesel, because KiOR
states that its fuels will be 1.7 GEE (gallons ethanol equivalent). Assuming
76,000 Btu per gallon of ethanol, 1.7
GEE converts to 129,200 Btu per gal-

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