The US Energy Information Administration (EIA) has projected that LNG would play “an increasing role in powering freight locomotives in coming years”. A report said that continued growth in domestic natural gas production and substantially lower gas prices compared to crude oil prices could result in significant cost savings for locomotives that use LNG as a fuel source.
India is expected to float a global tender soon but costs are expected to be very high. India’s Railway Board chairman Arunendra Kumar has said. The Indian Railways currently operates about 5,000 diesel, 4,500 electric and around 40 steam locomotives. India has the the world’s third-longest railway network after the US and China.
Train services in the big cities are usually operated using electric locomotives, while diesel locomotives are used for long distances and hauling freight. The steam engines are being phased out and are chiefly used in tourist spots in the country.
A move by railways to LNG-powered locomotives would come as good news to countries like Qatar, the world’s leading LNG supplier, as offtake would be increased in the future. It would also lend further credence to Qatar’s marketing of LNG as a clean fuel in these times of environmental awareness.
As far as India is concerned, Russia has expressed keen interest to be a part of the LNG-powered locomotives project. Given India’s close ties with Russia, starting from the days of the erstwhile Soviet Union, the country would appear to have the upper hand against potential competitors like Qatar for LNG supplies. As it is, talks between India and Qatar are still deadlocked over the former’s requirements of more LNG from Qatar.
Fuel prices are among the highest in the world in India and diesel, which is widely used in public and private transport, is heavily subsidised by the government. Even so, diesel costs cut into revenues forcing entities like the Indian Railways to look for cheaper and more fuel-efficient options, in this case LNG.
The EIA report said: “Taken together, the seven major US freight railroads consumed more than 3.6 billion gallons of diesel in 2012, or 7 percent of all diesel in the country. The fuel cost more than USD 11 bn in 2012 and accounted for 23 percent of total operating expenses.”
The EIA said that now, 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.“Given the expected price difference between LNG and diesel fuel, future fuel savings are expected to more than offset the approximately USD 1 mn incremental cost associated with an LNG locomotive and its tender,” said the EIA.