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Sunday, January 22, 2012

Shreveport: The Auto Capital of the World?

This blog has focused on the development of the Utica Shale from a more or less provincial perspective, essentially documenting what the potential good it can do for Ohio. From time to time the Marcellus Shale is mentioned when it effects Ohio such as being the chief reason for the incipient rebirth of Youngstown's steel industry. The Utica is at newborn age, and the Marcellus a toddler but the venerable Hayneville has been prominent since 2008. The Hayneville Shale, located in northern Louisiana, Arkansas, and Texas is the largest shale gas field yet developed and it is in its infancy but its impact has been so profound that a major producer of methanol announced that it had secured land in Louisiana and was weighing moving an idle plant in Chile to the site, a pending decision driven in large part by the state's record gas production and steady shale reserves.

As the industry eyes the export market for the sudden surplus of natural gas work has begun on two new ocean transports. When these ships are completed in Gulfport, Mississippi they will be the only natural gas powered ships in the US merchant marine. Fearing that drilling will decline if the price of gas drops further the gas industry is busy trying to find domestic uses for this cheap and abundant fuel. The idea of producing natural gas powered automobiles in Louisiana is gaining attention although no concrete proposals have yet appeared.

Sure, you say Shreveport will be the next Detroit and Bobby Jindal will be the next Henry Ford. First, Bobby Jindal probably won't be a player unless he puts up his own money. Second the participants in the conference where thinking along regional lines for the launch of the automobile. They imagine they can put enough service stations in place in Louisiana and increase auto production as natural gas fuel stations move across the country. Presently a ten gallon fill up of the natural gas equivalent of gasoline would cost $21.50 compared to $35. for ten gallons of gasoline. At present only Honda produces a natural gas powered vehicle which was reported here. If other automakers do not want to compete in this market the free market dreamers in Louisiana could find a niche that has an awesome upside potential as natural gas becomes abundant in the midwest. Henrik Fisker was an European auto designer who owned no production facilities and had never manufactured so much as a Vegematic but with a $529 million DOE loan did eventually manage to produce an electric car. A group of wealthy investors could hire the expertise and find the idle industrial capacity for much less, not to produce a bauble for the rich and famous but rather to produce a economical car or truck suitable for individual use in a limited locality. There are eight natural gas fueling stations in Louisiana, including three open to the public, and plans under way for 15 more. "If you build it, they will come."

As wild and futuristic as this idea sounds, people in Ohio and Pennsylvania may soon be dreaming the same dreams.

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