Unedited transcript of energy independence chat, Oct. 10, 2012
NewsOK energy reporters chatted with readers Wednesday morning about their recent series on energy independence. Below is an unedited transcript of the chat.
|
Published: October 10, 2012
Leave a comment
NewsOK energy reporters chatted with readers Wednesday morning about their recent series on energy independence. Below is an unedited transcript of the chat.
NewsOK
8:28 a.m.
Good morning everyone. We'll get started at 9 a.m., but you start submitting your questions now.
9:02 a.m.
Hello everyone. Let's get started.
9:03 a.m.
I'm your host, Paul Monies. I'm joined by Energy Editor Adam Wilmoth and Energy Reporter Jay F. Marks.
9:03 a.m.
Use of CNG is so feasible and economic in Oklahoma, it seems that adoption of CNG would be more rapid. Should the Governor require car dealers to inform potential buyers of Civics & 3/4 ton trucks of the CNG option for those vehicles?
9:04 a.m.
That might help a bit, but it doesn't seem likely.
9:04 a.m.
Gov. Fallin repeatedly has talked about avoiding mandates in her energy policy.
9:05 a.m.
The most likely course is that discussion of the availability of CNG -- along with high gasoline prices -- will spur more people to ask questions about it as an alternative.
9:06 a.m.
Do any of our chat participants drive a CNG car?
9:06 a.m.
Tax credits and other rebates also will speed the adoption of CNG in Oklahoma, but it may take longer in other states that don't have the same fueling infrastructure.
9:07 a.m.
I think CNG is becoming more popular, but it takes a long time to change an industry and infrastructure that has been in place for so long.
9:08 a.m.
Yes, we've had about 100 years of gasoline infrastructure already built out in the country.
9:09 a.m.
It's only been within the past five years that the domestic supply of natural gas has been so plentiful that wide-scale use of CNG seemed feasible.
9:10 a.m.
I drive a 2010 Honda Civic and 2011 Chevy Tahoe that both run on CNG
9:10 a.m.
Craig, do you have any issues when you travel outside Oklahoma?
9:10 a.m.
Before that, there was talk that the country would need to import natural gas just to meet the demand for electricity and chemical manufacturing.
9:11 a.m.
Yes. CNG stations are not as prevalent in other states as they are in OK. I've refueled with CNG in Louisiana, Texas, Kansas.
9:12 a.m.
A lot of the experts we talk to think the passenger vehicle market for CNG will take a long time to change. That's why we're seeing more CNG efforts on fleets and trucking.
9:12 a.m.
What prompted you to switch to CNG, Craig?
9:13 a.m.
Let's also remember the emergence of electric technology. With extended-range options like the Chevrolet Volt, drivers have a growing number of fuel options.
9:13 a.m.
I'm curious to see how electric vehicles will catch on.
9:14 a.m.
I would like to drive a Tesla some day, just to see.
9:14 a.m.
That's true Paul in other states, but in Oklahoma we already have so many CNG stations, and we have great economic incentives (besides the sub-$2 gas price) that purchasing a CNG Civic is only $1,000 more than buying a gasoline one.
9:14 a.m.
The Volt apparently costs Chevy a lot of money each time one is sold, but maybe growing demand will make it more economical for the company.
9:14 a.m.
The key on electric vehicles is the battery. That's still an evolving technology.
9:14 a.m.
As am I. For Oklahomans and midwesterners in general, extended-range options will be a necessity.
9:15 a.m.
Otherwise, there is no incentive for carmakers to offer such options.
9:16 a.m.
It's still much cheaper to store natural gas in a vehicle than electricity - even with a $7,500 federal tax rebate, the electric cars are still uneconomic.
9:16 a.m.
Paul, you are right about the evolving tech of batteries. The great thing about CNG is that it works economically today.
9:16 a.m.
I've also heard some folks complain about the time it takes to charge electric vehicles. It's not always feasible to be stopped/charging for seven hours at a time.
9:16 a.m.
Judging by our questions, the transportation industry is a key part of the problem when we talk about energy independence or energy security.
9:17 a.m.
I am intrigued, though, by the promise of how smart grid technology will allow consumers to use public charging stations, with the cost of electricity going on their monthly residential bills.
9:17 a.m.
Jay, we're seeing full charges in about 4 hours. The beauty of the Volt is that it will get you where you need to go with gas power.
9:18 a.m.
Yes, the gasoline-electric hybrids will fill a niche in the future.
9:18 a.m.
Mark, I decided in 2009 to investigate whether CNG or electricity could be economically used in Tulsa for my needs. After a 9 month study, that I chronicled at my blog, burnusgas.com, I purchased a Honda Civic.
9:18 a.m.
That is a better figure. How long does the charge last? How far can it get you?
9:18 a.m.
I think we should be looking at CNG-Electric hybrids.
9:19 a.m.
Transportation sector is where most of the imported energy is consumed. That's why it must be addressed in order for the US to be energy independent.
9:19 a.m.
Brian, that's an interesting concept. Don't think I've heard of a CNG-electric hybrid before!
9:20 a.m.
Brian, Toyota built about 200 CNG hybrid Camry's in 2000. They are collector's items today. Given the low cost of CNG, hybrid technology is more about range extension than cost savings.
9:20 a.m.
Would you be happy with a CNG only or electric only commuter vehicle, or would you prefer a hybrid that has more range and more options?
9:20 a.m.
That was the consensus of many of the people we talked to for our energy independence package, Craig. It'll be interesting if the market will make the necessary changes to get us there.
9:21 a.m.
My Honda Civic gets 200 miles per CNG fill up - I've found that to be sufficient for commuting. So, yes, CNG only works for me. It's safer too because there is no gasoline on the vehicle.
9:21 a.m.
Europe is all about diesels. Why hasn't that been talked about here in the United States much?
9:21 a.m.
Adam, I think it ultimately comes down to cost per mile. I'd love to have the bells and whistles, but there's alimit to what I'd be willing to pay.
9:22 a.m.
The medium duty market is already shifting to CNG. For example, Waste Management only buys CNG trash trucks now.
9:22 a.m.
Seems to me diesel is being ignored because it is more expensive than gasoline.
9:22 a.m.
High gasoline prices seem to be the only thing that can get most folks interested in talking about alternate fuels.
9:23 a.m.
Once prices go down, people lose interest and move on to other concerns.
9:23 a.m.
Paul, do our refineries have the capacity to produce diesel at the level needed to make it a feasible optione?
9:23 a.m.
Brian, we have plenty of diesel here in the U.S. In fact, we're exporting diesel to Europe.
9:24 a.m.
There is just no economic driving force behind diesel right now.
9:25 a.m.
Wasn't aware. With such a supply, why are diesel prices so much more expensive?
9:25 a.m.
And electric is struggling for the same reason. Unlike CNG, there just isn't enough economic advantage to justify switching to diesel or electricity.
9:25 a.m.
I agree that alternative fuels are becoming popular now because they're seen as a cost savings to gasoline. Diesel doesn't work right now because it's more expensive.
9:25 a.m.
Diesel is going to be endangered in the U.S. if Boone Pickens has anything to say about it. Plus it's hard to argue against saving $2 a gallon on fuel by switching to natural gas.
9:25 a.m.
So, assuming you don't want to switch from gasoline, will the new fuel-efficiency standards coming out help cut consumption?
9:27 a.m.
Gasoline and diesel prices are not set by refinery capacity - they are set by the global demand for those products because the US exports gasoline and diesel.
9:27 a.m.
I don't have an answer for you on the cost of diesel, but it probably has something to do with its role in the market.
9:28 a.m.
Trucking can't shut down if prices get too high. The costs are just passed on to consumers.
9:28 a.m.
New CAFE stds will reduce consumption for sure. But there will be lucky folks that drive the car they want to because they are using CNG - hence my wife drives a Tahoe instead of a smaller crossover vehicles.
9:29 a.m.
Craig, I think you just hit on another reason CNG has not caught on faster: vehicle choice.
9:30 a.m.
A few years ago there were only a handful of options that could be converted to run on CNG.
9:30 a.m.
Now there are a lot more, with even more on the horizon thanks to efforts like the one launched last year by Oklahoma Gov. Mary Fallin and Colorado Gov. John Hickenlooper.
9:30 a.m.
What do you think about the CAFE standard? The people we talked to either loved it as a way to reduce use of foreign oil or hated it, saying it will make cars lighter and less safe.
9:30 a.m.
The states' interest in adding CNG to their fleets will make more NGVs available to the public as well.
9:31 a.m.
Yes, Jay, vehicle choice is a huge issue. It's getting better now - in addition to the Civic, there are now full size vans and 3/4 ton trucks available.
9:32 a.m.
I like to think automakers can figure out a way to do both -- better gas mileage, without sacrificing safety -- if they're backed into a corner.
9:32 a.m.
Plus I think they'll find that people will be willing to pay for vehicles that get better gas mileage.
9:33 a.m.
I'd certainly like to get more than 16 mpg from my 2004 Chevy Blazer.
9:33 a.m.
I have talked to some of the Fleet guys at the dealerships that are part of this deal that was announced with the State, but they have not seen one order yet. It has been in place a couple of months.
9:33 a.m.
All this talk of switching or fuel efficiency is great if you're in the market for a new vehicle, but what about folks who can't afford to go that route and want a used car?
9:34 a.m.
The bids were just released on Friday. State governments take some time to move, but I expect them to take advantage of the NGV deals being offered.
9:35 a.m.
Also I run a CNG conversion company and I am upset we didn't have a chance to bid on any of this business. We could have gained a lot of ground for the States in this matter and in a quicker time frame.
9:35 a.m.
There are some dealerships that sell used CNG fleet vehicles.
9:36 a.m.
I have heard that there are some used vehicle options for CNG, but it'll probably take some time before anything other than old fleet trucks are available.
9:36 a.m.
If you drive near the OKC airport or OSU in Stillwater, there is a steal of deal right now on Honda Civics.
9:36 a.m.
The states were looking for original equipment, Justin, so they would be able to take advantage of warranties from automakers.
9:36 a.m.
Those two locations have Clean Energy CNG stations where you can use the $3,000 free fuel card (in addition to the 50% state tax credit and the $2,500 ONG rebate).
9:37 a.m.
That's a pretty good deal if you want to buy a Honda Civic.
9:38 a.m.
I have use both OEM (Honda civic) and aftermarket conversions (Tahoe). OEM is definitely better, but aftermarket offers a lot more vehicle options. You just have to be prepared to deal with repair/service difficulties on aftermarket conversions.
9:39 a.m.
The Honda Civic was not my first choice of vehicle, but the economics are so overwhelming (saving thousands of dollars annually) that I could not bring myself to buy another vehicle that runs on gasoline.
9:39 a.m.
Craig, I've heard the Civic has very little trunk space. Do you miss it? Any other drawbacks?
9:41 a.m.
I just see it taking the automakers awhile to do anything major. And our conversions that our EPA certified do not void factory warranties. WE have been doing a lot for local dealerships. I have not a had a GM vehicle sit on the lot for more than 4 days so far. Oklahomans are ready to make the jump just need to know it is available.
9:41 a.m.
Check out this blog post for trunk space test on the Civic - http://www.burnusgas.com/2009/12/grocery-getting-test-for-gx.html
9:42 a.m.
Justin, where do consumers take their converted vehicles for service?
9:42 a.m.
Until automakers roll out more CNG options, conversions will be necessary for people looking to switch to CNG in the vehicle of their choice.
9:42 a.m.
How about energy independence outside of the transportation market? Is it a worthwhile policy to pursue?
9:43 a.m.
Outside of transportation market, we are already independent.
9:44 a.m.
Craig, we are training the dealerships to do the services themselves as long as they have State Certified CNG personnel. Until then we will do the services.
9:44 a.m.
What about exports of natural gas? A few years ago, we were talking about importing LNG. Now there's an effort to export US-made natural gas.
9:44 a.m.
A great option however, would be to sell natural gas globally as LNG to offset our importation of crude oil.
9:46 a.m.
Note that as a consumer of CNG, I'm very sensitive to the price of natural gas. I do not believe that exporting LNG will affect the price of nat gas at all - we truly have that much supply.
9:46 a.m.
Exporting LNG is an intriguing option, but it will depend on how long gas prices remain elevated in Europe and Asia.
9:47 a.m.
Increased gas production there (Europe and Asia) could ruin the market for U.S. gas, so spending billions on an export terminal may be a risky bet.
9:47 a.m.
Consumers get upset with talk about exporting diesel. Do you think they would object if the country starts exporting and prices go up, even if they are unrelated?
9:48 a.m.
True, Jay. It really depends on the "depth" of the global LNG mkt and I don't know the answer to that. I just believe that companies with lots of nat gas should be able to sell to foreign companies. What shape would US be in if Saudi decided not to export oil?
9:48 a.m.
The Home Refueling Appliance that will be available the first part of 2013 will be a great bump in the CNG industry. I just don't know how long till the government will step in and demand their money for the NG used in home to fuel your vehicles.
9:48 a.m.
Rising prices will always be a touchy subject, no matter what commodity we're talking about. No one ever wants to pay more...
9:49 a.m.
If there are companies and investors willing to take the risk on exporting LNG, they should be allowed to do that.
9:49 a.m.
That's very true, Jay - but consumers are ignoring the Honda Civic today and paying $2 more per gallon for fuel when they don't have to.
9:50 a.m.
In visiting fleets and dealerships the #1 question I get asked is... How long till they jack up the price of CNG once it gets more popular?
9:50 a.m.
Agreed, Craig. That should be a business decision, but as we've seen, energy issues are becoming increasingly political.
9:51 a.m.
Justin, you have a point. Our federal and state gasoline/diesel taxes pay for roads and bridges.
9:52 a.m.
Any idea what is in Romney/Ryan's energy plan? I heard Boone say after he read it he felt a lot better than the outline he originally saw.
9:52 a.m.
The avg price per gal of CNG in OK today is $1.50. The $1 more pays for taxes, the CNG equipment installation and operation.
9:53 a.m.
The wholesale price of nat gas today is around $4/Dth. Multiply that by 0.126 and that's the cost of the nat gas in one gallon of CNG - so 50 cents/gal of CNG.
9:54 a.m.
Justin, you make a good point. There is a federal gasoline tax of 18.4 cents per gallon of gasoline and 24.4 cents per gallon for diesel. State and local governments charge an additional 26 cents to 69 cents. So far, those taxes are not added to CNG.
9:54 a.m.
If nat gas doubles to $8/Dth - then CNG would only go up to $2. And if nat gas doubles, crude oil will most certainly also go up. In summary, I am convinced that barring some federal regulatory action, there will nearly always be a large price savings for CNG vs gasoline or diesel.
9:54 a.m.
Craig, there is also the price of electricity to run the compressors.
9:54 a.m.
Thanks for joining in today's chat. We'll be wrapping this up at the top of the hour, so we've got a few more minutes.
9:54 a.m.
Craig, how much of that $1 is actually taxes though? Seems like retailers are probably still dealing with a lot of infrastructure costs.
9:55 a.m.
Jay, there are taxes included - I don't know exactly what the breakdown is. I know there are road taxes included.
9:56 a.m.
The guys I have talked to that own public stations are profiting around .35 per GGE. Still alot better than selling gasoline. Loves is profiting a little more.
9:56 a.m.
Note Justin, that the profit is required to pay out the CNG compressor investment.
9:56 a.m.
.55 per GGE in the state of Oklahoma is what we pay on road taxes for CNG
9:57 a.m.
ya but they are only paying a quarter of that because of the State Tax Credit.
9:57 a.m.
Got a couple of minutes left. Any more questions?
9:58 a.m.
I am OK with the price of CNG and them profiting, keeps my $$$ in the US instead of countries that would rather see us dead.
9:58 a.m.
True Justin. I have talked to some companies that don't have enough tax liability in OK to benefit from the tax credit.
9:58 a.m.
Paul, Jay - thanks for hosting this chat.
9:59 a.m.
Very true, I am happy to see the industry being what it is in OK. Thanx awesome convo
10:00 a.m.
Thanks for attending this chat, everyone.
10:05 a.m.
Thanks for hosting, Paul. Thank you all for participating.
If you prefer your thoughts to appear in The Oklahoman's Opinion section, we encourage you to submit a letter to the editor.
Mortgage Rates Hit 2.50%
If you owe under $729k you may qualify for 2.90% APR Govt Refi Plans.
www.SeeRefinanceRates.com
If you owe under $729k you may qualify for 2.90% APR Govt Refi Plans.
www.SeeRefinanceRates.com
Prostate Cancer Options
Learn Main Causes & Symptoms of Prostate Cancer + Latest Treatment News
www.montefiore.org
Learn Main Causes & Symptoms of Prostate Cancer + Latest Treatment News
www.montefiore.org
Prev
Follow
