Aaron Johnson, President & CEO at Kinetrex Energy

Everything in the U.S. these days seems to be a polarizing issue and everyone is pushed into takings sides. One item that is near the top of this list is the environment. One side believes the environment is in imminent peril and all resources must be dedicated to reversing our course. The other side, if not wholly doubtful of their opponents’ claim, believe the cost of reducing our carbon foot print is too high and not our most pressing priority.

Insert Kinetrex Energy…

We seek every day to improve our environment. At the core of our effort is Hoosier practicality and common sense. That is, it is our intention, at the risk of sounding very naive, to avoid this debate and satisfy both sides. Unlike many environmental initiatives, we know that we can accomplish our environmental goal while at the same time lowering the cost of business.

Our primary line of attack for improving our environment is liquified natural gas (LNG). LNG is manufactured by sourcing natural gas from pipelines and then purifying the gas during liquefaction to a higher methane content. LNG can easily and conveniently be transported to and for the use of long-haul fleets throughout North America. LNG is a high-quality alternative fuel to diesel that is consistent, clean, and refined.

A Cleaner Option

Cleaner burning than other fossil fuels, the combustion of natural gas produces negligible amounts of sulfur, mercury, and particulates. Burning natural gas also produce lower levels of nitrogen oxides (NOx), which are precursors to smog, than gasoline and diesel. Reductions in these emissions translate into public health benefits, as these pollutants have been linked with problems such as asthma, bronchitis, lung cancer, and heart disease for hundreds of thousands of Americans/Hoosiers. LNG provides significant environmental benefits when used as a vehicle fuel versus diesel. Today’s LNG engines, many of which are manufactured by Indiana-based Cummins Westport, reduce NOx emissions by 90%. LNG also reduces greenhouse gas emissions by 20% versus the cleanest diesel engine.

Renewable Natural Gas

The story gets even better if you liquify renewable natural gas (RNG). RNG is bio-methane that is produced by capturing and refining fugitive methane produced from municipal wastewater treatment systems, animal waste (yes Cow farts!!) and landfills. Use of RNG versus natural gas (a great clean fuel in and of itself) further reduces CO2 by an additional 75% to actually being carbon negative, depending upon the source of the biogas. A carbon negative footprint is possible because absent to process to capture and refine the biogas, it would otherwise escape into the atmosphere. Raw biogas typically contains a methane/CO2 content of roughly 50%/50%. Given the current composition of electrical power generation in the U.S. which relies heavily upon coal, natural gas and other fossil fuels, THERE IS NO BETTER AND CLEANER TRANSPORTATION ALTERNATIVE FUEL SOURCE THAN LNG AND PARTICULARLY LRNG.

The Cost Factor

So, one half of the country is now satisfied with these clear environmental benefits – now for the other half. As of the date I’m writing this, the wholesale price of diesel is $1.97 per gallon (the five year average is $2.20), Kinetrex Energy is selling LNG for $.64 per LNG gallon or $1 per diesel gallon equivalent. The story gets even better insofar as we can sell RNG used for transportation even cheaper. Kinetrex can offer these prices because we don’t have a lot of stranded or irrelevant investment, we price our fuel off of the inherent cost of natural gas (not off of what we think our customers will pay given the cost of diesel), and because we are a fully integrated solution that cuts out those brokers that are simply trying to earn a return off of ignorance of the LNG value chain.

The Value Factor

An additional value of natural gas engines versus diesel is that over the life of the engine they have materially lower maintenance costs. Natural gas engines, which do not suffer nearly the carbon deterioration of diesel and gasoline engines, last twice as long and have few systems insofar as they are missing all of the after treatment necessary to limit the damage to the environment caused by traditional engines.

America is baseball, apple pie and Kinetrex Energy!