EIA report: Potential savings make LNG an attractive fuel option for railroads

Liquefied natural gas (LNG) likely will play an increasing role in powering locomotives in the coming years, according to a recent U.S. Energy Information Administration (EIA) report.

Continued growth in domestic natural gas production and substantially lower gas prices compared with crude oil prices could result in significant cost savings for locomotives fueled by LNG, EIA officials said in the "Annual Energy Outlook 2014" report.

The seven Class Is consumed more than 3.6 billion gallons of diesel in 2012, or 7 percent of all diesel consumed in the United States. The fuel cost more than $11 billion to purchase and accounted for 23 percent of the railroads' total operating expenses, according to the report.

"These railroads are considering the use of LNG in locomotives because of the potential for significant fuel cost savings and the resulting reductions in fuel operating costs," EIA officials said. "Given the expected price difference between LNG and diesel fuel, future fuel savings are expected to more than offset the approximately $1 million incremental cost associated with an LNG locomotive and its tender."

However, other potential factors — including operational, financial, regulatory and mechanical challenges — might impact the railroads' fuel choices and use of LNG, the report states.

To learn more about the Class Is' exploration of LNG usage and the lingering hinderances, follow this link to read an article that appeared in Progressive Railroading's March issue.