Continued growth in domestic natural gas production, along with substantially lower natural gas spot prices compared to crude oil, is reshaping the U.S. energy economy and attracting considerable interest in the potential for fueling freight locomotives with liquefied natural gas (LNG). As part of the staged release of its Annual Energy Outlook 2014 (AEO2014), U.S. Energy Information Administration (EIA) looks at the economics of fuel choice, the issues facing investors and regulators, a discussion about a fuel revolution or evolution, and lays out two scenarios.
Liquefied natural gas in freight rail—revolution and evolution cases
AEO2014 includes two alternative cases that examine the potential impact of LNG in freight rail, based on the diesel revolution and AC traction evolution. The cases also look at the impact of a specific LNG engine technology. The High Rail LNG case represents a revolution in freight rail locomotive fueling similar to that of dieselization in the 1940s and 1950s. After an initial trial period starting in 2017 through 2020, Class 1 railroads take advantage of the favorable economics of LNG locomotive fuel such that after a 20-year period, all freight rail motive stock is converted to LNG capability. The new locomotives are assumed to use high pressure direct injection (HPDI) LNG engine technology, which uses natural gas as the primary fuel and relies on a small amount of diesel fuel for ignition. HPDI engines use fuel at a ratio of about 95% LNG to 5% diesel. LNG-only engines are not expected to be adopted for locomotives.
The Low Rail LNG case represents an evolution in freight rail locomotive fueling similar to the ongoing penetration of AC traction locomotives. After an initial trial period from 2017 through 2020, Class 1 railroads take advantage of the favorable LNG locomotive fuel economics by turning over their engine stocks at an average rate of 1% per year. The new LNG locomotives are assumed to use a dynamic gas blending engine, which uses diesel fuel for combustion until intake temperature rises, at which point natural gas is used. The engines are LNG-capable up to a fuel consumption ratio of 80% LNG and 20% diesel and have the added advantage of being dual-fuel compatible, with the ability to switch back to 100% diesel fuel as needed. The Reference case does not make any assumption about the type of LNG engine used but instead allows LNG to penetrate into freight rail at the average annual turnover rate of new and rebuilt stock experienced over the last decade.
The full issues paper is available by clicking here.