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NPRA comment on T. Boone Pickens’ natural gas plans

Hydrocarbon Engineering,

Following is a statement from Charles T. Drevna, president of NPRA, the National Petrochemical & Refiners Association, responding to testimony on 14th April by T. Boone Pickens at a House Ways and Means Committee hearing on energy issues.

The statement
T. Boone Pickens is engaging in a costly fantasy when he claims that America would benefit by switching from gasoline and diesel fuel to natural gas to power our vehicles. The switch would require a hugely expensive conversion of fuel pumps at convenience stores and service stations around the country, add US$ 6000 or more to the price of a new car, and exert upward pressures on prices consumers pay for plastics and thousands of other products they use every day made from petrochemicals derived from natural gas.

The US Energy Department said in a 2009 report that ‘widespread adoption of natural gas vehicles in the United States is unlikely’ and would be impractical because of ‘significant hurdles’. The report said: ‘In 2008, there were only 778 service stations in the United States with natural gas refueling capability out of a total of more than 120 000 service stations.’

Each compressed natural gas fueling station costs approximately US$ 1 million more than a conventional fueling station. According to the National Association of Convenience Stores, the net profit of an average retail motor fuel station was just over US$ 22 000 in 2008. Absent a massive federal subsidy to pay for the conversion to a natural gas retail fueling infrastructure, Mr. Pickens ‘plan’ is simply a pipe dream with little rational economic or energy policy foundation.

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