Natural Gas Vehicles to Boom Over Next Decade

New research from Navigant Consulting finds that the number of vehicles using natural gas will double over the next decade to 39.8 million. Much of that growth will occur in Europe and China, although the market in the United States will also grow due to low-priced natural gas.

Natural gas vehicles will still only be a niche market, accounting for around 2.6% of cars and light-duty trucks in 2023.

The U.S. lags behind in natural gas vehicle saturation. Navigant predicts that natural gas infrastructure and refueling stations will double in North America by 2023. This will allow for an increase of 138,177 natural gas vehicles sold in North America in 2023. But that pales in comparison to Asia-Pacific, which will sell an additional 1.9 million sold.

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Countries with the highest number of natural gas vehicles are ones that put in place policies to support their growth years ago. Many did so because they had large endowments of natural gas – such as Argentina, Pakistan, and Iran. Others did so to reduce air pollution, such as India and Bangladesh. China in particular will likely drive growth of natural gas vehicles as it seeks to reduce smog in its cities.

In the United States politicians from both the Republican and Democratic party to some degree have supported policies to increase the penetration of natural gas in the auto market. Senators James Inhofe (R-OK) and Carl Levin (D-MI) coauthored an op-ed for the Wall Street Journal on February 27th, laying out policies to support greater adoption of natural gas vehicles in order to take advantage of America’s large reserves of shale gas. They call for allowing automakers to receive bonus credits towards meeting their requirement for corporate average fuel economy standards if they build natural gas vehicles. They also call for other incentives, such as allowing states to include natural gas vehicles in their high-occupancy-vehicle lanes, which has proven successful for electric-hybrid vehicles.

By Joao Peixe of Oilprice.com