BNSF, a freight railway, hauls things like grain and oil from North Dakota. Now, ironically, its trains may use natural gas to haul that oil. The reason? Gas is cheap, but how cheap?
“The natural gas, when converted to a liquid would be substantially cheaper,” says Lou Pugliaresi, president of the Energy Policy Research Foundation. “I would say probably less than half. But that is not the whole cost.”
What Pugliaresi means is BNSF will have to shell out some cash to retrofit its locomotives to run on gas. It will need natural special tanker cars and fuel depots.
But David Kotok of Cumberland Advisors says it will be worth the investment. He expects natural gas prices to be low for decades. In fact, he says truckers will be tempted to try natural gas -- especially if the railway’s experiment goes well.
“Start with rail,” he says, "add an engine. Change a train. Change a system. The next one looks at you and says, I’m going to do that too.”
Kotok says the trucking business faces more hurdles. For starters, there aren’t natural gas pumps at many truck stops, but Kotok says that will eventually change.