A Charlestown company will break ground next month on a 3.5-acre facility in Worcester that will compress natural gas so it can be loaded onto trucks and delivered to industrial and commercial customers without access to pipelines.
The compressor station, developed by Innovative Natural Gas, a spinoff of Charlestown’s Alternative Vehicle Service Group, is believed to be the first of its type in Massachusetts and part of a growing segment of New England’s energy industry.
Several New England companies, including NG Advantage in Milton, Vt., and Xpress Natural Gas in Boston, already compress and transport natural gas, creating a “virtual pipeline” to deliver the cheap and abundant fossil fuel to customers outside utility service areas. Large portions of New England, particularly in the north, don’t have natural gas pipelines, which results in higher heating and industrial processing costs for them.
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Oldcastle Inc., a manufacturer of building materials, has plants in nearly every state, including 130 across New England, many without access to natural gas pipelines. Four of the its New England plants — in Lebanon, N.H., and three Vermont communities — have been using compressed natural gas delivered by NG Advantage.
While the trucked-in version is more expensive than piped natural gas, the company’s switch from oil has cut the fuel costs at these plants by 20 to 40 percent, said Dan Brodeur, New England energy manager for Oldcastle, which has US headquarters in Atlanta. These savings have allowed the company to set lower prices, which has led to more sales and a 2 to 5 percent increase in hiring.
The price of natural gas has plunged in recent years as the controversial technique known as hydraulic fracturing, or fracking, has opened vast reserves in shale formations and spurred a boom in US production. Industrial prices of natural gas have run at least half the price of fuel oil in recent years, according to the US Energy Department.
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But a lack of pipeline capacity in New England has prevented the region from tapping abundant supplies. At least two companies have proposed expanding existing pipelines or building new ones to bring more natural gas into the region, but those projects, costing billions of dollars, are still years away.
Many rural areas, however, are unlikely to ever get pipelines because the relatively few customers don’t justify the costs of extending them. That has put paper mills, hospitals, and universities, often major employers in rural New England, at competitive disadvantages.
“It’s very important for rural parts of the region to have service like this because you start to lose jobs and close factories very quickly if you’re competing with companies on pipelines,” said Tom Evslin, who cofounded NG Advantage with his wife, Mary.
Compressed natural gas is methane that’s pressurized to less than 1 percent of its volume. Compressing is more cost efficient than liquefying natural gas, which is the process used for transporting gas over large distances. Gas in compressed form has been used for decades as fuel for vehicles, but until recently it was rarely used on an industrial scale.
But plunging natural gas prices and new tractor-trailer technology that allows for transportation of four, 40-foot carbon-fiber tubes that can hold larger volumes of compressed gas have helped make the mobile pipeline a lower-cost alternative to fuel oil and propane. Compressed gas also is a cleaner-burning fuel that is less flammable than liquid fuels, and it dissipates quickly if spilled, according to the US Environmental Protection Agency.
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Last year, NG Advantage opened one of the first facilities in the country to compress natural gas for large industrial, commercial, and institutional customers. Evslin, a former high-tech entrepreneur, came up with the idea for the virtual pipeline in 2009, when he was appointed by the then-Vermont Governor Jim Douglas to help distribute Vermont’s share of federal stimulus money. He visited manufacturers and saw that those without access to natural gas were at a major disadvantage.
Evslin’s company opened a $6 million compressor station in Milton, Vt., fed by a Vermont Gas Systems pipeline from Canada. It has also invested $15.5 million in 31 trucks that run daily to 21 customers, including hospitals, asphalt plants, food processors, and commercial laundries.
Cheshire Medical Center, a community hospital in Keene, N.H., recently converted its heating system to compressed natural gas. Paul Pezone, vice president of clinical and support services at the hospital, estimates the conversion will slice nearly a third off the $1.5 million it has been spending on fuel oil annually.
NG Advantage, which plans to expand to other parts of the country, says compressed natural gas could replace 75 percent of fuel oil burned by the industrial sector in New England. This potential market has attracted Alternative Vehicle Service Group, which has built compressed natural gas stations for vehicle fueling for 20 years.
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About two years ago, the company started receiving calls from large facilities interested in compressed natural gas, so it formed Innovative Natural Gas to meet the demand, said Mike Manning, a sales and marketing official for both companies. The company will invest millions in the plant at 40 Quinsigamond Ave. in Worcester, which will compress gas from an NStar pipeline.
The pipeline has enough additional capacity to guarantee uninterrupted supply to several large facilities, even during winter peaks, according to a utility spokesman.
It takes about two hours to fill a truck, which can hold enough natural gas to heat three average-size homes for a year, according to Manning. The trucks will deliver to customers within 100 miles of the station. With demand for compressed natural gas growing, Manning said, the company is looking to “very quickly” build more stations, including one in Concord, N.H.
Lonnie Shekhtman can be reached at Lonnie.shekhtman@gmail.com. Follow her on Twitter @LonnieShekhtman.