With Recent Abundance of Natural Gas, GP Strategies Helps Navigate New Industry Terrain - $GPX

With Recent Abundance of Natural Gas, GP Strategies Helps Navigate New Industry Terrain - $GPX

The rising cost of energy is on everyone’s minds these days, from individual consumers to large companies. To bring down prices and work towards US energy independence, alternative energy sources are being researched and a variety of initiatives are in the works. However, in the ongoing quest for US energy independence, one development stands out above all others: shale gale, or technology’s advancing ability to release trillions of cubic feet of natural gas trapped in underground US shale formations. With this discovery, many experts believe that we’re set for fuel for the next 100 years. While this is obviously a phenomenal advancement, there is still a lot of work to be done to modify the economic and social infrastructure of existing industries so that they can run on natural gas. 

Liquefied natural gas, or LNG, represents one important step along the way. LNG is natural gas that has been condensed to liquid form so that it can be more easily stored and transported. It requires the construction of storage facilities, pipelines and filling stations to get it from the ground to consumers. However, given the newness of natural gas in this abundance, a sizable gap remains between the sheer amount of the resource and consumer demand for it.

A recent article in Fortune Magazine gives some insight into this issue and discusses how the shale gas energy windfall is expected to impact several key economic sectors, including transportation.

When it comes to the US transportation industry, the most obvious use for LNG is as fuel for heavy-duty trucks. But conventional engines can’t run on LNG, and truck manufacturers are understandably hesitant to churn out LNG-powered engines on a massive scale until they know for sure that it will be profitable. So, how will the vehicle industry evolve with regard to natural gas?

GP Strategies Corporation, a global performance improvement company with decades of experience in the design and installation of cryogenic liquid and high-pressure gaseous storage and distribution systems, has a few ideas.

First quoted is the president of GP Strategies, Doug Sharp, who predicts that “the first customers who convert to natural gas vehicles will be the return-to-base operators, and the second will be the long-haul truckers.” Return-to-base operators are those users, like bus companies and delivery services, who fuel up at their own terminals in the morning, make their daily runs and return to base at the end of the day.

Mike Mackey, vice president of GP Strategies’ Alternative Fuels Group, lays out the math to support Sharp’s prediction and calculates that “at current fuel prices, a trucker would save $21,000 a year buying natural gas rather than diesel.”

In a video on the GP Strategies blog, Sharp elaborates on the impact that natural gas can have on transportation, specifically emphasizing the need to “build out the infrastructure” of the long-haul trucking industry. He explains, “If we replace 25% of the transportation fuel that’s used today with natural gas, we’ll save something like $680 million a day in foreign oil purchases.”

Even with all these savings, why are a few special interest groups important to the transportation industry as a whole? The Fortune article explains:

“In coming years, additional natural gas filling stations will be built to take care of fleets like those of Kwik Trip, municipal bus liners or others, such as long haul trucks.”