Four years ago, we released a blog outlining the costs of nitrogen gas highlighting that companies across Canada are paying exceptional rates to have nitrogen gas delivered to their facility by a third party. It has since become one of the most visited pages on our website, and it’s time we revisit the topic with updated information and analysis.
As anticipated, the costs of nitrogen gas have continued their upward trajectory resulting in North American manufacturers paying more than they ever have for nitrogen. The delivered nitrogen gas model is facing major headwinds, most notably the rapid increases in fossil fuel prices used for transporting nitrogen around the country which will only continue increasing as a result of federally imposed fossil fuel carbon taxes.
The majority of North America’s large traditional gas supply companies are publicly traded, and it only takes a moment to google the billions of dollars in net profit that these companies are generating annually. Shareholders demand ever-increasing returns, and you can be absolutely certain that the increased hard costs for delivered nitrogen will be passed on to the end users – not taken out of the pockets of the gas company’s shareholders. As multi-billion dollar public entities, these gas companies have a fiduciary duty to their shareholders to maximize profits – and this is in direct conflict with the end users who require nitrogen gas for manufacturing processes.
Purity Gas is continuously collecting data on what nitrogen users are paying for delivered nitrogen. Here’s what we’re seeing today, broken down into three categories based on annual volumes with all costs accounted for (nitrogen pricing, delivery fees, tank rentals, etc…):
Comparatively speaking, Purity Gas nitrogen generation technology allows end users to reliably and safely produce their own nitrogen on-demand, for a fraction of the cost of buying from the traditional gas companies. The only major input cost to Purity Gas nitrogen generation technology is electricity, which has a relatively stable cost in most parts of North America. If we take four common nitrogen purity setpoints, the costs of nitrogen are:
Purity Gas engineers can help you identify exactly what purity level of nitrogen your application requires, if you don’t already know. We also offer a full suite of engineering services, including onsite nitrogen purity testing, nitrogen demand auditing, and advanced performance modeling of nitrogen generation technology installed at your facility which removes all the guess work. Our engineers are here to support your company in the transition from delivered nitrogen to generating your own nitrogen – safely, reliably, and at a significant cost savings to what you’re paying now.
Outright cost savings of Purity Gas nitrogen generation technology isn’t our only value proposition; a significant reduction in CO2e emissions is also achieved by producing your own nitrogen with Purity Gas technology compared to the traditional fractional distillation method used to produce nitrogen by the traditional gas companies. A 2010 study conducted by the European Industrial Gas Institute (EIGA) which was re-validated in 2019, found that the production of nitrogen at a typical Air Separation Plant requires 549 kWh per tonne of liquid nitrogen. This equates to 861.5 M3 of nitrogen gas at standard conditions (21c / 70f @ 1 ATM). Purity Gas nitrogen generation technology produces the same volume of nitrogen gas at high purity with approximately half the input electricity. Then you must factor in the elimination of needing to transport the nitrogen around the in diesel-powered transport trucks, and the carbon emission savings achieved by switching to Purity Gas nitrogen generation technology are even greater. Our engineers can assist you with CO2e calculations for your specific application, to support your company’s internal carbon footprint initiatives.
Once upon a time, factories and manufacturing facilities purchased their compressed air from gas supply companies, just like what’s happening today for nitrogen gas. In fact, you can still buy compressed air in bulk quantities from them if you ask for it. Eventually, the cost of purchasing & operating an industrial air compressor made it more economical for a manufacturing plant to produce their own compressed air supply, rather than continuing to purchase compressed air from the gas company. In modern day manufacturing, virtually every plant that uses compressed air produces their own supply of compressed air in house, with an industrial air compressor. We are absolutely certain that we are in the midst of the same paradigm shift happening today, but in this case it’s the nitrogen gas generation technology making the need for delivered nitrogen obsolete.
If your facility uses nitrogen gas for production, please don’t hesitate to reach out to us – our engineering team will be more than happy to assist you with the exploration of savings that are available for your specific situation at no charge or obligation.
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