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Railways look to ride natural gas boom

Natural gas has started to challenge oil as the dominant transport fuel with companies building gas powered ships and installing networks of service stations on water and land, reported Reuters.

The expectation of cheaper gas and tighter environmental regulation have created demand for a cleaner alternative to the oil-based fuels that have so far dominated the transport world.

Rail companies want to take advantage of booming natural gas production that has cut the price of the fuel by as much as 50 per cent and they are preparing to experiment with redesigned engines capable of burning both diesel and liquefied natural gas. (Associated Press)

Natural gas “may revolutionise the industry much like the transition from steam to diesel,” said Jessica Taylor, a spokeswoman for General Electric’s locomotive division, one of several companies that will test new natural gas equipment later this year.

Both of the major locomotive manufacturers, General Electric and Caterpillar’s Electro-Motive Diesel, have developed prototypes that will be tested by Union Pacific, CSX, BNSF and Canadian National railways beginning this year.

If the projected cost savings are realised, railways would improve their profits and better compete against trucks, where they already hold the advantage on deliveries longer than 800 kilometres.

“They can lower their costs further and widen their advantage over trucks,” Edward Jones analyst Logan Purk said. But he sounded one note of caution: Natural gas prices have always been volatile, and they could climb if gas exports expand significantly and more industries switch over to natural gas.

Source* Reuters, Associated Press

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