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Answers to FAQs about compressed natural gas (CNG)

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This is a guest blog by Matt Smith, executive vice president of sales and marketing for Xpress Natural Gas (XNG). XNG operates the largest fleet of high-capacity all-composite compressed natural gas (CNG) trailers in North America. The company currently offers both liquefied natural gas (LNG) and CNG service across New England and New York, with customers ranging from industrial manufacturing to colleges to hospitals to local utilities. XNG also provides service to eastern Canada, and is the only provider both licensed to export trucked CNG by the U.S. Department of Energy, and licensed to import trucked CNG by the National Energy Board of Canada.

With the recent partnership between XNG, and Direct Energy Business to bring natural gas to off-pipeline businesses and municipalities in New York, I wanted to take a moment to answer some frequently asked questions about CNG. 

What is CNG?
CNG is natural gas that has been compressed to less than 1% of its volume. It’s compressed into containers for transport, and then decompressed on site back to its original volume at the customer site.

What’s the difference between CNG and LNG?
LNG is natural gas in a liquid form. To make gas into a liquid, it must be cooled. In the case of natural gas, that means cooling the gas to approximately -260° F. As a liquid, more natural gas can be transported on a single truck, which makes LNG a cost-effective solution for industrial customers that typically use 500,000 gallons or more of fuel annually with year-round energy demands.

CNG is natural gas that has been compressed at high pressure. Compared to its liquid form, compressed natural gas enables our company to transport about half the equivalent amount of energy in each truck. However, we typically make fewer and shorter trips to the customer using CNG, which makes CNG cost-effective for customers that use 75,000 gallons or more of fuel a year. CNG has the added benefit of better serving customers with seasonal demands.

Both LNG and CNG are effective ways to transport gas by truck.

CNG is referred to as a lower cost alternative to fuel oil. How much lower?
Current XNG customers report savings that range from 20% to 40%. An added benefit is a 30% reduction in carbon emissions, as well as significant reductions in particulate matter and sulfur dioxide compared with traditional fossil fuels. 

What is the major benefit of using trucked natural gas?
XNG and Direct Energy can bring the savings of natural gas service to customers faster and at a price comparable to or better than a pipeline. Trucked gas has the added benefit of servicing areas where it’s uneconomical for a pipeline to be built. 

When will CNG be available?
While we are already servicing New York with gas from out of state, we expect our eastern upstate New York terminal to be completed in fall 2014, at which time CNG will be widely available for heating customers ahead of the winter. Customers do need to make some changes to their heating systems ahead of time in order to be able to use natural gas. That timetable depends on multiple variables including the configuration of the customer’s physical plant and current fuel system.

How easy or difficult is it to convert?
As with any energy conversion, some new or upgraded heating equipment is likely required. We work with each customer to design and install a system that is sized to meet their needs, with the potential to grow with them. We will also help customers work with their current HVAC company to make any other necessary changes to their current heating equipment. 

How simple is the delivery of CNG?

  1. Connect to Pipeline: XNG/Direct Energy connects exclusively to interstate pipelines providing the lowest cost to our customers.
  2. Transport: XNG/Direct Energy dispenses natural gas into lightweight, high capacity trailers, eliminating time and cost involved with on-site filling.
  3. Connect to Customer: XNG/Direct Energy connects to custom manifold skids, built at our state-of-the-art facility. 

How does this partnership make New York State more competitive?
This partnership gives many New York State industries, businesses, and institutions energy options that they don’t currently have. With the lower energy costs, they can better compete. Lowering energy costs gives companies and institutions the ability to reinvest those savings in the company and its employees, which is an investment in New York State. As a state we can keep and attract more business and industry, which strengthens our communities and our state economy.

Is there any other company currently offering CNG in New York State?
There is no other company currently delivering trucked natural gas in New York State. 

How stable is CNG pricing?
With the development of U.S. shale gas reserves, the United States is rapidly forecast to shift from a net importer to a net exporter of natural gas. An abundant, reliable supply is keeping prices stable. The U.S. Department of Energy has forecast the average price of natural gas to be stable around $4 per MMBTU for the next several decades. 

Is it safe?
Trucked gas is extremely safe. Our trailers are DOT-certified and must meet rigorous federal safety standards. The gas is a lighter-than-air vapor, so any release floats up with no spills and no clean-up like a liquid fuel. In the unlikely event of a sudden loss of pressure, the trailers are designed to safely discharge the gas up and away from the vehicle for maximum safety.

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