OMAHA, Neb. -- The diesel-burning locomotive, the workhorse of American railroads since World War II, will soon begin burning natural gas -- a potentially historic shift that could cut fuel costs, reduce pollution and strengthen the advantage railroads hold over trucks in long-haul shipping.

Rail companies want to take advantage of booming natural gas production that has cut the price of the fuel by as much as 50 percent. So they are preparing to experiment with redesigned engines capable of burning both diesel and liquefied natural gas.

Natural gas "may revolutionize the industry much like the transition from steam to diesel," said Jessica Taylor, a spokeswoman for General Electric's locomotive division, one of several companies that will test new natural gas equipment later this year.

Any changes are sure to happen slowly. A full-scale shift to natural gas would require expensive new infrastructure across the nation's 140,000-mile freight-rail system, including scores of fueling stations.

The change has been made possible by hydraulic fracturing drilling techniques, which have allowed U.S. drillers to tap into vast deposits of natural gas. The boom has created such abundance that prices dropped to an average of $3.73 per million British thermal units last year -- less than one-third of their 2008 peak.

Over the past couple of years, cheap gas has inspired many utilities to turn away from coal, a move that hurt railroads' profits. And natural gas is becoming more widely used in transportation.


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More than 100,000 buses, trucks and other vehicles already run on it, although that figure represents only about 3 percent of the transportation sector.

The savings could be considerable. The nation's biggest freight railroad, Union Pacific, spent more than $3.6 billion on fuel in 2012, about a quarter of total expenses.