Levering LNG the Case for Replacing Diesel with Natural Gas for Oilsands Mining Fleets

Abstract

Before the North American shale revolution, Alberta’s abundant natural gas supplies had a steady customer in U.S. markets. But now, horizontal drilling and hydraulic fracturing have increased U.S. oil and gas supplies and depressed prices by allowing for production from large, previously inaccessible shale deposits. With few near-term prospects for new export markets, Canadian gas producers must find alternative end uses, such as diesel replacement. Diesel, on an energy intensity basis, is much more costly than natural gas. Thus high-diesel users can achieve considerable fuel savings if they run their vehicles on natural gas.