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Green logistics: Obama heeds the call for natural gas in transportation

By Jeff Berman, Group News Editor
January 27, 2012

During his State of the Union address earlier this week, President Barack Obama said the White House will take steps to develop the country’s natural gas supply that can last roughly 100 years and could create up to 600,000 jobs by the end of this decade, as well as power trucks and factories that are cheaper and cleaner.

He took that theme a step further yesterday, when he laid out his plan to develop every available source of American energy, which includes the safe and responsible production of the nation’s oil and natural gas resources.

Speaking at a UPS facility in Las Vegas yesterday, Obama stressed that fact that the U.S is moving in the right direction, when it comes to domestic oil production, citing that American oil production is at its highest level in eight years, with 2011 representing the year in which the U.S relied on less foreign oil than in any of the last 16 years. But even with domestic oil production doing relatively well, he said that the U.S. produces only two percent of the world’s oil reserves, which led him to the topic of natural gas.

“Some of you may not have been following this, but because of new technologies, because we can now access natural gas that we couldn’t access before in an economic way, we’ve got a supply of natural gas under our feet that can last America nearly a hundred years,” said Obama. “And developing it could power our cars and our homes and our factories in a cleaner and cheaper way.  The experts believe it could support more than 600,000 jobs by the end of the decade.  We, it turns out, are the Saudi Arabia of natural gas.  We’ve got a lot of it.”

And with such an abundance of natural gas, Obama said it is something the country needs to take advantage of to become energy independent and subsequently lead the world in developing natural gas technology and creating a generation of new energy jobs in which U.S. natural gas resources help make manufacturers competitive for decades.

Obama cited the April 2011 roll out of the White House’s National Clean Fleets Partnership, which was designed to help large companies reduce diesel and gasoline usage in their fleets by meshing electronic vehicles, alternative fuels, and fuel-savings measures into their daily operations. This effort, which focuses to a large degree on replacing gasoline and diesel powered vehicles with advanced technology vehicles or those that run on alternative fuels like electricity, natural gas, biodiesel, ethanol, hydrogen, or propane, now has 14 corporate partners, including, UPS, FedEx, AT&T, and PepsiCo., among others.

As part of the White House’s natural gas plan, Obama mentioned four key objectives for future natural gas innovation:
1-proposing new incentives for medium- and heavy-duty trucks that run on natural gas or other alternative fuels;
2-launching a competitive grant program to support communities to overcome the barriers to natural gas vehicle deployment;
3-developing transportation corridors that allow trucks fueled by liquefied natural gas to transport goods; and
4-supporting programs to convert municipal buses and trucks to run on natural gas and to find new ways to convert and store natural gas.

In his comments at the UPS facility in Las Vegas, Obama said that the proposed transportation corridors are highways that have natural gas fueling stations between cities, akin to the one opened this week by UPS, South Coast Air, and Clean Energy Fuels between Los Angeles and Salt Lake City.

Clean Energy founder T. Boone Pickens has said repeatedly that if the 8 million Class 8 vehicles on the road today in the U.S. switched from diesel to natural gas, that would represent a reduction of 2.5 million barrels in imported oil per day and cut down on the 35 billion gallons of diesel consumed per day by the trucking industry, with a $1-$2 dollar per gallon decrease, too.

A green logistics expert told LM that this plan has tremendous potential for the country’s future energy development roadmap.

“Industry and business leaders all support the use of available energy resources within the United States to make the U.S. less dependent upon foreign oil as well as to increase job opportunities,” said Brittain Ladd, global supply chain consultant for CapGemini. “My recommendation is that there should be a collaboration between business, communities and government to ensure that there is a strategy in place to optimize the energy resources we have available to drive adoption as fast as possible. Additionally, the more the government can provide support to the trucking industry to help cover the costs of converting diesel tractors to run on LNG as well as partner with private investors to create an LNG fueling infrastructure, the greater the success can be achieved. Just as the U.S. government invested in the modern highway system the government can and should make a similar investment in the use of LNG.”

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

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