Energy Service Companies Switching to Natural Gas Vehicles and Pumps

The shale gas boom, which started in the Barnett Shale, has produced so much natural gas that prices have remained low. While low natural gas prices are good for consumers, energy exploration and production companies have changed their focus from dry gas plays such as the Barnett Shale, to oil rich plays such as the Eagle Ford Shale in South Texas.

But low natural gas prices mean good news for many, not just the domestic chemical and manufacturing sectors, but for the U.S. job market. More foreign companies are considering moving their operations to the U.S. to take advantage of the lower energy costs, creating more domestic jobs. Even fertilizer manufacturers who had moved out of the U.S. are now moving back.  

Another beneficiary of low natural gas prices is the natural gas vehicle industry.  With natural gas priced around half of the cost of gasoline and diesel on a gas equivalent basis, free market incentives are pushing rapid expansions in natural gas-powered cars and trucks. More and more domestic car and truck manufacturers have announced natural gas-powered vehicles. General Motors is one of the companies that expanded the number of trucks that can run on compressed natural gas (CNG), and Honda has long produced a CNG-powered Civic for U.S. drivers.

This move has not escaped the attention of the energy industry itself. The three largest energy services companies, Halliburton, Baker Hughes and Schlumberger, are spending millions of dollarsto convert their existing pumps and other equipment, which run on diesel, to run on natural gas. 

Reportedly, Caterpillar has developed dual-fuel kits that would allow their engines to run on diesel while idling, and to run on natural gas when they are pumping at high RPMs. Also, it’s been reported that Schlumberger is testing a system using CNG, while Halliburton is using liquefied natural gas (LNG).