Lawmakers in Washington are considering what it would take to use natural gas in more cars. There’s some potential for using Alaska’s gas, though there are huge barriers.
In parts of the state, natural gas is looking as appealing as ever with gasoline prices soaring up to the $10 range and an abundance of the cleaner burning gas.
But appealing does not automatically make something practical.
“It’s generally around $5,000 to put a unit in your home,” Chrysler’s Reg Modlin said, testifying before the Senate Energy and Natural Resources Committee
He’s talking about the initial cost of installing a natural gas refueling unit in someone’s garage. Just like electric vehicles that plug in and the owner pays through the monthly utility bill, an ideal set up for natural gas would be diverting power from your house, into your car.
Modlin says industry is looking to lower the price by about a third and home refueling is not some pie-in-the-sky idea.
“We think the opportunity is very real, and we think customers would appreciate it,” Modlin said.
Of course, there’s the other option. Filling stations can install pumps for natural gas. There’s already one in Anchorage. Larry Persily, is the federal coordinator for the Alaska Gas Pipeline and says there are more natural gas fueling stations coming down the line.
“The problem is, it costs $500,000 – $1 million to put in a natural gas fueling station. I’m not going to do that unless I know I’ve got enough customers who are going to fill who are going to cover my costs,” Persily said.
Cities have been able to invest that money for long-term savings. Here in Washington, D.C. buses are now powered by natural gas.
Persily says individuals will not start buying natural gas vehicles – which are more expensive than gasoline-powered ones – until there are enough stations equipped with natural gas pumps.
There are only about a thousand natural gas ready stations in the country – with more than a hundred in California alone.
So it comes down to economic basics – supply and demand.
“There’s a lot of gas on the North Slope the problem is getting it anywhere. And you would never be able to afford a pipeline off the North Slope just to fuel cars and trucks in Fairbanks,” Persily said.
Oil companies, Persily says, would only be willing to make a $40-50 billionr investment in a pipeline from the North Slope if they’re able to export liquefied natural gas.
For her part, Senator Lisa Murkowski has met with East Asian diplomats to make the pitch for Alaskan LNG. Some Democrats, though, are saying we need to slow down. Representative Ed Markey, a Massachusetts Democrat and a leader on energy issues in the House, tried to move an amendment that would have stopped the U.S. from exporting its natural gas.
And in the Senate, Ron Wyden says that though consumers have enjoyed low natural gas prices for years, volatility remains high. And, Wyden says, entering the international marketplace would not reduce volatility.
“This of course would happen if you have these LNG export terminals constructed. It certainly has the potential to worsen the problem. Because if you think guessing on the prices of natural gas prices was a challenge before, add the international competition that are paying four or five times as much,” Wyden said.
Persily dismisses this as political grand standing. And though that may be the case, it may not stop with the election. Wyden is slated to become the top Democrat on the Natural Resources committee in January.