Next Energy Revolution Will Be on Roads and Railroads

Locomotives powered by liquefied natural gas (LNG) have been tested for BNSF Railway at a private facility as the company takes the next step in a pilot program that could eventually transform the railroad industry and lead to the next phase of the North American energy revolution.

People have been forecasting for several years that gas will become the transport fuel of the future; now experiments by BNSF are starting to make it a reality.

The financial incentive to switch is enormous, and the companies involved in testing LNG are among the biggest and most influential in the rail industry, with the engineering expertise and financial resources to make the change happen.

The commodity cost of natural gas is around one-fifth that of diesel on an energy-equivalent basis, thanks to the shale boom, and the gap shows no sign of closing.

Even after the costs of transportation, liquefaction and dispensing are factored in, LNG is around one-third cheaper than diesel, according to indicative prices provided by Clean Energy, the largest supplier of natural gas for transportation in North America (Introduction to Clean Energy Fuels June 2014).

The cost advantage could be greater in future if demand for LNG as a transport fuel expands and the industry is able to achieve bigger economies of scale.

Next Energy Revolution Will Be on Roads and Railroads