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Vol. 15, No. 34 Week of August 22, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

DOT&PF studies compressed natural gas to power state’s fleet

The Department of Transportation and Public Facilities is studying whether Alaska would benefit economically and environmentally by using natural gas instead of crude oil products like diesel and gasoline to fuel the more than 7,500 vehicles owned by the state.

The Division of Statewide Equipment Fleet plans to spend up to $65,000 on a study, due by the end of the year, which could lead to a compressed natural gas pilot program.

Like the name suggests, compressed natural gas, or CNG, is highly pressurized methane, reduced to a fraction of its original volume and store in special pressurized containers.

CNG can be used as a transportation fuel in special engines.

The Alaska Sustainable Energy Act, also known as Senate Bill 220, an energy policy bill passed earlier this year, mandated the study. The legislation described fleet conversion as a possible short-term solution for rising energy costs in Alaska, and paired it with a policy for the state to consider long-term energy costs when buying vehicles and equipment.

The study will look at existing CNG programs in North America to gauge the pros and cons from an environmental, economic and technical standpoint of using CNG in Alaska.

Some of those issues are obvious.

As a state with few highways, a limited number of filling stations in Alaska could service a large percentage of state and municipal vehicles. Many of the isolated villages around the state, though, would need their own stations to serve fleets of only a few vehicles.

While natural gas could have environmental benefits compared to diesel and gasoline, natural gas supplies in Alaska are currently stretched by residential and commercial use, electric generation and liquefied natural gas exports. However, the large and stable demand offered by state vehicles could help justify a pipeline from the North Slope, one possible solution for replacing the diminishing natural gas reserves in Cook Inlet.

Also, getting CNG to rural villages would in many ways replicate the transportation network that significantly drives up the price of fuels currently used for state vehicles.

Because CNG could make a major dent in domestic oil consumption, by taking cars off of gasoline, the federal government has devoted some resources to the technology, including financial models to gauge whether specific projects make business sense.

A focus on CNG in Utah

While the study will look at all public programs across North America, the request for proposals issued by the state on Aug. 10 specifically mentions a new program in Utah.

Utah currently offers several tax credits, grants and loans for people who buy CNG or other alternative fuel vehicles or convert existing vehicles to run on alternative fuels. The state also allows those vehicles to use high-occupancy vehicle lanes regardless of the number of passengers in the car. Salt Lake City offers free parking for alternative fuel vehicles, like CNG.

More relevant for the Alaska study, though, Utah runs a network of CNG fueling stations for public fleets and even allows private citizens to buy CNG in certain situations.

Utah is not alone, either. Several western states have networks of CNG fueling stations.

Not a new idea in Alaska

The proposed study is not the first to look at CNG as a solution to Alaska’s energy woes.

Earlier in the year, the engineering firm PDC Harris Group publicly pitched the idea of shipping liquefied natural gas to rural communities around the state and compressing it for use in furnaces, boilers and small power plants currently running on diesel and fuel oil.

Bethel, a major rural hub in Southwest Alaska, later presented a similar idea to a state legislative committee, looking for some financing to push the project forward.

CNG is also not the only alternative floating around for fueling Alaska vehicles.

Alaska Electric Light & Power, the Juneau electric utility, is developing a pilot project for electric cars in the state’s capitol. The utility believes that low-cost hydroelectricity combined with an isolated community where drive times are short could make it work.

—Eric Lidji

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