Change in demand rate needed to develop CNG
The world seems almost to float on giant reservoirs of natural gas, we have learned in recent years, as hydraulic fracturing has freed up vast amounts of gas and revived dormant economies in the Northeast.
Now the next step — finding a way to make greater use of natural gas as a transportation fuel — is before us.
As was the case a few short years ago, we know there is great potential for natural gas, but significant hurdles remain.
We see a role for the Colorado Legislature to clear one of those obstacles by making it easier and less expensive for businesses to offer compressed natural gas, or CNG as it’s called, first to other businesses and perhaps eventually to large segments of the traveling public.
Under the current regulatory scheme, a business wishing to offer natural gas as a fuel must first compress it. It’s an easy-enough process, requiring a compressor and containers large enough to hold enough gas for a few fill-ups.
The problem is that when the business flips the switch to begin compressing the gas, its electricity demand spikes and that spike sets the high level at which the business is charged for the day’s worth of electricity.
To be sure, Xcel Energy has to have a system that can meet sudden surges in demand — that’s why they call it a demand charge, after all — without affecting other customers.
It’s also true, though, that establishing an economy in which clean-burning natural gas plays a greater role in the local and national economy will require some creative approaches and thinking beyond the demand rate.
But the prospect for economic benefit is great. And clean-burning CNG is better for the environment than gasoline.
Some see the demand-rate issue as a chicken-and-egg question: Which will come first, lower prices or more CNG vehicles?
A better way to look at it is the “Field of Dreams” approach.
We know that Americans are in the market for less expensive fuel, but strongly prefer to go where they wish, as they wish. This has historically put us at the mercy of the Organization of Petroleum Exporting Countries It’s galling, as well, that much of the money we send overseas for oil goes to causes that endanger the United States, its friends and allies.
Vast supplies of domestic energy in the form of CNG allow us to sidestep that dilemma and bolster the American economy.
That won’t come easily, however, as the early experience with the demand charge demonstrates.
We urge legislators from the Western Slope to find ways to take maximum advantage of the region’s pre-eminent natural resource. They should work with the fuel industry, the Public Utilities Commission and Xcel Energy to do just that.
If we build it, they — fleet vehicles, semi-trucks, buses and eventually family cars — will come.