September 4, 2012 / 9:17 PM / 5 years ago

Natural gas usage by U.S. trucks to skyrocket - report

* Natgas demand in trucks may reach 14 bcfd by 2030

* Cheap natgas could displace diesel

* Hurdles remain, could reduce demand growth

NEW YORK, Sept 4 (Reuters) - The use of natural gas in U.S. trucks and fleet vehicles could skyrocket over the next two decades as low prices and new infrastructure provide incentive to switch to the cheap fuel, according to a research report released on Tuesday.

Record increases in U.S. natural gas production, thanks to prolific shale deposits, have pushed prices to 10-year lows this year, and they are likely to remain depressed, making it an attractive alternative to more expensive diesel for the foreseeable future, PIRA Energy Group said in its report.

“Future gas demand in natural gas vehicles has enormous upside potential, led by private sector initiatives, with or without federal government assistance,” PIRA, an energy consulting firm, said in a statement.

Gas demand in large trucks and fleet vehicles could reach 14 billion cubic feet per day (bcfd) by 2030 - about 20 percent of today’s daily gas production - a huge increase from the 90 million cubic feet per day consumed in 2011, according to the report’s high case scenario. In its lower scenario, total demand would hit 7 bcfd.

The increase from the higher case scenario could reduce diesel demand by 2.4 million barrels per day, about two thirds of today’s heavy trucking market.

Trucks running on liquefied natural gas would make up 70 percent of the 14 bcfd, PIRA said, with fleet vehicles consuming compressed natural gas making up the rest.

The move toward more natural gas in truck engines has already begun, with more fuelling stations appearing across the country and engine makers offering more affordable alternatives to the diesel and gasoline engine.

“The past year has witnessed a striking advance of private initiatives across the stakeholder spectrum -- from major vehicle producers, to fueling infrastructure firms, to fleet operators,” PIRA said. “A high degree of natural gas vehicle visibility and share of new orders in the public transit and refuse market are standout examples of compressed natural gas vehicle growth taking root.”

However, there are potential downsides to increase natural gas in engines, including technological uncertainties and infrastructure hurdles, which could reduce demand increases to 2030, the report said.

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