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2014 Media Kit
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Why railroads are taking a fresh look at natural gas

By: | at 01:19 PM | Channel(s): Intermodal  

Gas-fueled locomotives are not a new idea. Plymouth Locomotive Company built the first propane-fueled rail engine as early as 1936.

The industry has experimented with natural gas-fueled trains on a small scale for the past 80 years without ever moving beyond the prototype stage.

“Some members of the regulatory, engine supply and fuel supply communities believe railroads have an opportunity to use natural gas as a locomotive fuel to help meet emissions and performance goals,” Burlington Northern and Santa Fe (BNSF), Union Pacific (UPRR) and the Association of American Railroads wrote in a joint report in November 2007.

“Except for some potential niche applications, the railroads disagree,” they told the California Air Resources Board (“An evaluation of natural-gas fueled locomotives”).

But less than six years later, BNSF and the other major operators are sounding far more enthusiastic.

“The use of liquefied natural gas is a potential transformational change for our railroad and for our industry,” BSNF’s Chief Executive Matthew Rose told an energy industry conference in March 2013 (“BNSF to test liquefied natural gas in road locomotives”).

The 2007 evaluation was written as part of a memorandum of understanding between the railroads and environmental regulators concerned about air pollution in and around the rail yards in California.

The railroads told air-quality regulators that gas-fueled trains were not a cost-effective way to reduce emissions of particulates and nitrogen oxides. It would be cheaper and more effective to focus on improving the efficiency and emissions filters on diesel locomotives, they said.

“Decades of research and development activities and over-the-rail locomotive prototype demonstrations have given the railroads a great deal of information about the practicality of using natural-gas fueled locomotives.”

Cost was the crucial issue. According to the rail operators: “Claims that natural gas-fueled locomotives will be less expensive to operate than diesel equipment are unfounded. In recent years, prices in the North American natural gas market have been high and unstable.”

Climate & Costs

Scepticizm about gas-fueled trains was not new in 2007. The railroads quoted from an even older report written in 1994: “Railroads believe improved diesel technology is the way to achieve large emission reductions in a short time period with a high probability of success and low cost per ton of emissions reduced.”

But now BNSF is undertaking a new pilot program that aims to put liquefied natural gas-fueled locomotives on a limited number of tracks in revenue-service by the end of this year.

“While there are daunting technical and regulatory challenges still to be faced, this pilot project is an important first step that will allow BNSF to evaluate the technical and economic viability of the use of liquefied natural gas in through-freight service, potentially reducing fuel costs and greenhouse gas emissions,” Rose said.

His comments provide clues about the two factors that have driven a re-appraisal within the industry.

First, the focus has shifted from local to federal regulation as the concern has shifted from air pollution to global warming.

The California Air Resources Board was concerned only about air pollution near rail yards, and it could not do much to force change on the railroads because its powers were mostly pre-empted by federal environmental regulations.

In 2005, the Air Resources Board reached an agreement with BNSF and UPRR to reduce emissions from locomotives in the state but could not go much further.

“The national Clean Air Act has sweeping language protecting railroads and the interstate commerce they represent from state interference,” the board explained. “Only the most limited police powers to address nuisances, traffic disruption, or public safety can be reserved to the states.”

But the federal Environmental Protection Agency has now ruled that greenhouse gases including carbon dioxide are pollutants under the Clean Air Act and has begun to regulate them.

Railroads face much stronger pressure to cut emissions, now and in future, from regulators with far more sweeping powers.

Second, the economics of gas-fuelled trains have been transformed by the shale revolution. Fuel is one of the largest operating expenses for the railroad industry, so the industry has a sharp incentive to minimise fuel bills.

For the 20 years to 2011, the energy-equivalent prices of diesel and natural gas tracked one another fairly closely. There was no substantial advantage to using gas, especially once all the extra conversion costs were taken into account.

But since 2011, the commodity price of gas has been just one-fifth of the price of diesel for the last three years, thanks to the shale revolution, and the gap shows no sign of closing. (link.reuters.com/wak62w)

In 2007, the railroads explicitly warned about the high and volatile price of gas, and worried it would climb even higher in future as the United States was forced to import an increasing share of its gas from abroad.

By 2013, however, the idea of a “gas glut” was firmly established and led many analysts to conclude gas prices would remain comparatively low and stable for years to come. Suddenly, gas-fueled trains started to look like an attractive way to save money and cut greenhouse emissions at the same time.

Technical Challenges

There are still formidable technical and safety challenges to be overcome before gas-fueled trains could become common in line-haul service.

The joint report chronicles at least 13 small-scale experiments with natural gas-fueled locomotives since 1936, testing a variety of fuels (propane, compressed natural gas and liquefied natural gas) and ignition systems (spark ignition, low-pressure direct injection and high-pressure direct injection).

Burlington Northern, one of the forerunners of BNSF, showed the most interest, and tested various gas-fueled trains between 1983 and 1995. UPRR, locomotive manufacturers General Electric and Electro-Motive Diesel, as well as the U.S. Department of Energy, have also been involved in engine trials at various times over the last 30 years.

BNSF was still operating four small gas-fueled locomotives inherited from earlier experiments in switchyard service in the Los Angeles area when the report was written in 2007. The report observes: “High purity LNG is delivered to BNSF from a fuel supplier in Arizona by truck, and the locomotives are fueled directly from a truck beside the locomotive.”

But using gas-fueled locomotives in marshaling yards, called switchyards in the United States, is very different from long-distance line-haul.

Experimental results suggest the most efficient and cost-effective system for line-haul would be to use liquefied natural gas (because of its higher energy density) and high-pressure direct injection (because it makes the engine more energy efficient).

Previous trials produced mixed results about the technical efficiency and cost effectiveness of gas-fueled trains, a sense that the technology was tantalizingly close but not quite ready to be deployed.

There is no guarantee that the BNSF pilot program will be any more successful than its predecessors. But the financial incentives to make it work have never been stronger. (Reuters)