You may have realized that fuel prices lately, both unleaded and diesel, have seen a dramatic turn in price from the constant climbing of recent years past.  Two reasons for this are a rise in supply and declining demand for crude, as reported “This Week in Petroleum” from the U.S. Energy Information Administration.  I couldn't help but wonder, driving a CNG powered Freightliner Cascadia myself, if these alternative fuels that peopled first raised an eyebrow at are having an effect on the overall fuel market.  Being involved on the delivery end of intermodal rail loads, I was curious if the diesel powered freight trains that I rely on would ever find a need for utilizing alternative fuels to seek savings as well?
Without much effort, I was able to locate several other industries finding use for alternative fuels, including power generating facilities and large railroad companies.  Rail companies including Union Pacific, CSX, BNSF, and Canadian National are actually preparing to test engines this year that would burn both diesel and LNG, reported in The Christian Science Monitor.  They also report that part of this shift in thinking for most of these companies is the drastic reduction in natural gas price, due directly to the U.S. natural gas boom.  Prices are reported to be currently less than a third of their 2008 peak price.  Being domestically produced, it is also less vulnerable to price fluctuation than many other imported fuels.
Much like in trucking, railroad experts do not predict a coast-to-coast takeover of natural gas in their industry as a whole, but more so, a gain from using it in conjunction with existing diesel technology.  Switch locomotives that move railcars within rail yards and such could be dedicated LNG only, but the “Hybrid” LNG/diesel locomotives they foresee using nationwide could drastically reduce fuel costs.  In an industry that burns multiple billions of dollars a year in fuel, this could potentially result in a lot of money saved!  So, as natural gas becomes more abundant and easier to use, could a bigger impact be on the horizon for fuels such as gas and diesel?  As power generation plants, trains, and trucks make use of domestically produced natural gas more and more, could we see a bigger dip in price for our cars, trucks, SUV’s, and diesel-powered big trucks alike?  Only time will tell, but the future looks solid for natural gas and it is only growing by the day!

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Jimmy Nevarez

Jimmy Nevarez is the Owner/President of Angus Transportation, Inc., based in Chino, California.  Jimmy pulls a 53' dry van hauling general dry freight for his own small fleet, operating on its own authority throughout all of Southern California and Southern Nevada.

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The high cost of diesel has made innovation necessary and practical. The innovations, including more efficient use of diesel, has lowered the demand. Makes sense that the price would go down.

October 21, 2014 4:56:30 AM