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           >><<<<_____Editor: Charlie Bartholomew, kryopak@qwest.net_____<>><<
UPS adds 48 LNG TRUCKS;  NG fleet now at 1100 
Department of Energy New Energy Frontier strategy
LNG stations Las Vegas Ontario California SLC Utah
BHP_Billiton acquires Chesapeake's Fayetteville shale assets
UPS LNG Regional Truck Fleet in Las Vegas
LNG fuel best way to meet North American emissions limits

Department of Energy New Energy Frontier strategy
poweronline.com 2/24/11
President's $12.2 Billion 2012 Budget For Interior Focuses On Spending Discipline, Strategic Investments, And Vital Missions February 14 2011

The 2012 Budget continues the Department's New Energy Frontier strategy that is intended to create jobs, reduce the Nation's dependence on fossil fuels and oil imports, and reduce carbon impacts. Facilitating renewable energy development is a major component of this strategy.
During this critical time of national economic recovery, Interior's programs and activities continue to support more than 1.3 million jobs around the country, generating roughly $370 billion in annual economic activity, according to a 2009 DOI economic study.
Additional Revenue Generating Proposals
The 2012 Budget incorporates new and expanded discretionary fees of $38 million and $65 million, respectively, for onshore and offshore inspection of oil and gas operations. In addition, the Budget incorporates a range of mandatory legislative proposals that will generate additional revenue and save $3 billion over the next decade by:
•Charging a fee on non-producing Federal oil and gas leases to encourage timely energy production on lands and waters already leased for development.
•Repealing a prohibition on the ability of BLM to issue cost-recovery regulations for processing applications for permits to drill and repeal of mandatory funding currently provided to BLM for this purpose.
UPS LNG Regional Truck Fleet in Las Vegas
Seal Beach, CA February 22, 2011
-- Clean Energy Will Build and Operate New Fueling Station As Key Link in Southwest LNG Truck Fueling Corridor

UPS, the world's largest package delivery company, has contracted with Clean Energy Fuels Corp. (Nasdaq: CLNE) to fuel its new fleet of 48 liquefied natural gas (LNG) package transportation trucks at a new truck fueling station near UPS facilities in Las Vegas, Nevada. The agreement has a seven-year initial term with three one-year renewal options. Clean Energy will design, build, own and operate the station, which is set for opening in the first half of 2011.

"Investment in a fuel-efficient technology that helps reduce our carbon footprint and reduce our dependence on petroleum remains a key component of UPS's transport strategy," said Mike Britt, Director of Vehicle Engineering at UPS. "For our heavy-duty vehicles, LNG has proved successful in reducing emissions, keeping our maintenance and operating costs low, and significantly reducing our dependence on petroleum for these shipping lanes."

The public access LNG fueling station will support the deployment of a new regional UPS fleet of 48 LNG delivery trucks used to transport packages between UPS facilities in Las Vegas and Ontario, Calif., as well as to other regional destinations. LNG fuel requirements are expected to exceed 1.2 million gallons annually for the UPS 48-truck fleet, which will be deployed during the first half of 2011. The station will also become a key link in the Southwest LNG truck fueling corridor being developed by Clean Energy.

James Harger, Chief Marketing Officer, Clean Energy, said, "We are delighted to have this opportunity to extend our relationship with UPS to support its efforts to curb harmful air pollution and global warming emissions. The new Las Vegas LNG truck fleet is part of continuing efforts by UPS to reduce its emissions from the use of fuels like gasoline and diesel, and to lower its carbon footprint."

Harger added, "This UPS station project is a major step toward realizing our goal to create a Southwest LNG truck fueling corridor that will extend along major truck transport routes from San Diego to Salt Lake City." The development of the Clean Energy LNG station infrastructure is in direct response to the increasing demand for natural gas fuel as major trucking companies secure and deploy LNG-powered trucks throughout the region.

To supply its Southwest regional LNG fuel customers, Clean Energy operates the largest LNG production plant in the Southwest, located in Boron, Calif. The facility includes a 1.8-million-gallon LNG storage tank as an important supply resource.

LNG fuel stations Las Vegas Ontario California SLC Utah
The new LNG-powered tractors will pull trailers on a transit lane linking Ontario, California, and Las Vegas, Nevada, along with UPS's 11 existing LNG tractors.

UPS plans to build publicly accessible LNG fuel stations in Las Vegas and will be able to access existing fuel stations in Ontario, California, and Salt Lake City, Utah, filling in an LNG trucking corridor that extends from California to Utah.

"UPS has shown environmental leadership in expanding their natural gas fleet of delivery vehicles to a fleet of heavy-duty interstate trucks powered by Westport HD," said Clark Quintin, president of Westport HD. "Connecting California's existing LNG fueling stations with developing ones in Utah will create valuable LNG capability on a busy goods movement corridor."

"The added advantage of LNG is it does not compromise the tractor's abilities, fuel economy or drivability, and significantly reduces greenhouse gases," said Britt. "These trucks have a solid 600-mile range and with reliable fueling infrastructure make an excellent alternative fuel system."

Funding for the trucks and fueling stations is supported by California's South Coast Air Quality Management District and the Energy Department's Clean Cities program.

UPS is the only private delivery company using this LNG technology in its fleet and now has more than 1,100 natural gas-powered vehicles in service.

Besides liquified natural gas, UPS has deployed compressed natural gas, propane, electric and hybrid electric vehicles in the United States, Brazil, Canada, France, Germany, Hong Kong and the United Kingdom.

LNG fuel best way to meet North American emissions limits
A report from DNV says that using LNG as fuel is the most efficient and economical way for ships to meet air emissions requirements in the U.S. and Canada that take effect in August 2012. Environmental Control Areas (ECA) will gradually be enforced along the North American coastlines. They will have full force in 2015 and 2016, leaving shipowners a limited number of options for modifications to their ships if they want to continue trade in North America.

"Domestic ships in North America have three options to meet new emissions control regulations; install CO2 scrubbers, burn low sulfur fuel or switch to LNG fuel for the ship's propulsion," says Kenneth Vareide, director of operations for DNV North America Maritime.

Mr. Vareide says that an LNG fueled propulsion plant may add about $3.6 million to the cost of a typical domestic cargoship, however, over the operating life of the vessel, at today's gas rates, LNG fuel would save more than $4 million over CO2 scrubbers and $12 million for low sulfur fuel."

Specifically, the use of LNG fuel for a ship would reduce nitrous oxide (NOx) emissions by 85-90%, sulfur dioxide (SO2) and particulate matter by almost 100%, and it would result in 15-20% less greenhouse gas emissions.

DNV's report is the first study of U.S. and Canadian domestic shipping and recommendations to meet new environmental legislation for North America.

"LNG is particularly an attractive alternative for vessels with a fixed trading pattern, which should fit well with the biggest segments; ferries, offshore support vessels and tug/push boats. Besides, much of the coastal trade in the U.S. is fixed in its trade pattern and we have been in contact with several companies that are considering LNG for newbuildings and conversions," says Mr. Vareide.
BHP_Billiton acquires Chesapeake's Fayetteville shale assets
worldoil.com 02/22/2011
BHP Billiton has agreed to acquire all of Chesapeake Energy Corp's interests in the Fayetteville Shale including the midstream pipeline system, for US$4.75 billion, which BHP Billiton expects to fund from the Group's cash resources. The acquisition is consistent with BHP Billiton's strategy of investing in large, long-life, low-cost assets with significant volume growth from future development. It also supports the company’s goal of diversification by geography, customer and product. BHP Billiton will become the operator of Chesapeake's operated interests in the field.

Chesapeake's Fayetteville shale assets include about 487,000 acres of leasehold and producing natural gas properties located in Arkansas. This is the second largest position in one of the largest gas fields in the world. The acquisition will increase BHP Billiton's net reserve and resource base by 45%. These assets currently produce over 400 MMcfgd and include development options that will support substantially higher production over a 40-year operating life. BHP Billiton and Chesapeake have also agreed to a 12-month services agreement to ensure the safe transfer of operations.

Depending on regulatory approvals, BHP Billiton expects to close in the first half of 2011.

"The Fayetteville Shale is a world-class onshore natural gas resource," said J. Michael Yeager, Chief Executive of BHP Billiton Petroleum. "This transaction marks BHP Billiton's entry into the US shale gas business. The operated position we are obtaining will immediately make BHP Billiton a major North American shale gas producer. It provides access to a competitive, long-life resource basin that benefits from our ability to invest through the economic cycles. Longer term, the expertise we gain here will be usable elsewhere as we continue to grow our business."
UPS adds 48 LNG TRUCKS NG fleet at 1100
February 22, 2011, By MATTHEW L. WALD  United Parcel Service
U.P.S. is about to add 48 trucks powered by liquefied natural gas and would like to deploy more.The final frontier for alternative motor fuels, powering big tractor-trailers, has been crossed.  UPS will now boast a fleet of more than 1,100 natural gas trucks including compressed natural gas (CNG) delivery vehicles powered by Cummins Westport engines and the current order of LNG tractors. 

The alternative is natural gas, but not in the now-familiar form of compressed gas. Instead, a growing number of the biggest trucks are running on liquefied natural gas. Burdened by diesel prices that topped out at over $5 a gallon in 2008 and mindful of the sustained collapse of natural gas prices, trucking companies are expressing new interest in liquefied natural gas for their thirstiest trucks, the over-the-road 18-wheelers.

“It’s the only long-term viable option to diesel,’’ said Michael G. Britt Sr., director of maintenance and engineering at United Parcel Service, which is about to add 48 L.N.G. trucks and would like to deploy many more, if the fueling infrastructure is in place and if truck production volume rises enough to bring down costs. Many other companies are running test fleets.

Compressed natural gas is not a practical substitute for diesel with these tractor-trailers, because they burn so much fuel on a trip, consuming 20,000 to 30,000 gallons a year. From an energy and environmental standpoint, they are a prime target because collectively they account for three-quarters of the fuel used by commercial vehicles. By one estimate, switching to liquefied natural gas could reduce oil imports by more than a million barrels a day.

According to Rich Kolodziej, the president of NGV America, a trade association, the amount of diesel fuel currently used annually for highway travel would work out to six trillion cubic feet of natural gas. (Current national natural gas demand over all is in the range of 22 trillion cubic feet a year.) Prices are depressed because of the recession and because the government has sharply raised its estimate of gas reserves as a result of the expansion of a drilling technique known as hydraulic fracturing, or fracking.

Natural gas prices per million B.T.U., the standard unit for gas, rose to over $12 before the recession began, but are now in the range of $4 to $4.50.

Scientists and engineers are working on another alternative for these trucks, diesel fuel made from some renewable source, but have not found a formula for commercial success. So the best alternative appears to be liquefied natural gas.  L.N.G. requires only about 70 percent more space than diesel fuel. Compressed gas, in contrast, needs about six times as much space as diesel, even when squeezed down to 3,000 pounds per square inch.

U.P.S. plans to begin adding 48 liquefied natural gas trucks to its hubs in Ontario, Calif., and Las Vegas in the next few days. These will be 15-liter, 450-horsepower diesel engines, the biggest in common use on the highways. Like engines running on diesel fuel, they work without spark plugs, igniting the fuel through compression. Compression-ignited engines are more efficient than spark-ignited engines, so they get more work out of a given amount of fuel.

Upon start-up, they will use a few squirts of diesel to get going; a computer will also add diesel fuel when it senses that the engine needs it for lubrication. But over all, diesel use will be cut by about 95 percent.

U.P.S. runs a virtual menagerie of alternative vehicles using propane, batteries or hydrogen fuel cells. Some are hybrids that use hydraulic pressure instead of electric batteries.

Mr. Britt said. His 450-horsepower tractors need so much energy to tow two trailers over mountainous terrain that “the first trailer would have to be all batteries,’’ he said.

U.P.S. received $5.5 million for the project from the state of California that was allocated by the federal Energy Department. The company used $4 million to pay for the extra cost of the trucks and funneled $1.5 million to Clean Energy of Seal Beach, Calif., to build a fueling station.

U.P.S. is not alone. Kenworth, the truck manufacturer, reports several orders in the last few weeks for L.N.G. trucks. Eighteen went to Enviro Express, a company in Bridgeport, Conn., that uses them to haul trash and recyclables. And the truck maker Peterbilt said in January that a trucking company in British Columbia had ordered 50 L.N.G. trucks.

The ports of Los Angeles and Long Beach, Calif., run about 1,000 trucks on liquefied natural gas, but outside of that, only about 300 others are running around the country, according to Clean Energy, a company that supplies compressed and liquefied gas.

Westport Innovations of Vancouver, British Columbia, which makes engines that are certified by the United States Environmental Protection Agency to run on liquefied natural gas, said it had orders for 230 engines in the next 12 months. It has not announced total orders for its past fiscal year, but in the first three quarters it sold fewer than 30.

Chilling the gas into a liquid costs energy, but Clean Energy says that a lot of gas is already being liquefied anyway. Natural gas refineries chill the gas that drillers take out of the ground to separate naturally occurring molecules like pentane, ethane and propane and to make a product that meets the specifications needed for gas pipelines, said James N. Harger, the company’s chief marketing officer.  Clean Energy, which was founded by T. Boone Pickens, is selling an amount of natural gas that is equivalent to a gallon of diesel for $1.25 less, a major consideration in vehicles that use hundreds of gallons a week. But then there’s the $1.5 million cost of building an L.N.G. fueling station with several bays for trucks, Mr. Harger noted.

A spokesman for Westport, the engine company, said the fueling problem was your classic chicken and egg.  “The incumbent petroleum-based fuels have this continental network of fueling stations, and natural gas has that as well, but it’s going through a pipeline to feed people’s homes and the power industry,” he said. The challenge is to furnish it in a form that vehicles can use in the same sort of ubiquitous way that trucks use diesel, he explained.

“The key is to get the number of trucks up,’’ he said.
U.P.S. has about 17,000 big tractor-trailers and would like to switch 1,000 of them to liquefied natural gas, but cannot do so now because the fuel is available in only a handful of places. Production volumes of the trucks are so low that their cost remains high, about $200,000, compared with only about $100,000 for a standard diesel truck, according to Kara Gerhardt Ross, a U.P.S. spokeswoman.

But the company’s demonstration fleet, 11 vehicles shuttling between Ontario, Calif., and Las Vegas, has shown that the trucks can handle the most demanding situations, like hauling multiple trailers over mountain ranges, U.P.S. says.