The trucking industry has had its flirtations with natural gas in the past, so why will the present surge in interest be any different than previous experiences in the 80s and 90s, when the alternative fuel was examined and then just as quickly, abandoned?
Bob Bleaney, vice-president, external relations with the Canadian Association of Petroleum Producers (CAPP) insisted things are different this time around, thanks to advances in technology that have unlocked vast swaths of shale gas. Bleaney was speaking at the first annual Natural Gas Vehicle Infrastructure Conference here this morning.
He said horizontal drilling techniques refined over the past few years have proven to be safe and effective at extracting previously unavailable gas.
In 2000, Bleaney said, there was thought to be a 70-year supply of natural gas, or about 390 trillion cubic feet. By 2010, new drilling techniques increased available supply to 700-1,300 trillion cubic feet, or more than 100 years' supply.
This development will keep natural gas prices low and stable for the foreseeable future, Bleaney said.
"The evolution of shale gas development has been a serious game-changer to the resource base in North America," he said.
The down side to all this for Canadian producers, is that the US is enjoying the same phenomenon and is now the world's largest producer of natural gas. As a result, Canada has seen its exports to the US drop by 16% over the past five years, and has fallen from the world's third largest natural gas producer to the number five spot, behind the US, Russia, Iran and Qatar.
Canada's abundant supply of natural gas, and drying export opportunities, mean producers are looking to develop new opportunities domestically. The most obvious of those is transportation. Bleaney said just 0.1% of Canadian natural gas consumption is used for transportation.
"To me, that means there has got to be a huge opportunity to expand this use," he said.
And it's not just limited to trucking. Bleaney said the rail and marine modes are also beginning to experiment with natural gas. Ironically, he noted, CN is using a natural gas-powered locomotive in Alberta to transport crude oil out of Fort McMurray.
Still, Bleaney acknowledged there needs to be a stronger fuelling infrastructure network if the alternative fuel is to truly catch on. He said there are only five operating facilities in Canada that presently can produce liquefied natural gas (LNG).
"If we're going to see a material movement of LNG use in the transportation industry, there's going to have to be a build-up of infrastructure to support that," he said.
