Much has been written on the recent developments in the revolutionary process of oil & gas extraction via horizontal drilling and “fracking”. The results of these extraction techniques are now clear in the US. The US will import less crude oil, have cheap energy, a long-term supply of low-cost ethylene feedstock for the petrochemical industry and perhaps a new, cleaner-burning, low-cost, transportation fuel for the general driving public. This may change all the rules that the energy and transportation industries have been operating under for the last 50 years. Does it have an impact on Neste Base Oils?
How does low cost natural gas cascade through the US economy? One, it’s a coal killer. Power plant conversion to NG gas from dirtier coal is providing low cost energy to big energy consumers, like manufacturers. This aids in offsetting high labor costs and allow for US manufacturers to be more competitive in the global marketplace. The petrochemical industry is provided a low cost feedstock to make many of the materials used in construction, household and medical industries. Could the NAFTA region replace Asia or even the EU as the largest exporting region for chemicals? What are the ramifications in the shipping industry if that occurs.
In transportation, natural gas (or LNG which has the sufficient energy density for long-haul trucks) will make much larger inroads as a HD engine fuel. It’s cleaner burning and it’s low cost versus diesel results in an overall lower cost to operate that is especially attractive to large fleet owners. The lubricants designed for LNG powered HD trucks have some different elements to manage. LNG HD engines often have a limit on phosphorus to protect the catalyst but many anti-wear additive packages contain phosphorus. In diesel engines soot is produced, resulting in a thickening effect on the oil. This doesn’t occur in clean-burning natural gas engines, so protection from shear loss needs to be designed into the formula without the aid of the thickening effect from soot build up. Natural gas engines run hotter in the combustion process, so the oil will need to be designed to limit the amount of ash produced. Different types of additives will be required to protect against nitration issues. Base stocks used in the design of these engine oil formulations will need to resist oxidation, be low-SAP’s, remain stable at elevated operating temperatures for long periods of time and aid in reaching the reaching the pending fuels mileage standards and emissions targets. All characteristics of Group III base oils.
Transitions in fuel can take a long time. It took more than 40 years for diesel to displace gasoline in heavy-duty trucks in the mid-20th century. But there are so many positive reasons for a shift to natural gas a major source of fuel that the next transition could happen much faster.