Archive for Marcellus Shale News
PITTSBURGH, PA – The 3rd Annual Northeast Oil & Gas Awards Industry Summit is making final preparations for its highly anticipated event to be held at the Westin Convention Center on Penn Avenue in Pittsburgh.
Pennsylvania Independent Oil and Gas Association (PIOGA) President Louis D. D’Amico is this year’s guest of honor.
The event recognizes the outstanding achievements within the upstream and midstream sectors of the North American oil and gas industry. The awards are a platform for the industry to demonstrate and celebrate the advances made in the key areas of environment, efficiency, innovation, corporate social responsibility and health and safety.
Hundreds of companies submitted nominations for this year’s annual awards. Finalists were announced and notified in January, including publication in media partner Marcellus Business Central’s January edition.
Winners will receive new trophies – a one-third scale oil barrel in highly polished aluminum. Kerr Pumps & FlowValve designed and manufactured the trophies, which will be handed out to winners this year.
This year there are 25 categories:
- Award for Drilling Excellence
- Award for Excellence in Corporate Social Responsibility
- Award for Geophysical Excellence
- Award for Excellence in Health & Safety
- Award for Excellence in Well Completion
- Breitling Energy Future Industry Leader
- Construction Company of the Year
- Corporate Consultancy of the Year
- E&P Company of the Year
- Engineering Company of the Year
- General Industry Service Award
- Industry Leader
- Industry Supplier of the Year
- Law Firm of the Year
- Manufacturer of the Year
- Midstream Company of the Year
- New Technology Development of the Year
- Oilfield Services Company of the Year
- Operational Consultancy of the Year
- Recruitment Agency of the Year
- Risk Management Company of the Year
- The Oil & Gas Financial Journal Transaction of the Year
- Trucking Company of the Year
- VZ Environmental Award for Excellence in Environmental Stewardship
- Water Management Company of the Year
The Northeast Industry Summit will be held during the day, immediately before the awards gala dinner. The summit will provide an extended platform to deliver strategic and operational business insights that have clear commercial benefits, as well as an extended network opportunity. The summit builds on the significant success of the Oil & Gas Awards, a unique series that has become a must-attend industry event.
Keynotes and panel discussions include Health & Safety, Corporate Social Responsibility, Environmental Stewardship, Lawmaking Through Litigation and Innovation and Infrastructure Delays. The Industry Summit will ensure that attendees are kept abreast of what the leading companies in the Northeast are doing.
Click here to see a full list of award finalists.
John Quigley, acting secretary of the state Department of Environmental Protection, is making a clean sweep of his agency’s oil and gas technical advisory board. He’s replacing all of the board members and creating a second board to advise the department about regulations impacting conventional drilling.
Quigley, who was nominated by Governor Wolf to lead DEP, was secretary of the state Department of Conservation and Natural Resources from 2009 to 2011.
The new board, which is called the conventional oil and gas advisory committee, will consist of seven members: three appointed by the DEP secretary, one appointed by the DEP’s Citizens Advisory Council, and three members from conventional oil and gas operators.
The DEP is seeking nominations for the oil and gas technical advisory board, which includes engineers and geologists who represent the drilling industry, the coal mining industry and the general public. The five outgoing members of the board had served in their positions between seven and 26 years.
These changes came less than three weeks before the technical advisory board was scheduled to review the latest draft of wide-ranging changes to the state’s oil and gas regulations on March 5. The meeting was rescheduled for March 20. The draft of the final rules are informed by the DEP’s responses to thousands of comments submitted by the public on the new rules.
Quigley said the changes to the committees will help the technical advisory board give greater attention to shale gas drilling, which didn’t exist when the board was created in 1984. It will also strengthen participation and transparency in the state’s environmental regulatory process.
“We want to make sure that our stakeholders, which includes the regulated community, affected municipalities and environmental interests, are represented in a focused way for both conventional and unconventional development,” Quigley said.
The revisions to the state’s rules for oil and gas surface operations began long before the recent change in PA DEP’s leadership. On Dec. 14, 2013, Pennsylvania’s Environmental Quality Board proposed new regulations for surface activities related to oil and gas well development. Once finalized, these proposed regulations will set new requirements for oil and gas operations to ensure increased protection of public health, safety and the environment.
The proposals modify and update existing requirements to surface activities related to the development of oil and gas wells, including containment of regulated substances, waste disposal, site restoration, and reporting releases. In addition, the regulations establish new provisions for borrow pits, oil and gas gathering pipelines, identification of abandoned wells, and the road-spreading of brine.
These proposals also add new provisions for unconventional gas wells to help identify impacts to public resources, standards for freshwater and wastewater impoundments, well site containment systems, wastewater processing, and water management plans.
The new regulations will address some areas where the DEP was found to be lacking. In January 2013, Pennsylvania’s Auditor General Eugene DePasquale announced he would be conducting an investigation into the effectiveness of state regulators in overseeing the impacts from shale gas drilling. His year-and-a-half long investigation showed the state’s environmental regulators were remiss in at least eight major areas, including failing to cite drillers who broke the law.
DePasquale detailed the agency’s shortcomings in a 158-page report, which included the DEP’s use of a legal “loophole” to avoid inspecting wells. The report also described the agency’s failure to fulfill its duty to track the industry’s toxic waste and faulted the agency for a reliance on voluntary measures in policing the industry.
MONROEVILLE — The 2015 Tri-State Alternative Fuels Expo & Conference was held at the Monroeville Convention Center Feb. 24-26.
The event is an annual trade show, hosted by a team of industry advocates and professionals with a common goal of reducing foreign oil use.
The conference showcased exhibitors from not only the natural gas and propane industries but also all types of alternative fuels and energy companies. Educational seminars spanned the different types of alternative fuels and energy utilization, as well as live demonstrations and displays of alternative energy technology.
The 2015 Expo & Conference was themed “Success Stories” and featured large scale fleet operation examples of alternative fuel success.
Founder and managing partner of “O” Ring CNG Fuel Systems, L.P., Robert H. Beatty, Jr., said there were more than 100 exhibitors at the event.
Beatty is chairman of the Alternative Fueling Expo & Conference advisory board and was also a keynote speaker at this year’s conference. He spoke about the development of compressed natural gas (CNG) infrastructure, and how companies can gain a foothold in Pennsylvania.
Beatty’s company, “O” Ring CNG Fuel Systems, L.P., was also one of the event’s many exhibitors.
This year’s event featured a similar agenda as the previous year’s show, but featured more variety and changes in vendors.
Business owners, government officials and citizens attended and learn how using cleaner, local fuel sources can save consumers money at the gas pump. Attendees also heard first-hand from two companies as to how they implemented alternative fuels into their fleet operations and the significant financial impacts that have resulted.
Featured agenda items included a petroleum reduction technology followed by a “Building and Expanding the CNG Refueling Infrastructure in the Tri-State Area”; a presentation about the Marine Inland Waterway & Virtual Pipeline presented by David Kailbourne and a seminar about CNG truck choices, challenges and opportunities.The following day, events included a Department of Energy “A-Fleet” Program followed by “A CNG Success Story for Waste Management.”
Additional speakers also delivered keynote addresses during the event.
A study released last month by the outplacement firm of Challenger, Gray and Christmas showed the oil & gas industry lost 21,000 jobs in January. Field services companies, which support oil and gas field operations on a contractual basis, were hit particularly hard since demand for their services is solely based on oil and gas prices. The layoffs were the result of a precipitous drop in oil prices, which have fallen by over 60 percent because of a global glut in oil supplies.
Halliburton, a major oil services company, plans to cut 6,400 jobs, most of which will be in Canada. The Canadian Association of Oilwell Drilling Contractors forecast an average of 167 fewer active drilling rigs in Canada this year, resulting in 23,000 fewer direct and indirect jobs than last year.
Schlumberger, another major oil services company, announced it would lay off 9,000 workers. Baker Hughes said it planned to lay off 7,000 workers, and Weatherford International plans to cut 8,000 jobs this year.
“The impact will be felt across all areas of Halliburton’s operations, and we continue to make adjustments to our workforce based on current business conditions,” said Halliburton Spokesman Chevalier Mayes in Houston, Texas. “We value every employee we have, but unfortunately we’re faced with the difficult reality that reductions are necessary to work through this challenging market environment.”
Other major field services companies could also face layoffs, including China Oilfield Services, Nabors Industries, National Oilwell Varco, Saipem, and Transocean, a leading offshore drilling service company, which announced the shutdown or sale of 10 of its oil rigs last month.
Some major field services are oil and gas exploration, preparing wells for production, and maintaining and increasing the output of producing wells. Other services include: well surveying; cleaning out, bailing, and swabbing of wells; and operation of workover rigs, which are used to increase production.
The profitability of field services companies depends on technical expertise and efficiency of their operations. Some larger field service companies also manufacture oil and gas field equipment.
Smaller local and regional companies such as heavy equipment operators, electrical contractors and waste management firms also provide support for oil and gas operators. While large companies can offer a broad range of services, smaller firms can compete by specializing in a particular services or geographic areas.
Newalta Environmental Services is a field services firm company with two locations in – one in Montgomery, Lycoming County, which services operators in the Northern Tier, and one in Washington, Washington County, which services operators in western Pennsylvania, eastern Ohio and northern West Virginia.
Newalta workers maintain and repair the company’s field services equipment at yards in Montgomery and Washington and transport the equipment to the drill pads after the rig has been set up. Later, they manage the waste fluids used in drilling and the drill cuttings coming from the well.
“Our business in Pennsylvania has experienced some softening, but we’re already seeing additional activity picking up both in the dry and wet gas regions,” said Quay Schappell, northeast district manager at Newalta.
“Most of that is enhancing takeaway capacity – gathering lines and storage tanks – in preparation for transporting gas to the major transmission lines being built in the state.
“Our expectation is that over the next two to three years, as these transmission pipelines are connected to existing lines going to major markets, a lot of our customers’ wells that are now capped will be producing, and our Marcellus shale work will pick up again.
“Right now, most of our work is in wet gas play in eastern Ohio,” Schappell said.
Newalta also has oilfield operations in North Dakota, Texas and throughout Western Canada.
“A significant amount of the work we do in those oil plays is post-drilling. We recover the different waste streams from those oil plays, primarily sediment that accumulates at the bottom of storage tanks,” said Schappell. “We recover oil from what they consider waste, and we send the solids to a landfill and sell the oil we recover.
“The company has experienced a drop in our oilfield services work due to the low oil prices. It’s not detrimental at this point, but it’s lean and could worsen if the oil prices remain low.”
Oil prices have risen slightly in March due to a changeover to spring-mix gasoline, which costs more to produce than winter-mix.
K.C. Larson of Williamsport supports the gas companies at their home bases. The company was hired to do mechanical and electrical construction work for the buildings that gas companies bought or built when they first came to Pennsylvania. Now Larson is maintaining multiple systems in those buildings and adding improvements as needed.
The major trend Larson is seeing in the shale gas industry is operators learning to do more with less.
“They’re continuously focused on increasing efficiency, which means that field services companies have had to up their game to keep pace with the industry’s demand for greater efficiency,” said Keevin Larson, president of K.C. Larson.
The low price of natural gas is driving this trend.
“When you’re operating costs are fixed and the price you’re paid for natural gas drops or remains low, you’ve got to squeeze every bit of production from each well in order to remain profitable, otherwise, you’d have to cap the well,” Larson said.
“The oil and gas industry progresses step by step, but not always in sequence, sometimes one step gets ahead of the other and you end up what we have now, a glut of oil and Marcellus gas stored in tanks and gathering lines because there’s no way to get all of it to market until the Pennsylvania transmission pipeline system is completed.
“The U.S. is set up to import oil and liquid natural gas, not export them, but all that is about to change as the U.S. transitions from a major importer of energy to a major exporter.
“Things have progressed so quickly with the shale plays and fracking has become so efficient that the industry is now taking a breath and trying to catch up with itself, and unfortunately, there will be layoffs during this transition.”
Pennant Midstream has built a 55-mile wet gas gathering pipeline system in northeast Ohio and western Pennsylvania to transport the wet gas to the company’s Hickory Bend cryogenic natural gas processing plant in Springfield Township, Mahoning County.
The project, which began operation in August 2014, came at a $375 million price tag. The plant is capable of processing up to 200 MMcf/d (million cubic feet per day) of natural gas liquids. Hickory Bend has 15 employees, most of whom who were hired locally when the plant opened.
Gathering lines are small-diameter pipelines that move natural gas from the wellhead to the processing plant or to an interconnection with a larger gas transmission pipeline. The gathering pipeline is connected to a producing well, converging with pipes from other wells where the natural gas stream may go through an extraction process to remove water and other impurities. Natural gas that is being transported from the production field is referred to as “wet” natural gas if it still contains significant amounts of hydrocarbon liquids and contaminants or “dry” natural gas if gas is “pipeline quality.”
At this stage, the wet gas is a mixture of methane and other hydrocarbons plus some non-hydrocarbons co-existing in a gaseous state or in a solution with wet gas or crude oil. The chief hydrocarbons usually found in the natural gas mixture are methane, ethane, propane, butane and pentane. Typical non-hydrocarbon gases include water vapor, carbon dioxide, helium, hydrogen sulfide and nitrogen. At the cryogenic processing plant, hydrocarbons are separated from non-hydrocarbons using low temperature distillation.
For economic reasons, most cryogenic plants do not currently include fractionation, which is the breakdown of wet gas into its individual hydrocarbon components. Instead, the NGL stream is transported as a mixture to a fractionation plant often located near refineries or chemical plants that use the components for feedstock.
Columbia Midstream Group (CPG), a Columbia Gas affiliate, and Hilcorp Energy Company’s midstream affiliate, Harvest Pipeline, jointly own Pennant Midstream. CPG operates the Hickory Bend plant, while Hilcorp provides a large portion of the gas for processing. The wells feeding the plant are located in Lawrence and Mercer counties and the NGL pipeline goes to a plant in Kensington, Ohio to fractionate the gas and send the separated liquids to markets.
Hilcorp, founded in 1989, is one of the largest privately-held independent oil and natural gas exploration and production companies in the nation. Hilcorp has over 1,100 employees at operations across the United States including the gulf coast of Texas and Louisiana, Northeast U.S. and Alaska’s Cook Inlet. Hilcorp has continued to grow by actively acquiring and exploiting conventional assets while expanding its footprint into a number of new shale resource plays.
Columbia Midstream Group (formerly NiSource Midstream) was established in August 2010 to partner with producers in the Appalachian Basin and bring their supplies to market. Columbia Gas traces its roots to the mid-1800s when it began operating pipeline infrastructure throughout Pennsylvania, West Virginia and Ohio.
“We at Columbia Midstream are very happy with the success of the Hickory Bend Processing Plant, because it’s an excellent example of our company building the necessary infrastructure to support the phenomenal growth of the industry as a result of the Marcellus and Utica shale play development,” said Mike Huwar, Columbia Midstream’s vice president of marketing.
“We are also proud to be a part of the Springfield Township community. We see strong growth opportunities in the future to further develop gathering and processing of natural gas, which will further enhance the local economy in Mahoning County and beyond,” Huwar said.
PITTSBURGH, PA – Hart Energy hosted its largest audience for a midstream conference on Jan. 27-29 when the 2015 Marcellus-Utica Midstream conference and exhibition (MUM) came to town.
More than 2,100 individuals — a nearly 20 percent increase from last year – visited the David L. Lawrence Convention Center in Pittsburgh 29 to hear from midstream sector leaders.
“It’s been exciting to see six years of success for this conference focused on the Appalachian region,”
said Barry Haest, Hart Energy’s vice president of events. “Hart Energy will continue to provide value to
industry professionals who need current and accurate data, intelligence, and contacts.”
Spectra Energy Vice President Brian McKerlie told attendees the industry will create supply opportunities and demand will grow on its own.
Other enlightening speakers included EnLink Midstream President and CEO Barry Davis and Kinder Morgan Energy Partners Vice President Karen Kabin.
Davis, CEO of EnLink Midstream Partners LP, was the opening keynote speaker focusing on Appalachia’s Continuing Grown. EdLink Midsteam has an expanding presence in the Utica and Marcellus plays through its Ohio River Valley operations. Davis provided insights on what he sees ahead for the region.
John Kneiss, Director of Governmental Affairs at Stratas Advisors provided a Regulatory & Policy Update. With the congressional elections just completed and a presidential election next year, the industry’s regulatory environment is in flux. Attendees learned how the midstream sector will likely be affected.
Kabin, Vice President of Business Development at Kinder Morgan Energy Partners, L.P., reviewed the market for the region’s growing gas and gas liquids production—and Kinder Morgan’s own organic growth plans to connect producer and consumer.
Prospective attendees can mark their calendars for January 26-28, 2016 when the MUM conference and exhibition returns to the David L. Lawrence Convention Center.
Hart Energy will also offer the DUG East conference and exhibition in the same venue on June 23-25, 2015.
Every DUG event delivers a highly effective mix of data, insight and forecasts about financing, exploration, drilling, production, and delivery; presented by esteemed industry leaders.
Manufacturing in Pennsylvania continues to face tough challenges
On Jan. 15 and 16, Harry Moser, president of the Reshoring Initiative in Chicago, spoke for four hours at the Holiday Inn Express in State College about bringing back the manufacture of products to the United States. Moser’s visit was organized by Pittsburgh-based Catalyst Connection for the Northeast Pennsylvania Industrial Resource Center (IRC) in Wilkes-Barre.
He said he came to the state to train IRC members and economic developers to demonstrate how to work with area companies on how to identify where they are having problems with offshoring, such as quality and delivery.
Offshoring is a company’s relocation of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes like accounting. Reshoring is the return of those companies to the United States.
“I also came to help them find Pennsylvania suppliers who could provide better service, and in the case of energy intensive industries, to help them realize the cost savings of using natural gas in their manufacturing operations,” Moser said. “The ultimate goal is to get companies who offshore products to recognize that even though the price is higher here, the total cost of production might not be when they figure in all the relevant factors including the cost of energy, transportation, and securing their intellectual property.”
To assist companies with deciding whether or not reshoring is worthwhile or to use as a sales tool to convince customers to buy domestically, the Reshoring Initiative offers a free Total Cost of Ownership (TCO) estimator on its Website. User data suggests 25 percent of what has been offshored should return if companies use TCO instead of price for sourcing decisions.
The Website also has a reshoring library containing more than 1,400 related articles. The library can be used to identify companies and industries that are reshoring and to see which of a company’s competitors are reshoring and why.
Since January 2010, between 300 and 400 large companies have reshored at least some of their manufacturing operations to the nation, Moser said. Out of the 750,000 jobs gained in manufacturing since 2010, about 140,000 jobs were from reshoring. Sixty percent of those reshored jobs were from manufacturers that had moved to China.
Some of those manufacturers were companies that produce raw materials, OEMs and branded companies such as GM, Ford, Caterpillar, and GE.
For example, GE returned its Chinese-made water heater manufacturing to Kentucky, and Ford moved its Fusion auto manufacturing from Mexico to Detroit – resulting in 1,200 jobs.
Chrysler not only returned vehicles to the United States, but also its current marketing slogan: Imported from Detroit.
“There’s also foreign direct investments in U.S. manufacturers by international conglomerates, and they do it for the same reason as the American companies, because of rising wages overseas and higher transportation costs now make producing consumer goods near the customer and near the supply chain more appealing,” Moser explained. “Today, it gets hard to tell the difference between foreign direct investments and reshoring, they’re just different labels on the company.”
Foreign direct investment (FDI) in U.S. businesses reached $2.7 trillion at the end of 2012, which is equivalent to about 16 percent of U.S. gross domestic product. Last year, Chinese overseas investment in the U.S. and other countries surpassed foreign direct investment into China.
Moser also is willing to bet that thousands of suppliers are also coming back to the U.S.
“When you bring back and automobile or refrigerator, the manufacturer has to buy fabricated metal parts, pumps, wire harnesses and other parts,” said Moser. “Typically, though not always, when the assembly comes back onshore, so does the component sourcing.”
Nationwide, manufacturing added an average of 16,000 jobs per month in 2014, compared with an average gain of 7,000 jobs per month in 2013. Pennsylvania, however, lost 6,600 manufacturing jobs from January to November. According to the U.S. Department of Labor, Pennsylvania manufacturing gained 2,000 jobs in December.
“December’s numbers are hopefully a sign of recovery, and while cheap energy is a big draw to some manufacturers, the most important thing Pennsylvania needs to sustain growth is a better business climate,” said Tom Palisin, executive director of the Manufacturers’ Association of South Central Pennsylvania in York.
“I think the new governor and the state legislators should take a serious look at the tax structure and the regulatory structure in Pennsylvania and figure out how they can make our state more competitive, not only for manufacturers looking to reshore or expand into the state, but also for retaining manufacturing jobs already here that are in danger of being lost.
“Pennsylvania has the second highest corporate net income tax in the nation at 9.9 percent. So when you hear about the commonwealth falling near the bottom of the list of states in job growth, it’s not surprising.”
One challenge that the manufacturing sector faces is the general belief that the jobs are low-paying and menial.
“Skilled manufacturing technologists, especially those that have passed an apprenticeship, are extremely well-trained, work in their area of training and earn an income at least comparable to university graduates,” said Moser.
Another challenge Pennsylvania faces is the workforce for manufacturing is significantly older than the general workforce, with many baby boomers retiring.
“Boomers had delayed retiring because of the recession, but now they’re in a position to start retiring, and they will be difficult to replace because the younger labor force in Pennsylvania lacks higher skilled technical workers such as computer numeric controlled machine operators.
“To get a true picture of job growth in manufacturing, you can’t only look at the new jobs, but the backfilling of experienced workers that’s going to have a really big impact on manufacturing over the next 10 to 15 years as baby boomers retire.”
When EQT Corp. opened a public-access compressed natural gas (CNG) fueling station in Pittsburgh in July 2011, it was hoping to spark a revolution that would lead to greater energy independence for Americans.
The goal of the natural gas industry is to create “green corridors” for natural gas vehicles (NGVs), with one station placed about every 50 miles, or within two miles of designated highways.
With the assistance of a $700,000 grant from the state Department of Environmental Protection (DEP), EQT built the $2.3 million CNG station in Pittsburgh’s historic strip district, which is located near a number of fleets that could take advantage of the fuel savings offered by conversion to CNG.
“Building the station was about bringing supply and demand together, the so-called ‘chicken and egg problem’ by providing a test bed for companies looking to try CNG,” said David Ross, VP of Demand Development at EQT.
“It’s tough for most fleet owners to jump in with both feet, buy CNG trucks and install a private CNG station in the yard since it involves a considerable investment,” Ross continued. “We thought having a public-access station would help companies in the region try local compressed natural gas as an alternative to gasoline and diesel, and decide if they wanted to convert their fleet before committing themselves.”
According to a 2014 report published by the National Renewable Energy Laboratory for the U.S. Department of Energy, costs for installing a CNG fueling station can range near $2 million, depending on the size and application.
The first to use CNG at EQT’s station with a converted truck was a trucking company in the strip district. Today, that company is in the process of converting its entire fleet to CNG.
“Having a public-access CNG station, the company was able to try CNG on one of their trucks, figure out how it works in their operation, and then implement CNG into their fleet,” said Ross.
EQT expanded the station by adding two additional dispensers on another island to make it easier for larger vehicles to access the station.
“We had seen an increase in CNG fueling until more CNG stations opened in the region,” said Ross.
On July 14, 2011, Giant Eagle opened two CNG stations in Crafton, Allegheny County, to fuel 10 new CNG-equipped Giant Eagle delivery trucks.
In May 2013, the former Exxon station in Station Square became Pittsburgh’s second compressed natural gas station with the help of state funding.
On Sept. 9, 2013, Giant Eagle and Peoples Natural Gas partnered to open a CNG station at the GetGo station in Cranberry Township in Butler County on state Route 228.
In August 2013, Cabot Oil & Gas opened a CNG fueling station in Springville, Susquehanna County. Cabot is using the station to fuel its fleet of 60 CNG vehicles and to power equipment on their own development sites.
In October 2013, a CNG station opened a facility in Bentleyville, Washington County. The station was a joint venture between Washington-based Shale Hotels Inc. and Coolspring-based “O” Ring CNG Fuel Systems LP, which builds stations.
EQT is also fueling the revolution from the demand side by promoting the use of natural gas fleet vehicles, including its own, and now operates 15 percent of its light-duty vehicle fleet — about 180 vehicles — on natural gas.
“As our own transition continues, we are also working with other organizations to encourage infrastructure expansion so more new CNG fueling stations become available to fleets and the general public,” Ross said.
The national CNG revolution has just begun. Although 25 percent of America’s overall energy use comes from natural gas, less than 0.1 percent is currently used for transportation.
According to GE, only about 250,000 of the 15.2 million CNG vehicles worldwide are found in the nation, with 1,525 CNG stations nationwide. CNG vehicles and stations are commonplace in Iran, Pakistan and Argentina.
While the natural gas industry has been promoting compressed natural gas (CNG) and liquefied natural gas (LNG) as alternative fuels to gasoline and diesel, ethanol remains the most widely used alternative fuel in the U.S.
Regular gasoline contains as much as 10 percent ethanol. Because the ethanol molecule is bound to oxygen, it allows an automobile engine to combust fuel more efficiently, resulting in fewer emissions and higher octane.
“In years past, we had leaded gasoline, because lead was an octane booster, but after the US Environmental Protection Agency (EPA) determined that lead was bad for the environment, the government no longer permitted it, so gasoline blenders had to come up with a lead substitute to boost the octane,” said Kevin Baughman, plant manager at Pennsylvania Grain Processing LLC in Clearfield, which produces 10 million gallons of ethanol per year.
“Blenders tried a number of lead substitutes, one being MTBE or methyl tertiary-butyl ether, which also turned out to be unhealthy, but other substitutes were developed that were safe, the most economical of which was ethanol since it’s made from grains.”
Ethanol is produced from crops such as corn, grain sorghum, wheat, sugar and other agricultural feedstocks. In Brazil, the world’s top producer of ethanol, sugar is the primary feedstock.
Most fuel ethanol produced in the U.S. is derived from corn, which is what Pennsylvania Grain Processing uses to make its ethanol. The company buys corn from farmers in Pennsylvania, Ohio and Indiana. Nearly 40 percent of the U.S. corn crop is dedicated to ethanol production.
Since ethanol is produced from plants that harness the power of the sun, ethanol is considered a renewable energy. It also reduces the cost of gasoline. A recent Louisiana State University study found ethanol lowers gas prices by 78 cents per gallon, a consumer savings of more than $100 billion annually.
Ethanol fuel comes in a variety blends- E85, E30 and E15, but E85 is typically the ethanol content fuel used in flex fuel vehicles. It contains 85 ethanol and 15 gasoline. Although major automakers make flex fuel vehicles, they have never caught fire with buyers.
“Flex fuel vehicles don’t compete against natural gas or propane-powered vehicles, because you can’t run ethanol in a CNG- or LNG-powered engine,” said Baughman.
“The real competition is with gasoline, which is used along with ethanol. However, there’s been a lot of bad publicity about ethanol put out by the oil companies,” Baughman added. “They have released horror stories about how ethanol damaged marine engines or lawn mowers with corrosion, but they don’t talk about how E85 can be safely used in flex fuel vehicles, because they are afraid of the competition.
“The other obstacle is that distributors of E85 have charged consumers too much for the fuel, which could be priced more competitively against gasoline.”
According to Baughman, the biggest challenge in getting more ethanol fuel used in the U.S. is providing accurate information to the public explaining that E85 is available, safe, economical and good for the environment.
According to Energy Growth, an ethanol advocacy organization, the production and use of more than 13 billion gallons of ethanol per year in gasoline reduces greenhouse gas emissions by 38 million metric tons, the equivalent of removing roughly 8 million automobiles from the road. E85 fuel decreases greenhouse gas emissions by up to 57 percent compared to gasoline.
“Although oil prices are low right now, when Europe pulls out of its downturn and China resumes full production of consumer goods, demand for oil will increase again and prices will be back up to where they were, if not higher,” said Baughman.
“Given the highly volatile situation in the Middle East, independence from foreign oil is more important than ever, so the more alternative fuel vehicles operating in the U.S., the better.”
The 2015 Tri-State Alternative Fuels Expo & Conference will be held at the Monroeville Convention Center Feb. 24-26.
Beatty is chairman of the Alternative Fueling Expo & Conference advisory board and is also a keynote speaker at this year’s conference. He will be speaking about the development of compressed natural gas (CNG) infrastructure, and how companies can gain a foothold in Pennsylvania.
“O” Ring CNG Fuel Systems, L.P. is one of the event’s many exhibitors.
“We’re anticipating a good crowd,” Beatty said. “Our inaugural show was pretty good, and we have the same type of agenda as last year, but with a little more variety and some changes in vendors.”
Business owners, government officials and citizens are welcome to attend and learn how using cleaner, local fuel sources can save consumers money at the gas pump.
The event begins on Tuesday evening with a job fair starting at 4 p.m. and a Casino Night entertainment beginning at 5:30 p.m.
On Wednesday, a petroleum reduction technology class will be held at 8:30 p.m., followed by a “Building and Expanding the CNG Refueling Infrastructure in the Tri-State Area” at 1 p.m., a presentation about the Marine Inland Waterway & Virtual Pipeline by David Kailbourne at 2:15 p.m. and a seminar about CNG truck choices, challenges and opportunities at 3:30 p.m.
Friday’s events include a Department of Energy “A-Fleet” Program at 8:30 a.m. followed by “A CNG Success Story for Waste Management at 10:45 a.m.
Various speakers are scheduled to deliver keynote addresses during the event as well.
For more information, or to register online, go to www.alternativefuelingexpo.com. Beatty said admission can also be obtained at the conference.