Executives from Pivotal LNG and Element Markets LLC Address Effects of Regulations on LNG Transportation, Environmental Commodities
As financing processes and complicated regulations affect the transportation growth of the liquefied natural gas (LNG) industry in the United States, it has many experts wondering what the future holds for transportation for this renewable resource.
On April 2, the C. T. Bauer College of Business at the University of Houston addressed this issue during the Distinguished Leaders Series with guests Pivotal LNG Senior Account Manager David Jaskolski and Element Markets LLC Chief Marketing Officer Randall N. Lack.
“This business creates opportunity,” Lack said. “However, government regulations make it hard. This is why we spend time on educating lawmakers and government officials on how their actions affect the process to advance these environmentally friendly bio gasses and how much or how often the companies I work with receive tax credits. Luckily, we have been able to find other markets that perpetuate these growth opportunities.”
Lack spoke about the two major benefits of bio gas, such as the LNG manufactured by AGL Resources’ companies, its renewability and its ability to remain greenhouse gas neutral.
Jaskolski agreed that renewable gas resources are extremely beneficial and that it is the most profitable route for the on-highway transportation market compared with their current reliance on diesel fuel.
“Diesel is much more expensive,” Jaskolski said. “Natural gas resources allow the shipper and the carrier to work together, effectively reducing costs for both sides.”
Besides LNG, Jaskolski said another efficient, low-cost fuel source is compressed natural gas (CNG), which is a good choice for light and medium-duty vehicles where fuel consumption is low. One company he believes could benefit from making the “big switch” is the United Parcel Service (UPS), a company that boasts the nation’s largest fleet on the road. This would help to decrease or eliminate the current fuel surcharge on all parcels that are transported, which would allow them to pass the savings to their customers.
“LNG and CNG follow the petroleum model, not the pipeline. They offer the same delivery methods to fuel these trucks as diesel does,” Jaskolski said. “The rate of return for switching to LNG and CNG is off the charts. The best way for a fleet to decide if they should consider these options is to start gathering information on logistics such as gas consumption and average miles driven by their fleet.”
Once this analysis has been provided, Jaskolski and his team can determine what a fleet’s “break-even point” is, which assists executives in the decision making process. He admits that not every company is a good candidate, so it’s his role to steer leaders in the right direction.
“What we have seen is that LNG is a very pure fuel. There are no impurities from oil or moisture that can prove detrimental to the life span of a transport fleet. LNG is not corrosive in addition to being odorless and non-toxic. It doesn’t mix with water, it floats, which means if it is spilled at all, it quickly vaporizes with no residue. The EPA doesn’t have to step in to clean up, which is a solution to the consistent problem we’ve seen using diesel.” Jaskolski said.
The Distinguished Leaders Series was launched in 2002 with Charles T. “Ted” Bauer, founder and retired chairman of AIM Management Group. The series serves as a forum to connect students with business and energy industry leaders.
By Danielle Ponder
Distinguished Leaders Series: “LNG and Transportation: A Look Into the Future”
Alumni, students and members of the Houston business community gathered for the third Distinguished Leaders Series at the C. T. Bauer College of Business at the University of Houston on April 2, where Pivotal LNG Senior Account Manager David Jaskolski and Element Markets LLC Chief Marketing Officer Randall N. Lack spoke about regulations impacting LNG transportation.