Liquefied natural gas is powering four coal-haul trucks at mines in the Powder River Basin, and Wyoming Gov. Matt Mead would like to see more of them.

Liquefied natural gas is powering four coal-haul trucks at mines in the Powder River Basin, and Wyoming Gov. Matt Mead would like to see more of them.

Mead’s energy strategy adviser, Rob Hurless, said a $150,000 study is underway to figure out how to create and sell LNG. LNG is created from natural gas, a plentiful resource in Wyoming, but sells at higher prices.

LNG is natural gas that gets cooled to about 260 degrees below zero, Hurless said. As a liquid, the hydrocarbon’s volume is 1/600th of the gaseous form of the hydrocarbon and is preferred for storing and transportation. In Wyoming, it has the potential for powering large engines, he said.

The study will look at potential consumption of LNG for high-horsepower equipment engines such as mine haul trucks, railroad locomotives and large pipeline compressor stations. Many of those run on diesel but could potentially save companies money if owners switched to LNG if gas prices remain lower than oil over the long term, Hurless said.

The study will also consider the possibilities of constructing LNG plants in Wyoming or setting up smaller, skid-mounted plants throughout the state, Hurless said.

The four haul trucks running on LNG in Wyoming are owned by Bristol, Va.-based Alpha Natural Resources Inc., Hurless said, referring questions on specifics to the company.

Mike Lepchitz of Alpha Coal West in Gillette declined to discuss details, saying that the company has entered confidential agreements with other companies over the trucks. He referred the Star-Tribune to a website that he said contained a presentation about the four vehicles. The presentation was not available online.

Hurless said there are two ways for companies to use LNG in their engines: They can convert engines to run on LNG or they can have the engines run on either diesel or LNG, which gives owners flexibility to switch fuels as prices change.

If more high-horsepower engines began using LNG, the state would need more plants to create it. Currently, ExxonMobil’s Shute Creek is the only natural gas plant that creates LNG. Its products also include methane, carbon dioxide, helium and nitrogen, and there are already customers lined up to buy them, Hurless said.

Since LNG sells for more money than natural gas, a processing plant could add value to a resource abundant in the ground, Hurless said.

“Then you have another market for natural gas, and if that industry is developed in Wyoming, then you’ve done one of the things the governor has in his energy strategy: You’re adding value to a local resource,” he said.

These days, natural gas sells for about $4 per 1 million cubic feet, Hurless said.

Hurless estimated that LNG sells for about $2.50 a gallon.

“All of a sudden, you’re taking a $4 commodity and it’s now worth $25 or $30, depending on what the price is,” he said.

At a recent meeting of the Wyoming Pipeline Authority, which works to get Wyoming's natural resources to market, Hurless was asked about the environmental advantages of LNG over diesel.

“LNG is a little bit better but it’s not dramatically better," he said. "Mostly, it’s driven by the long-term prices of crude.”

About half of the $150,000 study is funded by companies – including coal miners, utilities, oil and gas companies, oil and gas service companies, pipeline companies, heavy-duty natural gas engine manufacturers and LNG plants.

The other half is funded by the governor’s office, the University of Wyoming School of Energy Resources and the Wyoming Business Council, Hurless said. Clean transportation and energy consultants Gladstein, Neandross and Associates of Santa Monica, Calif., are conducting the study. Hurless said that he and Bob Jensen of the Business Council met the consultants last year at an energy conference the consultants put on in Houston.