RAIL INDUSTRY

There are nearly 140,000 miles of railroad tracks in the US.  The Class 1 railroads - those that have an annual operating revenue of at least $1 million - typically spend billions each year just on diesel fuel.  The use of diesel began in the 1950s and was quickly adopted as the standard in the industry.  LNG could represent an equivalent step change for the industry and promises benefits that could include reduced fuel costs and lower emissions.

Several technologies utilizing natural gas are in development, but dual-fuel trains, which use both gas and diesel fuel, have now been built; those can significantly cut fuel costs per train over the course of a year. The benefits to the rail industry could be significant, as the Class 1 railroads accounted for 7% of all diesel consumed in the US, with major railroads consuming more than 2 billion gallons alone, and all locomotives combining to consume 3.1 billion gallons, according to the Energy Information Administration (EIA).  The fuel savings could potentially outweigh the incremental cost of building LNG-powered locomotives by a considerable margin. Additionally, two of the major manufacturers of locomotives also offer conversion kits, making the transition even more attractive.

The fact that LNG burns cleanly is an added benefit for railroad companies. In 2015, the Environmental Protection Agency (EPA) began a three-part program is designed to reduce emissions from diesel locomotives of all types.  The rule will cut particulate matter (PM) emissions from these engines by as much as 90% and nitrogen oxides (NOx) emissions by much as 80% once fully implemented.  These standards, based on high-efficiency catalytic after-treatment technology for new builds, also will apply to existing locomotives when they are remanufactured.  (40 CFR part 1033)

Fueling the rail industry would be facilitated by the development of an LNG America distributed LNG hub-and-spoke infrastructure network.

KEY STATISTICS

Total Diesel Used in Gallons 3.1 Billion*
LNG Equivalent in Gallons 5.0 Billion** 
*Statistics based on 2012 EIA data
**DGE equivalent for LNG is 1.62



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