Thursday, March 7, 2013

BNSF Railway Looking at Natural Gas Locomotives

The Wall Street Journal reported yesterday that BNSF Railway, now owned by Berkshire Hathaway, is moving forward with a pilot project to use natural gas-powered locomotives in its fleet.  The pilot will begin this fall and will be based on LNG.

It is ironic that one of the biggest carriers of Powder River Basin coal and Bakken Shale oil might become the first train line to move to natural gas power.  If nothing else, building LNG fueling infrastructure in the Bakken region will give producers something to do with all that nuisance natural gas other than flaring it - or bringing it to an already glutted market.

LNG has a number of advantages for a railroad.  The low coast of natural gas is the biggest advantage over diesel.  But considerably lower pollution versus diesel is a significant plus given that railroads will be subject to tighter air pollution standards beginning in 2015. Additionally, early indications are that LNG locos will have a longer range per fueling without sacrificing hauling power.  Hurdles include the growing pains of developing new rolling equipment (with requisite regulatory approvals for the fueling cars) and building fueling infrastructure.  But BNSF seems to think that the upside outweighs the negatives.

Last October, CN Railway announced a pilot program to test a dual fuel locomotive (90% LNG/10% diesel) that is still in process.  Given the upcoming pollution regulations and the work that GE and Caterpillar are putting into LNG locomotives, I wouldn't be surprised to see more railways looking harder at natural gas.

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