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Liquefied Natural Gas in our Energy Future

Carl Lisek

2017 Indiana Conference on Energy Management

8.15.17

eere.energy.gov

Why Clean Cities?

Clean Cities advances the energy,

economic, and environmental security of the United States by

supporting local actions to cut petroleum use in

transportation.

Reduced petroleum consumption

Reduced greenhouse gas (GHG) emissions

Reduced dependence on imported petroleum

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• Fact: Transportation accounts for more than 70% of petroleum consumption in the United States.

• As of 2015, Clean Cities has saved more than 8.5 billion gallons of petroleum.

Benefits: Reduced Petroleum Consumption

U.S. Petroleum Use by Sector

Clean Cities Annual Petroleum Savings

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• Fact: Transportation in the United States accounts for 27% of GHG emissions.

• In 2015 alone, Clean Cities prevented more than 5.6 million tons of GHG emissions.

Benefits: Reduced GHG Emissions

U.S. GHG Emissions by Sector

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• Fact: In 2016, about 24% of the petroleum consumed by the United States was imported.

• Most alternative fuels are domestically produced, which increases energy security and supports the U.S. economy.

Benefits: Reduced Dependence on Imported Petroleum

Country Percent of Imports

Canada 40%

Saudi Arabia 11%

Venezuela 9%

Mexico 8%

Columbia 4%

Top Sources of U.S. Petroleum Imports

Ethanol is produced domestically from corn (shown here), as well as cellulosic feedstocks.

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Local Partnerships: Clean Cities Coalitions

• National network of nearly 100 local coalitions

• 82% of the total U.S. population lives inside coalition boundaries

• Nearly 500,000 alternative fuel vehicles (AFVs)

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Portfolio

Eliminate

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Complementary Framework

Information & Education

Local & National Partnerships

Competitively Awarded Financial

Assistance

Technical & Problem Solving Assistance

Clean Cities coalitions are locally based with the ability to tap national resources.

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Local Partnerships: Stakeholders

• 15,000 stakeholders nationwide

• 52% from private sector

• 48% from public sector

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Information & Education: Alternative Fuels Data Center

afdc.energy.gov

Specific information on fuels, vehicles, technologies, and strategies

Tools

Publications

State-specific information

Fleet-specific information

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Information & Education: FuelEconomy.gov

Find and compare cars

Get driving and vehicle maintenance tips

Calculate fuel costs

Track your MPG

Explore advanced vehicle information

Learn about the ratings FuelEconomy.gov

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• Stakeholder benefits: Hands-on support and assistance developing and implementing a policy tailored to their specific needs

– Education/implementation about the benefits of alternative fuels and technologies

– Indiana Diesel Emission Reductions

– Financial Support/Grant Assistance with MACOG & NIRPC

– Public recognition for high-performance fleets.

South Shore Clean Cities

Northern Indiana Green Fleets: A voluntary program for business and government fleets to gain support and recognition

for implementing alternative fuels, diesel emission reductions and implementing GREEN!.

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Building Technology Bridges to a Clean Energy Future 3

> Hydrocarbons, predominantly methane (CH4)

> High octane rating

> Nontoxic, noncorrosive, andnoncarcinogenic

> Lighter than air - Not a threat to soil, surface water, or groundwater

> Lower ozone-forming emissions than gasoline

> Extracted from gas and oil wells

> Existing pipeline distribution system

> Narrower combustion range & higher ignitiontemperature than gasoline

Natural Gas basics

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Benefits

• Abundant domestic resource

• High octane rating• Nontoxic, noncorrosive,

and noncarcinogenic • Lower emissions• Low and consistent fuel

prices• Proven and established

Considerations

• Reduced driving range on dedicated vehicles

• Incremental vehicle or conversion costs

• Infrastructure availability and costs

Basics: Benefits and Considerations

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Storage Applications Energy Content

Compressed Natural Gas

Stored as a gas in onboard tanks under high pressure

Light-, medium-, and heavy-duty vehicles

1 gasoline gallon equivalent (GGE)

= 5.66 pounds (lb) or 126.67 cubic feet

Liquefied Natural Gas

Stored as a liquid at cold temperatures (-260°F)

Stored in double-wall, vacuum-insulated pressure vessels

Heavy-duty vehicles

1 GGE=

1.5 gal LNG

Basics: CNG and LNG

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• Prevailing viewpoint based on differences in fuel properties and technologies:– CNG is best suited for shorter daily range (<300 miles) return to base applications (e.g.

refuse trucks and transit)

– LNG is best suited long haul applications (e.g., class 8 trailers)

CNG vs. LNG applications

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CNG LNG Implications

STATEhigh pressure gas(2,500 – 3,600 psig)

cryogenic liquid (-259 °F)fueling infrastructure, fill time, tank type/weight, and protective measures for LNG

ENERGY DENSITY 23,000-35000 BTU/gal 74,000 BTU/gal

fuel tank volume/weight/range, payload (LNG for longer distance))

SOURCEpipeline Transport from LNG plant

TEMPERATURE ISSUESassociated with filling tank to full capacity

associated with fuel loss/venting as the tank warms

LNG – frequent use minimizes losses

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Basics: Supply and Price Projections

0

5

10

15

20

25

30

35

40

2011 2016 2021 2026 2031 2036

2012

Do

llars

per

Mill

ion

Btu

Transportation Fuel Price Projections

Motor Gasoline (sales-weighted average, all grades)

Diesel Fuel

Natural Gas

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22

24

26

28

30

32

34

36

38

40

2010 2015 2020 2025 2030 2035 2040

Qu

ad

rill

ion

Btu

Natural Gas U.S. Production Projections

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• Containerized: Turnkey solution with standard storage tank, dispensing, metering, and containment equipment

• Customized: Larger storage tanks, multiple dispensers, other customization

• Mobile: Tanker truck with metering and dispensing equipment

• L/CNG stations: Convert LNG to CNG on site and allow for CNG or LNG fueling

Infrastructure: LNG Fueling

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Vehicles: Applications

Light-Duty• Passenger cars and

light-duty trucks in private and government fleets

• Personal vehicles

Medium-Duty• Vans and shuttles• Airports and taxi

fleets

Heavy-Duty• Refuse haulers• Transit buses• School buses• Long-haul trucks• Street sweepers• Snowplows• Short-haul delivery

trucks

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Benefits and Considerations

Public Health and Environment• Lower greenhouse gas (GHG) emissions

• Lower particulate pollution

• Lower carcinogens

Energy Security• Plentiful in U.S.

• Existing infrastructure

Driving Range• Shorter than gasoline

• Comparable power and speed

Deployment• Proven and established

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Other Considerations: Return on Investment Tools

afdc.energy.gov/tools

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Infrastructure: Station Ownership and Operation

Station Ownership

Fleet Independent Provider

Sta

tio

n O

per

atio

n

Fle

et

Fleet owns and operates station

Fleet works with vendors on station development

Ind

epen

den

t P

rovi

der Fleet owns the station, but

relies on experienced operator

Reduces fleet risk

Usually a 5-7 year contract

Outside development, ownership, and operation

Fleet provides demand threshold

Long-term price agreement

Public access possible

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Offsite, Public Access• Utilize an existing public station

• Operated by retailer, utility, or fleet

• Anchor fleet or pool of multiple fleets

Onsite, Private Access• Exclusive use by fleets• Fast-fill or Convenience of time-fill station

array

Onsite, Public Access• Often located outside of restricted areas

• Benefit from economy of scale

• Promotes public use of NGVs

• Must have fast-fill capabilities for public

Use: Fueling Stations

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Fleet-Owned and -Operated• Fleet works with vendors on station development

• Fleet owns and operates station

Outsourced to Independent Provider• Outside development, ownership, and operation

• Fleet provides demand threshold

• Long-term price agreement

• Public access possible

Fleet-Owned, Contractor-Operated• Reduces fleet risk

• Fleet relies on experienced operator

• Usually a 5-7 year contract

Use: Station Ownership and Operation

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Time-Fill Fueling• Good for centrally-based fleets with consistent schedules

• CNG is dispensed slowly, often overnight

• Lower cost investment

Fast-Fill Fueling• Fueling takes place in minutes

• Necessary for public-access stations

• Good for vehicles with little downtime

Combo-Fill Fueling• Time-fill and fast-fill

• More flexibility in fueling

Use: CNG Fueling

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Mobile Fueling• Tanker truck with metering and dispensing equipment

• Provides temporary fueling option

Starter/Containerized System• Complete fueling station, including storage tank, dispensing,

metering, and required containment

• Turn-key solution

Custom Station• Larger storage tanks

• Multiple dispensers

• LNG and/or CNG dispensing

Use: LNG Fueling

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• Based on my fleet inventory and replacement schedule, what is the vehicle replacement potential?

• What vehicle, equipment, and station development vendors exist?

• Are there fueling stations in my area? Are they public or private? Can I visit?

• What support can my local Clean Cities coalition provide?

• How many vehicles will be fueled each day?

• How much fuel will each vehicle need?

• When and how often will vehicles need to be fueled?

• What are the maintenance facility and fueling infrastructure site development requirements?

• What federal, state, and local incentives are available?

Getting Started: Questions to Ask

Helpful Resource: The AFDC Laws and Incentives Search provides

information about available state and federal incentives for NGVs and infrastructure.

eere.energy.gov

Clean Cities

Publications Natural Gas/LNG Basics

Guide to Alternative Fuel and Advanced

Medium- and Heavy-Duty Vehicles

Clean Cities Vehicle Buyer’s Guide

Business Case for LNG/CNG

Clean Cities Vehicle and Infrastructure Cash-Flow Evaluation (VICE) Model to evaluate the return on investment and payback period for natural gas vehicles and fueling infrastructure

• Alternative Fuel Price Report

www.afdc.energy.gov/publications

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Clean Cities’ Publications

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• DIESELWISE INDIANA

• Due August 31, 2017

• Congestion Mitigation and Air Quality (CMAQ)

• Michigan to Montana (M2M)

• VW Mitigation Program

• OTHER

Funding Opportunities

eere.energy.gov

Alt Fuel Corridor

EVEVIncludes

DCFC and Level 2

50 miles between stations5 miles

from highway

Public stations only (no

Tesla)

CNGCNG

150 miles between stations

5 miles from

highwayPublic

stations only

Fast fill, 3,600 psi

LNGLNG

200 miles between stations

5 miles from highway

Public stations only

HydrogenHydrogen

100 miles between stations

5 miles from highway

Public stations only

PropanePropane

150 miles between stations

5 miles from highway

Public stations only

Primary stations

only

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Next Steps

Outreach Meetings with industry First round nominations webinar (March 7, 2017) Public webinar (after release of 2017 FR Notice)

Future designation process Process to be defined in follow-up Federal Register Notice Provides ability to nominate new corridors or add fuel types to

existing corridors Will provide more specific requirements and longer time to develop

nomination packages

Corridor nominations Can be submitted by ANY state or local official State DOT with jurisdiction over corridor must be aware and

supportive of nomination Collaboration with the US Department of Energy

Continued support from Clean Cities Program/Coalitions & DOE National Labs

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INDIANA OPPORTUNITIES

Agriculture Gas Utilities Power Generation Commercial & Industrial Asphalt Production Exploration & Production Mining Rail Marine and Port Applications

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Contact Information

Carl LisekExecutive Director

South Shore Clean Cities123 Main StreetCrown Point, IN 46307(219) 644-3690 office(630) 207-1760 mobileclisek@southshorecleancities.org

The Role of Liquefied Natural Gas in Our Energy Future

August 15th, 2017

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Who is Kinetrex Energy?

The Savings Potential of LNG

The Wide Range of Uses for LNG

Discussion/Questions

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Agenda

Kinetrex Energy Overview

Kinetrex Energy provides businesses with a more affordable, reliable energy source. Today, Kinetrex delivers that solution from a comprehensive portfolio of products:

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We Take Natural Gas Wherever It Needs to Go

Liquefied Natural Gas

Pipeline Natural Gas

Renewable Natural Gas

Key Customers:

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Kinetrex Energy Overview (cont.)

Based in Indianapolis, Kinetrex is the largest provider of liquid natural gas to the Midwest.  The Company operates two manufacturing plants which provide 24 million LNG gallons of storage capacity

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North Plant

South Plant

North Plant

4536 West 86th Street

Indianapolis, IN 46268

South Plant

3565 Big Four Road

Indianapolis, IN 46203

Kinetrex Energy Overview (cont.)

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Truck Loading Stations:

Simultaneous Loading:

Average Load Time:

Hours of Operation:

Max Daily Load Capability:

Location:

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Yes

35 minutes per station

Open 24/7/365

480,000LNG Gallons (48 truck loads)

3565 Big Four Rd, Indianapolis, IN

2

Yes

35 minutes per station

Open 24/7/365

480,000LNG Gallons (48 truck loads)

4536 W 86th St, Indianapolis, IN

North Plant South Plant

65% of US population within one days drive of Kinetrex Energy

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Reliable Partner

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Connection to 4 pipelines, and the optionality of receiving gas from the Mid‐Continent, Gulf Coast, Marcellus 

and Utica supply basins

Marcellus/Utica Supply Basin

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Mobile and permanent solutions

Safe

Lower operating costs

Reduced emissions

Remote monitoring software

Reduced reliance on oil pricing fluctuations

Lower fuel costs

Integrated Solution

Kinetrex and our Transport and Equipment Partners make the transition to LNG simple

Ref:  Chart Industries, Inc.

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Long Term Price Stability

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$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

INDIANA LNG/PROPANE/DIESEL TRACKER

Estimated Commercial Propane Price ‐ Indiana Commercial LNG as Propane Gallon Equivalent ‐ Indiana

US No 2 Diesel (Wholesale) LNG as Diesel Gallon Equivalent (DGE)

*Commercial Propane Source: EIA Weekly Indiana Propane Wholesale/Resale Price + 30% ****Diesel Source: EIA US No. 2 price

**Commercial LNG Source: Kinetrex Energy actual cost of LNG in Indiana, converted to a Propane Gallon Equivalent *****LNG as DGE source: Kinetrex price less taxes and transportation

***Does not include a cost assumption for propane or LNG equipment

Heavy Duty Trucking

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LNG for Heavy Duty Trucking

Customer:      United Parcel Service

Scope:  UPS has converted several hundred long haul class 8 trucks to run on LNG.  These trucks typically run 350 –450 miles per day.  GP Strategies installed private LNG fueling stations at 5 UPS hubs in the Midwest.

Year: May 2014

• Kinetrex is the largest supplier of LNG to UPS• 10 ‐ 30% reduction in carbon emissions• LNG Savings of at least 50 cents per gallon v. diesel• LNG premium over CNG is less than quarter; 

guaranteed fuel quality• Safest fuel option; LNG is non combustible in its 

liquid state

Project Highlights

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Agriculture

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LNG for Bean Milling

Customer:      Rose Acre Farms

Scope:  Rose Acre is in the process of installing two 16,000 LNG gallon storage tanks and two ambient vaporizers to fuel the boilers at its bean milling plant in Indiana.  Worthington Industries is providing the LNG equipment.

Year: October 2017

• Previously fueled by propane; 2014 polar vortex constrained supply and compromised operations

• LNG reliability and affordability led to decision to switch fuels

Project Highlights

Agriculture

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LNG for Grain Drying

Customer:      ADM/Grainland/Roanoke Grain

Scope:  Three grain drying facilities will rent mobile LNG storage tanks and vaporizers to displace propane for the 2017 harvest.

Year: September 2017

• Customers previously frustrated with high cost of propane and lack of price transparency

• Short term equipment lease allows for positive economics to flow LNG

• Minimal site preparation required to utilize LNG in existing pipes/regulators/burners

• 10‐year historical study for one customer revealed average annual savings of $55k versus propane

Project Highlights

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Power Generation ‐Mobile

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LNG for peaking power generation

Customer:      Longview Power

Scope:  LNG is used as start‐up fuel for coal fired plant when the gas pipeline curtails the power plant.  Thigpen supplied mobile storage, and vaporization, as well as manage the gas flow and pressure to the plant.

Year: Project started in November 2014

• If Longview Power fails to meet peak hour production PJM fine is estimated at $4M/HR

• Customer can manage backup fuel supply without relying on dirtier hydrocarbons

• Thigpen Energy managed 13,300 LNG Gallon Queen Trailer x 12 trailers + 6 Water Bath Vaporizers

• Flowed 1,800Dths/Hour for 7‐10 hours

Project Highlights

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LNG for peaking power generation

Project Highlights

Customer:      Confidential

Scope:  LNG is used as backup to the gas pipeline at a power peaking facility.  Chart supplied storage, vacuum pipe, as well as managing the mechanical installation of equipment.

Year: Project completed in Q3‐2017

• Customer can manage backup fuel supply without relying on dirtier hydrocarbons

• Customer can manage gas contract costs• Chart responsible for installation of skidded 

equipment, tanks, pipe stands, platforms

Power Generation ‐ Permanent

Ref:  Chart Industries, Inc.

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Asphalt

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LNG for Asphalt Plants

Customer:      Walsh & Kelly, Hoover Asphalt

Scope:  Customers operate rural asphalt plants that cannot connect to a natural gas pipeline, and run on waste oil.  Blue Roads Solutions provides lease‐to‐own LNG equipment to displace waste oil.

Year: April 2017

• Waste oil is harmful to the environment, dangerous, and wears down equipment at a rapid pace

• LNG allows for emissions compliance, safety, and drastically reduced operating expenses due to the clean, even burn of natural gas

Project Highlights

Industrial

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LNG for Industrial Applications

Customer:      Cummins Technology Center

Scope:  Cummins tests the performance of its natural gas powered engines with LNG.  Worthington Industries installed an 11,500 gallon tank and ambient vaporizer.

Year: May 2016

• Accurate testing of engine performance requires the ability to measure fuel quality and composition

• Natural gas straight from the pipeline is comprised of a variety of hot gases and heavy particulates which leads to poor engine performance

• LNG is purified prior to liquefaction resulting in high quality, even burning natural gas

Project Highlights

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LNG for Manufacturing Processes with Integrated Vehicle Fueling

LNG to Replace Fuel Oil & Incorporate Vehicle Fueling

Project Highlights

Customer:      Minerals Processing Facility

Scope:  LNG regasification facility, operating 24/7, to enable facility to use natural gas instead of fuel oil for energy intensive processes. A 2nd phase included adding a truck fueling station for a fleet of haulage vehicles.

Year: Phase 2 completion in 2014

• Significant cost reductions and hugely improved environmental footprint

• First ever integration of truck fueling into existing regasification facility

• First LNG installation in state of Vermont

Ref:  Chart Industries, Inc.

Benefits of Purchasing Pipeline Gas from Kinetrex Energy

Affordable– Up to 30% natural gas cost savings versus the utility– Kinetrex expertise and portfolio makes it among the most cost 

competitive gas marketers in the region– Provide products that help customers have budget certainty

Reliable– Kinetrex is the only locally headquartered natural gas supplier in 

Indiana– Kinetrex employees have over 100 years of combined experience in 

the natural gas marketing business– Connected to 4 interstate pipelines with access to gas supplies all 

across the country– Kinetrex is the only gas marketer serving Citizens Gas that has on‐

system storage!

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Discussion / Questions

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