Natural gas fueling plans may spur vehicle growth
NEW ORLEANS (AP) — The United States has record supplies of natural gas and plenty of reasons to promote natural-gas powered cars, but consumers, manufacturers and fuel suppliers haven't shown much interest.
Now, a major natural gas developer's plans to vastly increase the number of truck stops that offer liquid natural gas could help boost its use in the vehicles that burn the most fuel, while promoting its availability to a wider market.
Lots of natural gas is available, if U.S. drivers decide to use it. In just a few years, domestic natural gas supplies have increased by trillions of cubic feet through shale finds, boosting the supply to the point where plans are in place to export part of the overflow.
The growth of natural gas vehicles in the United States so far has been dominated by fleets of buses, taxis, and garbage haulers. Only one natural gas car is commercially produced in the country: the Honda Civic GX, recently renamed the NG. It has sold a grand total of about 13,000 in 13 years of production.
The reasons for the lackluster sales of natural gas cars are many: the fuel is only available at a handful of public stations, tethering the vehicles within a certain distance of a fuel source. And even though the pump price of natural gas can run $1 to $2 less per gallon equivalent than gasoline, natural gas vehicles carry a higher sticker price.
The focus for the natural gas vehicle industry in the United States has been the fuel-guzzlers: commercial vehicles, especially tractor-trailer rigs.
Rich Kolodziej, president of the trade association NGV America, says that makes sense in terms of overall fuel usage. He said a driver who puts 12,000 miles a year on a car at 25 miles to the gallon will use about 500 gallons of gasoline annually. But a diesel-driven 18-wheeler can easily go 120,000 miles a year. At six miles per gallon, that comes to 20,000 gallons.
"If you're trying to reduce foreign imports of oil, you're trying to reduce greenhouse gases and emissions in urban areas, where do you put your effort? You put it on the big vehicles," Kolodziej said.
For reasons of tank space, liquid natural gas is used by commercial trucks, while compressed natural gas is the fuel of choice for cars.
According to the international trade association NGV Global, there are 12.7 million natural gas vehicles in the world, including 6.8 million in the Asia-Pacific rim, 4.2 million in Latin America, 1.4 million in Europe, and 122,000 in Africa.
The U.S. has just 112,000 of them — less than 1 percent of the global total, and less than a tenth of 1 percent of the 253.7 million vehicles in the U.S.
Most of them are in fleets.
"The big reason that they work well for fleets and not the average person on the street is that most fleet vehicles are used for relatively short trips," said John O'Dell, senior editor of Edmunds.com, which follows the vehicle industry. "They go back to the barn in the evening where they have a refueling station that can handle them.
"There is not a really good fueling system in this country," O'Dell added. "You have to have the infrastructure out there to convince people to buy natural gas cars."
Kolodziej said that there are about 180,000 gasoline stations — and only about 1,000 locations to fill up with natural gas.
But that may be changing.
The T. Boone Pickens-backed Clean Energy Fuels Corp. is embarking on a major expansion of natural gas fueling and plans to add liquefied natural gas pumps at 150 truck stops nationwide over the next 24 to 36 months.
"We've mapped out a strategy to cover every major interstate in the domestic United States," said Clean Energy Fuels chief marketing officer James Harger.
Clean Energy currently provides fueling services for over 500 fleets consisting of about 22,000 vehicles, such as transit buses, taxis, shuttle buses, school buses, municipal cars and garbage trucks, Harger said.
Still, Clean Energy has its eyes firmly focused on the long-haul trucking industry with its truck stop expansion plan.
Harger and other natural gas proponents are putting stock in pending congressional legislation that would provide tax credits to cover 80 percent of the cost difference between a liquid natural gas tractor-trailer and the diesel variety. Harger said the five-year bill probably would cost about $1 billion a year. The U.S. spends over $1 billion a day on foreign oil.
"This will help jump-start this industry," he said.
C.R. England, a major refrigerated carrier, recently started using five liquid natural gas-fired tractors for its rigs in southern California. The company has about 4,000 diesel tractors, said Tracy Brown, a company operating director. He said the region was chosen because of the ready availability of dedicated Clean Energy refueling depots. The rigs are being used in the Los Angeles region and on a route to and from Las Vegas, Brown said.
Although he would not reveal what Salt Lake City-based C.R. England paid for the liquid natural gas tractors, he said fuel cost savings could lead to overall savings within a year or two. Depending on diesel prices, the company saves $1.50 to $2 per gallon equivalent on liquid natural gas, he said. At the same time, fuel usage is about the same in equivalent diesel gallons.
"They are much cleaner, they are much quieter," Brown said of the new tractors. "We haven't noticed any power reduction from the diesel engines. We're very pleased with these."
As Clean Energy expands its network of public refueling, "it will be more advantageous to have natural gas vehicles on the road," Brown said.
Honda Motor Co. is expanding sales of its Civic NG. The NG carries a basic sticker price of $26,155, while its gasoline counterpart, the Civic LX, lists at $20,505.
Until this model year, the GX had only been offered as a private vehicle in dealerships in California, Oklahoma, Utah and New York. Sales will be expanded for the next model year to 37 states, mostly to dealers within 20 miles of a public fueling station, said Honda spokeswoman Jessica Fini. For the first time, the car will be advertised nationally and will offer a navigation system and an upgraded audio system.
"We think we are expanding the car at the right time with the expansion in public infrastructure," she said.
Honda's goal is to boost sales from about 1,000 cars annually to about 2,000, Fini added — still a tiny fraction of the 259,000 gasoline-powered Civics that Honda sold in 2010.
Gene Paulsen, an aerospace engineer from Gilbert, Ariz., and his wife are on their second GX. They bought their first one in 2000 when the state offered tax credits for choosing the natural gas version of the Civic. They sold it earlier this year to a California woman.
He said his wife now commutes in a used GX he bought in 2009. They mostly refuel from a costly home refueling appliance, and have added a second fuel tank to drive longer distances.
"It works really well for us," he said. "But the fueling infrastructure isn't very good in Arizona. Until you add more fuel capacity to the thing, you're kind of stuck."
Paulsen said fuel for the GX costs about $1.50 per gallon equivalent, calculating the draw on his home's gas system, the cost of periodically maintaining his $10,000 refueling pump and the power cost for running the pressure pump to fuel the car.
"We wouldn't have done this if it was our only vehicle," Paulsen said.