5 Myths About Using LNG In Agribusiness

With volatile and unpredictable fuel costs and increased demand for cleaner energy sources, LNG (Liquefied Natural Gas) is fast replacing propane and diesel throughout the agriculture sector. LNG is now establishing itself as the low-cost, low-carbon fuel of choice for many farm operations.

Nevertheless, LNG finds itself the center of a whirl of myths, which target the fuel with an eye on discrediting it in the popular consciousness. Like the vast majority of myths however, separating out the truth from the fiction is like removing the wheat from the chaff to discover the true value of a particular statement as it relates to this abundant fuel source.

LNG has been well known since the first half of the 20th century and been established as a fuel source for everyday commercial use. LNG is natural gas that has been purified and liquefied. This clear, colorless and odorless liquid consists of approximately 95% methane (CH4) with low concentrations of other hydrocarbons (e.g. ethane, propane and butane) and inert components such as nitrogen. As such, it is a clean and affordable fuel, offering stable pricing, high performance and cost savings in every application. LNG is also the safest fuel available in the market.

So… What are the Myths about using LNG in Agribusiness?

1. LNG is too expensive for our operations

As fuel prices continue to rise, profitability in the agriculture industry is being squeezed. Managers are increasingly resistant to accepting higher fuel prices, so they must sacrifice margins. LNG can help reverse this trend.

Due to the large amount of natural gas reserves, natural gas prices have disassociated from oil prices. In the last 20 years natural gas has sold at about two-thirds of the price of oil (per unit energy).

Here are just some of financial benefits of LNG:

  • Costs 20-30% less than other fuels derived from crude oil like propane (LNG cost comparison calculator>)
  • Not as subject to price swings since the raw product cost is only about 30% of the overall cost
  • Long-term hedging opportunities that allow proper budgeting of fuel costs

2. We can’t get LNG to our locations

Natural gas contracts to 1/600th of its original volume when cleaned, cooled to approximately -261 °F and converted into a liquid. As a result, LNG can be easily stored and transported to remote regions, thus allowing for a natural gas “virtual pipeline”. Additionally, since US natural gas supply is plentiful no matter the season, scheduled LNG deliveries can be made 24/7/365. Storage container remote and automated monitoring provides access to fuel levels and generates reordering alerts for deliveries as needed.

Building natural gas pipelines to remote locations is most often cost-prohibitive. With LNG you can get natural gas delivered to your operations whether you’re on the grid or not. When natural gas is converted to liquid form it can be trucked to agricultural operations all over the Midwest, leading to big savings for milling operations, grain drying, and livestock farms. Mobile LNG tanks and vaporizers are available with minimal site preparation, which makes it ideal for temporary or seasonal operations.

3. It’s difficult and costly to set up an LNG system

All Ag operations have different needs depending on their facilities. LNG providers work with you creating a customized solution that is simple to install and maintain. Permanent LNG fueling systems have a small footprint and feed into existing gas lines. LNG field service teams convert your current power source boilers, dryers, heaters, and power generators to run on LNG. Complete turn-key solutions can be provided including equipment, installation, and flexible financing for upfront capital investment.

Seasonal or temporary LNG equipment is also available to serve as your mobile fuel source without long-term storage fees. Mobile LNG systems are designed to meet the high-volume fuel requirements in agriculture facilities creating a “virtual pipeline” while incurring zero or minimal capital expenses. For example, LNG vaporization skids and transport trailers can be brought to grain drying locations with an all-in (no equipment cost) LNG price per gallon cost 25% -30% less than propane.

4. There are safety issues with LNG

LNG has been the safest fuel for the last 50 years. LNG is colorless, odorless, non-toxic, and non-corrosive. Its high ignition temperature of 649 °C (gasoline: 315 °C) and limited flammability range (5 % to 15 % in air) make its unintentional combustion highly unlikely. LNG, if exposed to the air, returns to its gaseous state and quickly dissipates and evaporates into the air versus propane which is heavier than air and does not dissipate easily or quickly. Unlike propane, LNG is not flammable when in a liquid state.

5. There are environmental concerns with LNG

Many Ag enterprises are environmentally conscience and want to be “green” and operate in the eco-friendliest way possible. Natural gas is the cleanest-burning fuel available because it generates 75% fewer nitrogen oxide (NOx) emissions and 30% less carbon dioxide (CO2) emissions compared to other fossil fuels. It also has no environmentally-damaging sulphur dioxide (SO2) emissions and can be obtained from renewable sources such as livestock waste.

The combustion of natural gas does not emit soot, dust or fumes. Unlike crude oil and crude-derived liquid fuels, if LNG spills it does not cause any residual impact on the environment. This is because it evaporates immediately and dissipates quickly into the atmosphere; it does not require any remediation of soil, groundwater or surface waters.

If you would like more information on LNG, visit www.KinetrexAg.com