Explore Newsletter: November 2012
So far, the company has transformed about 400 field vehicles to operate on compressed natural gas (CNG), with the goal of converting 80 percent of its 1,000-plus U.S. fleet by year-end 2015.
To support its natural gas-powered fleet, which should swell to about 400 vehicles by the end of the year, Apache currently operates 15 CNG fueling stations in the United States. By year-end that number will tally 20, with six available to the public.
“Four years ago, Steve Farris (chairman and chief executive officer) and Roger Plank (president and chief corporate officer) had a shared vision that Apache should become a leader in promoting natural gas as the alternative transportation fuel of choice,” said Frank Chapel, director of Natural Gas Transportation Fuels. “That vision is becoming a reality.”
As a significant producer of natural gas in North America, Egypt, Argentina and Australia, Apache is engaging policymakers and communities to increase their awareness of the benefits of natural gas, a cleaner-burning and more economical alternative to gasoline.
The company has taken a leadership role in America’s Natural Gas Alliance (ANGA), the leading industry organization advocating for greater use of natural gas in transportation and power generation. It also is actively involved in other national organizations supporting natural gas, including NGVAmerica, the ANGA/American Gas Association collaborative “Drive Natural Gas Initiative,” and select Department of Energy Clean Cities coalitions.
Apache is a charter member of the Greater Houston Natural Gas Vehicle Alliance, which was formed in August 2009 by Apache, Anadarko Petroleum Corp., Southwestern Energy and CenterPoint Energy in partnership with the University of Houston Hobby Center for Public Policy. The Greater Houston NGV Alliance is a broad-based collaboration of private and public interests dedicated to raising awareness of natural gas vehicles to policymakers and the public.
“These collective efforts have firmly established Apache as an industry leader in promoting natural gas usage,” Chapel said.
Worldwide, natural gas is gaining widespread acceptance as a transportation fuel, with nearly 15 million natural gas-fueled vehicles in service. It is anticipated that about 20 million vehicles will be natural-gas powered by the year 2016.
In the United States, about 120,000 CNG vehicles are in use, which offset the use of nearly 360 million gallons of gasoline in 2011. Despite CNG’s $1.50 — $2 per gallon cost advantage at the pump, a shortage of refueling infrastructure has limited demand for additional CNG vehicles. There are only about 1,000 CNG fueling stations in America, about half of which are open to the public.
Apache is trying to change that. The company plans to open a total of 20 domestic CNG stations by year-end. Of those, six fueling stations will be open to the public, including the Tulsa, Okla., and Lafayette, La., locations, plus stations in Texas in Houston, Andrews, and two in Midland.
“Natural gas is an extremely important source of energy for reducing pollution and maintaining a clean and healthy environment,” Farris said. “In addition to being a domestically abundant and secure source of energy, the use of natural gas also offers a number of environmental benefits over other sources of energy in the transportation and electric generation sectors.”
In addition to the 15 operating stations, Apache donated a CNG fueling station to the city of Houston for its Ecopark Fleet of shuttle buses at Bush Intercontinental Airport. The fleet of CNG-powered buses transport passengers between the city’s economy parking lots and the airport.
Besides fueling its own fleet vehicles, Apache plans to use more of its CNG stations to help fuel other private fleets. The company has signed commercial sales agreements with two companies at its stations in Elk City, Okla., and Chickasha, Okla., fueling about 25 CNG-powered trucks. It hopes to expand the practice to its other fueling stations, making them more economical to operate and promoting CNG use among other private fleets.
Apache also hopes to broaden its CNG fleet program to other operating regions. The company is exploring the feasibility of converting its fleet vehicles in Canada, Egypt and Argentina to natural gas power.
To promote CNG among its U.S. employees, the company is offering the Apache Employee CNG Vehicle Incentive Program. The program provides two significant incentives: Free CNG for the first $5,000 of CNG fuel purchases at Apache CNG stations or any public-access stations; and reimbursement for half of the additional cost of the CNG-dedicated or CNG-converted vehicle from either Apache or state incentives. Apache is also in the process of expanding the employee incentive program outside the United States.
Only a handful of employees have joined the vehicle incentive program, but Chapel said he expects the numbers to rise based on the many inquiries his office has received and as more public access CNG stations open, including one adjacent to the company’s Houston headquarters set to debut by year end.
Further extending its natural gas reach, Apache has begun a pilot project to use natural gas to power hydraulic fracturing operations near Elk City in the Central Region. Hydraulic fracturing is a process in which water, sand and small amounts of chemicals are injected underground at high pressure to release hydrocarbons locked in tight shale and other formations.
“Burning natural gas is much cleaner, environmentally friendly and less expensive than burning diesel,” said Mike Bahorich, executive vice president and chief technology officer. “I anticipate that we will expand the project and continue to replace diesel with natural gas.”
Apache is using newly developed bi-fuel kits attached to frac trucks that enable it to power its hydraulic fracturing operations with a fuel mix of up to 70 percent natural gas and 30 percent diesel. Combined with a natural gas pipe bolted to the front of each frac truck, the company is using quick connects to move more easily from one well to another.
Chapel said his CNG team, including Mark Bruchman, general manager of operations, Tim Tomlinson, NGV operations manager, and Donald Sohrt, NGV field supervisor, is constantly looking for new venues and partnerships to promote the use of natural gas. The two public-access CNG stations set to open later this year in Midland will be located at Stripes convenience store locations, which also offer conventional fueling.
“It’s a great way to promote CNG by pairing CNG fueling station infrastructure with conventional retail fueling stations and convenience stores,” he said.
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