Category Archives: CNG Blog

Gasoline Prices Up Again?

Gasoline Prices

 

Since mid January gasoline prices have rebounded from the low price of $1.50 on the futures market.   There have been various factors disrupting the falling prices in spite of historically high inventory levels.  In fact, gasoline prices have gained more than 40 cents per gallon in the last 45 days.  Some factors pushing up prices have been:

  1. Refinery accidents forcing additional plants to slow down gasoline production.  A lot of people are speculating that these accidents occur every time gasoline prices drop below $3 per gallon in California and closer to $2 per gallon across the nation as an excuse to charge higher prices.
  2. The end of the winter schedule for refineries.  They close for maintenance and to reformulate the gasoline in preparation for the hotter summer months ahead.  Reformulation usually adds an extra 20 cents per gallon for most states.  California is an exception as they have an extremely stringent pollution policy which costs about 40 cents more per gallon.
  3. The largest United Steel Workers Union’ strike in 30 years.  Workers are striking at various oil refineries across the nation including Motiva Enterprises which is the nation’s largest oil refinery in Texas that carries a crude capacity of 600,000 barrels a day.  These refineries account for 20% of the national production.  The negotiations are being held up over whether to replace contractors hired for specialized jobs with union members.
  4. The cold weather freezing major water transportation corridors on our nation’s rivers and lakes.  Many of these passageways are frozen solid.  Refineries depend on lubrication oils to operate their machines.  90% of the Great Lakes are frozen over and are blocking most traffic and supplies needed by these refineries to continue processing oil into gasoline.
  5. Terrorist groups like ISIS who make it their mantra to surprise and shock others with their destructive and frightening acts of violence.
  6. Older news resurfacing such as the threat of Iran developing nuclear bombs using long range missiles capable of targeting the US and closer enemies.

I question which (if any of these) catalysts will send gasoline prices back up?  The month of March may just possibly be one of the more volatile months for gasoline and oil prices this year.  Both commodities have spent the last several weeks consolidating and waiting for fresh news to either continue the upwards trend or to reverse the trend downwards.  Many industry experts are reporting record levels of gasoline supplies and they speculate that prices will level off closer to $2.50 per gallon nationwide.  California is an exception as their stricter guidelines for emission reductions and the recent refinery explosions have driven their prices back up to $3.50+ per gallon.  When the reformulated blends hit the market this month we might expect an additional 10 – 20 cent increase per gallon from the current prices.

Gasoline Prices

Technically, gasoline is poised for a spike in price.  The chart formation shows us how gasoline prices have been consolidating  with buy orders on the lower line and sell orders on the top line keeping the price within a defined range.  Traders have been waiting for fresh news to determine the next direction of gasoline.  Either prices will increase and continue the previous trend or we will see a reversal in prices.   If the technical formation holds then we might anticipate a spike in prices accommodated with high volume.  The million dollar question is what will move prices out of this recently developed range?  The Baker Hughes oil rig count is due out later today, perhaps we may pay more for gasoline over the weekend.

 

Oil May Be Ready to Crack

Kramer said it best, “oil is a battlefield” .  It seems that both technical and fundamental news share little to no consensus as to which direction oil prices will trend. ….except that we may be missing a small signal alerting us to oil’s next move.

If you look at the monthly crude oil chart, the last 2 weeks of price activity appear to qualify as an “ascending triangle”.

Crude Oil Prices
April Crude Oil

An Ascending Triangle will have a resistance price.  In our case the April contract for WTI oil has been unable to trade higher than $55 and it has tested this level 3 times.  The reason the price has been met with resistance is that there are a number of sell orders at or around $55 which cause the price to drop each time it is tested.  Eventually the market will run low on sell orders at $55 which will enable the price to break through this price and trade higher.  These breaks are usually accommodated with very high volume.

In the mean time, the lower trend line is slanted upwards indicating higher lows.  For an Ascending Triangle to be validated it must have a minimum of 2 reaction lows (the points that connect the lower trend line) which this formation has.

Ascending Triangles are a bullish indicator, which if the formation holds then we might anticipate a strong break out to the upside.  Many times a news item will facilitate this push.  The latest irrational and self-destructive terrorist actions from ISIS having slaughtered 21 Egyptian Christians in Libya wasn’t enough.  The ongoing threat to Iraq and Libyan oil supplies isn’t enough. West Virginia’s train derailment spilling and exploding over 410,000 gallons of oil into the Kanawha River wasn’t enough.  So what will it take? Will today’s Baker Hughes Rig Count be enough?  My guess is probably not.  We are still producing more oil than is consumed which is reinforcing the selling pressure on oil prices.

How long before the price breaks out of this consolidation phase?  No one knows and is driving a lot of investors and analysts crazy.  As I mentioned in my last Blog post analysts never get enough credit for being correct in their projections and those analysts that make the wrong educated guess get slaughtered by all the armchair players.  However, with out these educated projections how can companies reduce risk and still increase profits?

It’s the waiting that kills everyone.  Meanwhile, gasoline prices are moving higher and instep with oil prices.

Gasoline Prices
Monthly Gasoline Prices

 

Gasoline prices have been consolidating and making slightly higher highs as well.  Only a close above $1.88 will show us that this round of sell orders have been eliminated.

My family and friends  in California can not catch a break.  Just when they finally experienced a few months of lower gasoline prices, the United Steel workers walked out of 9 refineries which make up 13% of US gasoline production.  These workers are fighting for safer working conditions. Last Wednesday the electrostatic precipitators (ESP) in the Torrance refinery near Los Angeles exploded.   The irony of this story is that no one from the Torrance refinery was striking.  In fact the 12-story tall equipment that exploded and released toxic fumes into the nearby neighborhoods was used to reduce particulate matter and ammonia emissions during the refining process. The ESP unit inside the refinery could stay closed for 6 months and take up to a year to be replaced.

California gasoline prices spiked 10 cents higher after the plant explosion.

I guess our friend Kramer should change his statement to “Both oil and gasoline are battlefields”!

***Post Update:  The Baker Hughes Weekly Report for February 20, 2015, counted 48 additional closed rigs from last week which is a 4% drop.  Oil futures dropped 1% (52 cents) on the news.   This makes a total of 461 closed US rigs over the last 12 months.

 

 

Natural Gas Prices at All Time Lows

Today’s session natural gas is trading at it’s monthly low of $2.66, just 76 cents from its record low of $1.90.  Did you know that you can lock in your natural gas fuel prices for the next 5-10 years at today’s historic low prices?  Call today for more information! 321.307.5058

 

Natural Gas Prices
Natural gas is trading just 76 cents from its all time low

 

Natural Gas Prices

 

Natural gas is traded on the New York Mercantile Exchange (NYMEX) and is priced in terms of dollars per mmBtu.

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Cheap Gas

About CNG 

CNG Prices and Stability:

Did you know that a spike in natural gas prices hardly affects the retail costs of CNG?  Natural gas is traded on the New York Mercantile Exchange (NYMEX).  The natural gas futures contract represents 10,000 million British thermal units (mmBtu) at the Henry Hub in Louisiana.  This hub is the nexus of 16 intra and inter state pipelines.  The contract is priced in terms of dollars per mmBtu.   The exchange represents the prices for the next month’s delivery of natural gas.

Gasoline, diesel and natural gas are converted into the energy equivalent for one standard gasoline gallon (GGE).  This means we are creating a platform to display the energy efficiency for each fuel.  We will then look at the costs of each fuel per BTU.  This comparison clarifies what we are actually paying for before of state and federal taxes.

  • 1 GGE = 126.67 scf
  • 1 MMBTU of Gas = 7.74 GGEs
  • 1 DGE = 143.94 scf
  • 1 MMBTU = 6.81 DGEs
About CNG
Click Image to view today’s natural gas prices

You can see that even if the natural gas prices spike from $3 to $6 on the exchange this only increases the price 39 cents per GGE at the CNG fueling station ($.78 – $.39 = $.39)  This is one of the reasons the retail prices for natural gas hardly changed during the extreme storms that brought in freezing temperatures in the north during the first quarter of 2014.  Click here to see where natural gas prices are trading today.

To determine the real price of fuel you need to know how much energy is in every gas gallon equivalent (GGE).  This means that for the same amount of energy you purchase to fill your vehicle what are the price differences between diesel, gasoline and natural gas.

1. First lets look at the energy content in the different fuels

  • Diesel has 129,500 BTUs
  • Winter blends of gasoline mixed with 10% ethanol has 112,500 BTUs
  • Natural gas has 114,000 BTUs

2. Next we will look at the retail cost per gallon for the different fuels

  • Diesel costs $3.00 per gallon
  • Gasoline costs $2.00 per gallon
  • Natural gas costs $1.75 per gallon

3. Next we will compare the price vs. the energy content per 100,000 BTU

  • Diesel is $3.00 per gallon x 100,000 BTU/129,500 BTU/gallon = $2.31/100,000 BTU
  • Gasoline is $2.00 per gallon x 100,000 BTU/112,500 BTU/gallon = $1.78/ 100,000 BTU
  • Natural gas is $1.75 per gallon x 100,000 BTU/114,000 BTU/gallon = $1.54/ 100,000 BTU

 

About CNG Fuel Mileage Compared to Gasoline and Diesel

Fuel Mileage and Vehicle Performance have every thing to do with the British thermal units (BTU) in the fuel, the Technology built into the CNG Conversion System, and the CNG Kit Installer.

  • BTUs: The energy content of liquid fuels like gasoline and diesel is dependent on the season and oxygenated fuel additives that reduce emissions.  
    • A summer gallon of gasoline will typically contain 114,500 British Thermal Units (BTUs)
    • A winter gallon of gasoline contains 112,500 BTUs.    

Blends with 10% ethanol and reformulations with MTBE  both have fewer BTUs than pure gasoline.  

  • Summer blends  with MTBE contain 112,000 
  • Summer blends with 10% ethanol contain 110,210 BTUs 
  • Winter blends with 10% ethanol contain 112,210 BTUs

Natural gas has 114,000 BTUs.

Diesel has 129,500 BTUs.

Because fueling stations don’t have to advertise that they are blending cheaper and lower BTU 10% ethanol mix in their gasoline, most don’t; however, most stations sell the blend.  Ironically, this means that in the summer, vehicles running on CNG more than likely receive 3,790 more BTUs than running the vehicle on gasoline and CNG costs 40% less.

As for dual-fuel CNG diesel  conversions, the mixture of natural gas with air in the cylinders creates a denser and more explosive reaction after the diesel is injected.  Diesel CNG conversion system delivers more power and saves approximately 35 % in fuel savings.

  • Technology: The air fuel mixture will to a large extent determine the efficiency of your vehicle.  CNG Conversion Systems that can duplicate the OEM fuel map settings will provide the best fuel mileage. Quality CNG kits will use powerful processors that read and respond to over 30 million signals per second.
  • CNG Kit Installer:  Tuning the CNG Conversion System properly is essential for a successful installation.  Technicians must be trained and certified in CNG fuel systems installation and maintenance through accredited CNG Conversion Schools to prevent damage to your vehicle’s engine.  If the fuel mixture is off, the conversion can cause severe damage to the valves or catalytic converter.  When installed and calibrated correctly, the majority admit to experiencing more pep and receiving substantially better mileage.

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About CNG Conversion Kits

Everything You Need to Know About CNG Conversion Kits

About CNG Conversion Kits

Aspirated vs Direct Injection CNG Conversion Kits?

  • About CNG Conversion Kits – Aspirated 

    These systems are first generation simple technology. Aspirated kits usually cost less since and are relatively simple and easy to install. They have a closed loop controller that receives feedback from an oxygen sensor to keep the vehicle operating optimally. The performance of these systems is limited because the air intake must be throttled down for them to work properly. Also, aspirated CNG kits tend to trigger the “Check Engine” light which is a common occurrence. This application is intended for older vehicles with a carburetor.

  • About CNG Conversion Kits – Direct Injection

    These conversion systems are the leaders in CNG Conversion Kit technology. They are also known as sequential port injection CNG conversion kits. They utilize a powerful microprocessor (ECU).  This ECU supports the built-in automatic correction and calibration system. These CNG conversion kits use advanced electronics and offer superior performance.  They cost more than aspirated kits but are worth it. They have evolved significantly in recent years. The latest technology in these CNG conversion kits utilize extensive electronic sensors.  These work in sync with the premium CNG injectors.  The 32 bit ECU integrates with the vehicle’s computer. These CNG conversion kits provide the best fuel economy and performance.  A “Check Engine” light is not acceptable with these installations.

About CNG Conversion Kits for Fleets

Dedicated, Bi-Fuel and Dual-Fuel Vehicles?

Dedicated vehicles
  • Run on 100% natural gas
  • Dependent on CNG fueling stations
  • Can not switch fuels if it is overheating
  • Expensive engine re-configurations to accommodate non lubricating natural gas
  • High maintenance costs
  • Reduced torque and HP
  • Reduced mileage
  • High conversion costs
Bi-Fuel and Dual-Fuel vehicles use CNG Conversion Kits
  • Gasoline engines run on gasoline or natural gas
  • Diesel engines runs on diesel + natural gas mixture
  • Doubles the driving range
  • Manually switch fuels while driving at the flip of a switch
  • Automatically switches to the original fuel if the CNG runs low
  • Starts on gasoline or diesel to lubricate the engine then switches to natural gas
  • Low maintenance costs
  • Increased torque and HP
  • Increased mileage
  • Low conversion costs

 

Direct Injection CNG Conversion Kits

  • Gasoline bi-fuel CNG Conversion Kits run on either 100% gasoline or 100% natural gas. A CNG tank is added to hold the natural gas. The addition of another fuel tank doubles the driving range. Bi-fuel conversions greatly reduce your fuel and maintenance costs. Because the fuel combusts completely, your engine stays much cleaner. These conversions also reduce oil and filter changes. The cleaner burning fuel extends the life of your cars and trucks.
  • Diesel dual-fuel CNG Conversion Kits blend a mix of both diesel and natural gas. This greatly reduces the consumption of expensive diesel fuel. Expect an increases your mileage, and a reduction in maintenance of expensive oil and filter changes. The air/natural gas mixture is denser. This denser higher octane mixture creates more power and increased torque. The cleaner burning fuel extends the life of you trucks and buses.

 

Are There Special Maintenance Needs for CNG Converted Vehicles?

Natural gas engines work essentially the same way as gasoline engines. An air-fuel mixture is injected into the intake manifold, drawn into the combustion chamber, and then ignited by a spark plug. Most engine service requirements are very similar and can be handled by a dealer, automotive shop, or trained mechanic. If there is a retrofit repair needed, such as a faulty injector or loose compression fittings, these would be taken care of by the installer.

 

Do Conversions Increase my Maintenance Costs?

Bi-fuel and Dual-fuel CNG Conversions reduce maintenance.  Normal oil and filter changes are reduced in HALF. Dedicated CNG conversions INCREASE maintenance.  Dedicated CNG Conversions double the oil changes and require quarterly replacement of expensive CNG injectors. Using CNG protects the oil viscosity in bi-fuel and dual-fuel CNG Conversions. This causes less wear on various engine parts such as the pistons, valves, and the head walls. The gases  burn more efficiently.  No harmful or filthy carbon deposits are emitted.  Natural gas keeps your oil cleaner longer. Using CNG also extends the life of the engine. Natural gas governs the oil film that collects on the cylinder walls. This containment protects other engine parts. Gasoline and diesel engines are not protected from ash and oil particulates.

 

Benefits to the Vehicle

Trucks & Cars with Installed CNG conversion kits
  • Natural gas carries higher BTU levels than gasoline with additives (125 vs. 90)
  • Reduces the Fuel & Maintenance Costs Approximately 40%.
  • Combusts without self-ignition.
  • Protects your engine from knocking, even on engines with higher compression and efficiency levels
  • Combusts 100%
  • The oil that lubricates the engine is less contaminated
  • There are no sediments
  • Spark plugs stay clean
  • Oil film on the engine cylinder walls are not washed off
  • Combustion gases are not corrosive and protect metals
  • Extends the life of exhaust pipe and silencers
  • Eliminates the scanning actions in the cylinders during fast acceleration
  • No irregularities or backfires with fast takeoffs
  • Converted vehicles may switch from using CNG to gasoline by simply pushing a button while driving.
  • CNG gasoline bi-fuel system doubles the car’s driving range.
  • CNG conversions run smoother and more quietly.
  • Vehicles operate in all terrains, even across mountains. For example, a truck with a 37-ton load drove above 4,800 meters high in the Peruvian Andes in May 2008.
  • CNG works fine under any climate condition
  • Natural gas does not freeze under cold outside temperatures.
  • The CNG conversion kit is fully reversible and can be removed easily
  • The CNG conversion kit can be reused on another vehicle

 

CNG Conversion Kits
CNG Conversion Kits

Three Main Components to a Vehicle Conversion

  1. CNG Conversion Kits
  2. CNG Tanks
  3. NFPA-52 Certified high pressure parts

The CNG tank can be mounted in several places. Most popular locations are in the trunk or in the bed of the truck. A high pressure fuel line is attached.  This line transports the methane passed a filter.  The cleaned gas continues to the engine department.  Here the natural gas is passed through a reducer.  This 2-stage reducer will drop the natural gas pressure from 3600 PSI to 36 PSI. The natural gas continues through low pressure hoses to the injectors.  These specialized CNG injectors dispense the fuel.  This process is controlled by the CNG conversion kit’s ECU which is programmed to match the vehicle’s original fuel map. Sensors and computers adjust the fuel-air mixture for peak performance. CNG conversion kits do not reduce your car or truck’s performance.

Fueling at CNG stations is the same as gasoline or diesel.  It also takes the same amount of time. The added CNG tank will double your driving range. You still need to use gasoline as this is required to start, lubricate, and warm the vehicle. CNG conversion kits are programmed to protect against excessive heat, and sudden changes in driving conditions. Should you need to break heavily, suddenly speed up, or hit a steep hill your fuel system will automatically switch back to gasoline for the needed additional power.

Converted vehicles work just like the original. Adding the new fuel system is completely non-invasive and easy to reverse. Sequential port injection systems from trusted manufacturers do not alter or interfere with any of the original engine manufacturer (OEM) factory settings or fuel system nor do they tamper with any engine devices or controls. Because there is no tampering, there is no violation with anti-tampering laws.

 

Will I Receive the Same Fuel Mileage and Vehicle Performance?

Against popular opinion, methane contains more British Thermal Units (BTUs) than gasoline. The energy content of gasoline is dependent on the season. It’s also changes when additives are included.  Oxygenated fuel additives like methyl tertiary-butyl ether (MBTE) is used to reduce emissions.  Ethanol is a popular cheap low energy additive.  Ethanol blends are used in most gas stations.

BTU levels for gasoline
  • 114,500 for a summer gallon of gasoline w/ no additives
  • 112,500 for a winter gallon of gasoline w/ no additives
  • 112,000 for summer blends with MTBE
  • 110,210 for summer blends with ethanol
  • 112,210 for winter blends with ethanol
BTU levels for natural gas
  • 114,000 year round
BTU levels for diesel
  • 129,500

The clear winner and most expensive is diesel with 129,500 BTUs.  Due to the government subsidizing ethanol, it is much cheaper to use. Gas station owners want to save money.  The stations don’t have to advertise if their gasoline is blended.  So most don’t.  This means that most likely your only getting 112,210 BTUs this winter. Vehicles running on natural gas receive more power with 114,000 BTUs.

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