WASHINGTON – Thanks to hydraulic fracturing, the United States has increased its oil production quite significantly in the last few years. Still, America imports about 50% of the 18 million barrels of oil it consumes every day. For the month of February 2014 the US imported 255 million barrels of oil, at a cost of $ 27.8 billion.
Buying more oil from Canada and Mexico
Even though our energy imports bill has come down in recent years, this is a lot of money. Down the line, the US will have the option of buying more of the oil it needs from its immediate neighbors, Canada and Mexico, as opposed to importing it from OPEC countries. This will be a good development for US energy security. Better to have our key suppliers close by, and better to send our money to Canada, a friend and an ally, than paying Middle Eastern countries for the same commodity.
LNG as transportation fuel
In the meantime, as T. Boone Pickens keeps reminding us, (check his www.pickensplan.com), now we have the means to substantially reduce our OPEC oil imports, (about 4 million barrels of oil a day, out of the 9 million we have to import), simply by using our own, domestically produced, natural gas as transportation fuel.
Yes, thanks to fracking, the US is now the largest natural gas producer in the world. Beyond using natural gas for (cheaper and cleaner) electricity generation and other industrial applications, natural gas can be effectively used as transportation fuel, instead of oil derived diesel or gasoline.
LNG for heavy trucks
For years, Pickens has been saying that the most cost-effective target for a fuel switch is heavy trucks. There are about 8 million heavy trucks in America. They use oil-derived diesel. Now we have an optimized new engine (a 12 liter natural gas engine made by Cummings Westport) that can efficiently use liquefied natural gas as fuel for heavy trucks. And now we also have at least the backbone of a national network of LNG refueling stations, with more to come.
Cheaper and cleaner
The reason for switching over from diesel to LNG is cost. Natural gas is much cheaper than diesel. According to Pickens, now that the technical problems have been resolved, all US companies that operate large fleets of heavy trucks (Walmart, FedEx, UPS and others) have a strong economic incentive to switch over to natural gas. And, by the way, LNG is a lot cleaner than diesel. Therefore there is an environmental advantage –lower emissions and cleaner air–in switching.
And what would be the net economic result of such a change? The net result would be that America would stop buying approximately 3 million barrels of oil a day from OPEC, this way saving about $ 9 billion every month.
Using our own energy
Natural gas is not free of course. But it is cheaper than diesel. Besides, by switching over to this domestic fuel, US dollars would be spent at home, on US energy, produced by US firms, using US technology and employing US workers.
It does not take a genius to appreciate that it is better for US companies to buy their fuel in America, as opposed to sending our dollars abroad to pay for imports.
Silence in Washington
In all this what is most remarkable is Washington’s almost complete silence on the incredibly positive impact of this “fuel revolution” now in the making. The Federal Government should be out there promoting this truly advantageous change, this way hastening its implementation.
For instance, the Federal Government could issue a new policy guidance whereby, from now on, it will buy only LNG powered heavy trucks. This would send a powerful signal to energy producers, to truck manufacturers and to all the heavy transportation industry leaders.
But, no, this is not happening. Again, the numbers are compelling. We have the natural gas. Now we can make the trucks that will use LNG efficiently. LNG is cheaper than diesel. And LNG is cleaner than diesel. There is no down side.
And yet this revolutionary transformation that will save money and support various American economic sectors, while enhancing US energy security, is not promoted by US policy-makers.
Fossil fuels are “bad”
And why not? Because it is all about promoting a fossil fuel. And most Americans have been taught for years that fossil fuels are “bad”.
The stupidity of all this is that somehow to keep buying oil (a dirty fossil fuel) from OPEC is OK, while using our own natural gas (much cleaner than oil) to fuel our own trucks is considered a bad idea.