Widespread incorporation of “fracking” and subsequent media attention has significantly increased natural gas production.

Traditionally, natural gas production was 20 to 24 trillion cubic feet per year. The 2011 U.S. production was more than 28.6 trillion cubic feet. The global supply of natural gas has now increased from 96 trillion cubic feet in 1995 to 142 trillion in 2010.

Excess natural gas production has caused significant reductions in selling price. Natural gas produces roughly one million BTUs per cubic foot. When you compare that to the 6 million BTUs of energy in a barrel of oil, one can conclude that natural gas should sell for somewhere between $10 to $15 per MCF. Instead, it is currently below $2.

Consumers are doing everything possible to increase usage. While electrical power generators have traditionally used about 50% coal, its usage has fallen to 37% as more and more power plants are utilizing natural gas. Gas-fueled power generation has increased almost 40%, bringing its power generation share up to 29.4% (a 20% increase from last year)—and 50% natural gas-fueled power is coming!

I don’t have to mention how much attention has been focused on natural gas-fueled trucks; every truck manufacturer is offering at least one natural gas-fueled vehicle. House Bill 1380 proposes a $64,000 tax credit for incorporation of a natural gas vehicle into your fleet.

But in this rush to utilize natural gas everywhere possible (don’t misunderstand me; I definitely favor the utilization of natural gas fuels), many are ignoring alternate fuels.

We can’t all use one fuel as the solution for all energy problems. We must continue to subsidize alternate fuels R&D. Yes, natural gas looks very attractive at the moment, but this can’t continue indefinitely. For one thing, natural gas producers must continue to drill to keep their financers happy, but we’ve seen an easing of production in order to increase prices enough for the drillers to make a profit. If they can’t stay in business, we will have no natural gas.

Practically every new power plant being proposed will be either nuclear- or natural gas-fueled. It will take years for these plants to come on stream, but they will require significant amounts of natural gas for fuel.
We are becoming a major exporter of natural gas to countries that are willing to pay as much as $15 per MCF for it. The only thing slowing this move down is our lack of liquid natural gas (LNG) shipping terminals on our coastlines, but they are currently being constructed.

So, what is my point? First, I wouldn’t use $2 per MCF as a fuel cost when calculating whether or not your fleet should utilize natural gas-powered trucks. I would do my calculations using double that figure ($4 per MCF). With maintenance savings, it’s still a bargain if Congress enacts any kind of decent tax credit.

I would also not ignore the positive benefits of alternate and more condensed fuel sources. Biodiesel is still a great fuel if you don’t use high concentrations of it in colder climates. Electric vehicles (and hybrids) still make sense if you’re not concerned about range. Hydrogen fuel cells will also be viable some day. Of course, LNG makes good sense if you need more range.

And I don’t see anything replacing diesel fuel for those longer hauls. It’s next to impossible to pack that much energy in that little volume.

As I look at our plethora of fuel choices, I see fleet managers’ choices getting more complex with the use of as many as three to four fuels in their various operations. This alone will help to reduce our dependence on foreign sources of crude. I also predict higher prices for natural gas, but it won’t happen for several years.