An FT article last week lauded the intent of General Electric and Chesapeake Energy to form an alliance to promote the use of natural gas as a fuel for cars and trucks.
The intent is to develop gas re-fuelling infrastructure with a target to add 250 compressing and recharging units principally at gasoline filling stations. Currently there are about 1,000 natural gas fillings stations in the US, according to an article in the South Bend Tribune; but only half of those are available to the public, with the rest operated by local governments or private companies to refuel buses and other fleet vehicles.
Compare that to regular gasoline fuelling stations of which there are said to be some 159,000 outlets in the US.
Indeed, there is only one car produced in the US to run on natural gas, the Indiana-built Civic Natural Gas Honda. Around 13,000 have been sold since the car first went on sale in 1998, mostly to fleets. With such low production runs, currently about 4,000 per year, Honda can’t be making any money out of the model even at the high premium over the gasoline versions — some $10,000 on the base model — but should be applauded for sticking to their script. They clearly realize natural gas cars are going to be, like electric vehicles (EVs), a long-haul technology.
But why would Honda, General Electric, Chesapeake and the big three automakers (GM and Chrysler are to follow Ford with natural gas pickups) be supporting what must be the least well-known among the alternative fuel sources?
Putting initial vehicle costs to one side for a moment, for an equivalent energy content, crude oil is roughly seven times the current price of natural gas in the US.
GE and Chesaspeake are quoted as saying that at today’s prices, a vehicle driving 25,700 miles a year would save $1,500 a year from using natural gas rather than gasoline, while a Channel 13 News report interviewed a canny individual who had plumbed natural gas supply to a compressor in his own home for about $3,000, so he could fill up his car’s natural gas tank at home for an estimated $7 compared to over $50 for gasoline.
The environmental lobby is torn. Diehards prefer EVs for their zero emissions, conveniently ignoring the fact that they require power stations to generate the electricity by saying that if the power comes from a wind turbine or solar farm, it is almost zero emissions. In reality, of course, that is rarely the case; but the attraction of natural gas is that (although not pollution-free) it is much less polluting than gasoline.
According to the State of California, quoted in Earthlinktech: “Typical CNG vehicles can reduce smog-forming emissions of carbon monoxide by 70%, non-methane organic gas by 87% and oxides of nitrogen by 87%. Also, CNG vehicles typically have 20% fewer greenhouse gas emissions than gasoline powered cars.”
It is no surprise to hear that a government keen on subsidies is talking about extending the electric vehicle (EV) tax credit, currently worth $7,500 to $10,000, and including cars that are designed to run on natural gas, such as Honda’s CNG.
Honda and Ford — who produce a natural gas pick-up truck — are soon to be joined by new models such as Chrysler’s Ram 2500 Heavy Duty pickup (due out in July) and GM’s Chevrolet Silverado and GMC Sierra 2500 HD (due out later in the year). GM’s trucks are said to overcome one of the drawbacks of early natural gas autos — that of limited range.
Fitted with both gasoline and natural gas tanks, and an engine that will switch from one to the other, the new GM trucks are said to have a range of 650 miles — pretty good for such a large gas guzzler.
New models and government subsidies may help overcome buyer reluctance regarding range and buying price, but worries of fill-up points, as with EV vehicles, remain a major barrier to wider acceptance. Another of President Obama’s initiatives is a proposed $1 billion National Community Deployment Challenge, which is said to include support for the development of up to five regional liquefied natural gas “corridors,” where “alternative fuel trucks can transport goods without using a drop of oil,” the White House is reported as saying.
This proposal underlines the focus for most in the industry that natural gas will remain a fuel more suited for fleet vehicles, or those on known routes, than private medium- to longer-distance users who require greater flexibility.
Still, clearly Chesapeake and other natural gas producers like them will be hoping that any increase in natural gas usage is worth having, as good as low prices are for the US — the resulting glut has all but halted further exploration.
By. Stuart Burns