(John Kemp is a Reuters market analyst. The views expressed are
By John Kemp
LONDON Aug 13 Gas-fuelled locomotives are not a
new idea. Plymouth Locomotive Company built the first
propane-fuelled rail engine as early as 1936.
The industry has experimented with natural gas-fuelled
trains on a small scale for the past 80 years without ever
moving beyond the prototype stage.
"Some members of the regulatory, engine supply and fuel
supply communities believe railroads have an opportunity to use
natural gas as a locomotive fuel to help meet emissions and
performance goals," Burlington Northern and Santa Fe (BNSF),
Union Pacific (UPRR) and the Association of American Railroads
wrote in a joint report in November 2007.
"Except for some potential niche applications, the railroads
disagree," they told the California Air Resources Board ("An
evaluation of natural-gas fuelled locomotives").
But less than six years later, BNSF and the other major
operators are sounding far more enthusiastic.
"The use of liquefied natural gas is a potential
transformational change for our railroad and for our industry,"
BSNF's Chief Executive Matthew Rose told an energy industry
conference in March 2013 ("BNSF to test liquefied natural gas in
The 2007 evaluation was written as part of a memorandum of
understanding between the railroads and environmental regulators
concerned about air pollution in and around the rail yards in
The railroads told air-quality regulators that gas-fuelled
trains were not a cost-effective way to reduce emissions of
particulates and nitrogen oxides. It would be cheaper and more
effective to focus on improving the efficiency and emissions
filters on diesel locomotives, they said.
"Decades of research and development activities and
over-the-rail locomotive prototype demonstrations have given the
railroads a great deal of information about the practicality of
using natural-gas fuelled locomotives."
Cost was the crucial issue. According to the rail operators:
"Claims that natural gas-fuelled locomotives will be less
expensive to operate than diesel equipment are unfounded. In
recent years, prices in the North American natural gas market
have been high and unstable."
CLIMATE AND COSTS
Scepticism about gas-fuelled trains was not new in 2007. The
railroads quoted from an even older report written in 1994:
"Railroads believe improved diesel technology is the way to
achieve large emission reductions in a short time period with a
high probability of success and low cost per tonne of emissions
But now BNSF is undertaking a new pilot programme that aims
to put liquefied natural gas-fuelled locomotives on a limited
number of tracks in revenue-service by the end of this year.
"While there are daunting technical and regulatory
challenges still to be faced, this pilot project is an important
first step that will allow BNSF to evaluate the technical and
economic viability of the use of liquefied natural gas in
through-freight service, potentially reducing fuel costs and
greenhouse gas emissions," Rose said.
His comments provide clues about the two factors that have
driven a re-appraisal within the industry.
First, the focus has shifted from local to federal
regulation as the concern has shifted from air pollution to
The California Air Resources Board was concerned only about
air pollution near rail yards, and it could not do much to force
change on the railroads because its powers were mostly
pre-empted by federal environmental regulations.
In 2005, the Air Resources Board reached an agreement with
BNSF and UPRR to reduce emissions from locomotives in the state
but could not go much further.
"The national Clean Air Act has sweeping language protecting
railroads and the interstate commerce they represent from state
interference," the board explained. "Only the most limited
police powers to address nuisances, traffic disruption, or
public safety can be reserved to the states."
But the federal Environmental Protection Agency has now
ruled that greenhouse gases including carbon dioxide are
pollutants under the Clean Air Act and has begun to regulate
Railroads face much stronger pressure to cut emissions, now
and in future, from regulators with far more sweeping powers.
Second, the economics of gas-fuelled trains have been
transformed by the shale revolution. Fuel is one of the largest
operating expenses for the railroad industry, so the industry
has a sharp incentive to minimise fuel bills.
For the 20 years to 2011, the energy-equivalent prices of
diesel and natural gas tracked one another fairly closely. There
was no substantial advantage to using gas, especially once all
the extra conversion costs were taken into account.
But since 2011, the commodity price of gas has been just
one-fifth of the price of diesel for the last three years,
thanks to the shale revolution, and the gap shows no sign of
In 2007, the railroads explicitly warned about the high and
volatile price of gas, and worried it would climb even higher in
future as the United States was forced to import an increasing
share of its gas from abroad.
By 2013, however, the idea of a "gas glut" was firmly
established and led many analysts to conclude gas prices would
remain comparatively low and stable for years to come. Suddenly,
gas-fuelled trains started to look like an attractive way to
save money and cut greenhouse emissions at the same time.
There are still formidable technical and safety challenges
to be overcome before gas-fuelled trains could become common in
The joint report chronicles at least 13 small-scale
experiments with natural gas-fuelled locomotives since 1936,
testing a variety of fuels (propane, compressed natural gas and
liquefied natural gas) and ignition systems (spark ignition,
low-pressure direct injection and high-pressure direct
Burlington Northern, one of the forerunners of BNSF, showed
the most interest, and tested various gas-fuelled trains between
1983 and 1995. UPRR, locomotive manufacturers General Electric
and Electro-Motive Diesel, as well as the U.S. Department of
Energy, have also been involved in engine trials at various
times over the last 30 years.
BNSF was still operating four small gas-fuelled locomotives
inherited from earlier experiments in switchyard service in the
Los Angeles area when the report was written in 2007. The report
observes: "High purity LNG is delivered to BNSF from a fuel
supplier in Arizona by truck, and the locomotives are fuelled
directly from a truck beside the locomotive."
But using gas-fuelled locomotives in marshalling yards,
called switchyards in the United States, is very different from
Experimental results suggest the most efficient and
cost-effective system for line-haul would be to use liquefied
natural gas (because of its higher energy density) and
high-pressure direct injection (because it makes the engine more
Previous trials produced mixed results about the technical
efficiency and cost effectiveness of gas-fuelled trains, a sense
that the technology was tantalisingly close but not quite ready
to be deployed.
There is no guarantee that the BNSF pilot programme will be
any more successful than its predecessors. But the financial
incentives to make it work have never been stronger.
(editing by Jane Baird)