“The NGV market experienced a growth spurt in late 2013, and that is expected to continue in early 2014, with new engineers and vehicles coming to market.”
That’s the conclusion of a very optimistic report issued by Navigant Research on the progress of natural gas vehicles – particularly NG trucks and buses – in the United States and the world. (The report, sorry to say, costs $4000 but the executive summary can be seen online at http://www.navigantresearch.com/research/natural-gas-trucks-and-buses.)
“As the cost of oil climbs and emission from large diesel and gasoline engineers garner more scrutiny, fleets and governments are increasingly looking for alternative to fulfill their needs at lower costs and with lower emissions,” says the study. “At the same time, new drilling techniques and new pipelines make natural gas a significantly more competitive vehicles than a decade ago. The result is growing markets for medium duty and heavy duty NG trucks and buses.”
Indeed, the Navigant report does not anticipate an expanding market for natural gas vehicles in general but sees growth concentrated in the area of trucks and buses, particularly fleet vehicles for large corporations and municipalities. The great advantages here are: a) vehicles can be bought in bulk; b) they can be fueled at central depots, and c) fleet vehicles tend to pile up the mileage, which means a quicker payback period from savings over gasoline.
In Palmdale, California, AT&T has converted its utility trucks to compressed natural gas in an effort to save money on fuel and cut down on carbon emissions. “The vans are large enough to accommodate bulky gas canisters hidden beneath the floor,” reports Robert Wright in the Financial Times. [http://www.ft.com/intl/cms/s/0/9f06bea8-69ea-11e3-aba3-00144feabdc0.html#axzz2osEhWAna] The conversion costs $6,000 but operating costs will be reduced 10 cents per mile, meaning the initial investment will be recouped after 60,000 miles. Most utility fleet vehicles hit that number within two years.
Some municipalities are even finding it worthwhile to switch to natural gas in smaller vehicles. In Conway, Arkansas, the police department’s Chevy Tahoes are being converted to run on natural gas. The effort is being promoted by Southwestern Energy, which will be building two CNG filling stations in the area. Trussville, Alabama is scheduled to make the same conversion next year.
The switch to natural gas will receive a big boost in 2014 when Cummins Westport, a Connecticut company, introduces a 12-liter NG engine that is designed to sell between the existing 9- and 15-liter products. “This will is expected to provide robust growth for the day cab market in North America,” says Navigant. Volvo Trucks will also be taking aim at that market niche with a 13-liter LNG dual fuel engine.
Hovering behind all this is the effort by T. Boone Pickens’ Clean Energy Fuels to build a “natural gas highway” across America. CLNE, which trades on the NASDAQ, plans to sell natural gas at truck stops along the nation’s interstate highway system. The company is even planning to build its own liquid natural gas terminal in Jacksonville, Florida.
“Natural gas is a better transportation fuel than gasoline,” says the indomitable Pickens, who is engaged to be married for the fifth time at age 85. “It’s cheaper, it’s cleaner and it’s a domestic resource.”
In fact the market is now getting so crowded that providers are starting to bump up against each other. In the Northwest, Clean Energy is objecting to plans by Puget Sound Electric, Portland-based NW Natural and Spokane-based Avista Utilities to build filling stations for natural gas vehicles. “We feel that because of their monopoly status, regulated utilities will have an unfair advantage entering the natural gas refueling market,” said Warren Mitchell, chairman of Clean Energy. “Choices in the marketplace are a good thing,” responded Ben Farrow, of Puget Sound. “We don’t want to compete unfairly.”
Nevertheless, despite all this activity in the United States, Navigant actually sees Asia as natural gas’s prime growth market. By 2020 the report anticipates annual sales of 400,000 medium and heavy-duty trucks and buses, but the Asian Pacific will account for an astounding 76.2 percent of these sales while North America will provide only 12.7 percent and Europe 8.6 percent. With 1.2 million NGVs on the road by that time, China and the United States will represent a combined 96 percent of the world market.
Compressed natural gas still has its problems. Even when stored at 3,600 pounds per square inch, compressed gas takes up five times the space of a gas tank holding the same amount of energy. This means that on a Chrysler Ram 2500 pick-up the tank still occupies nearly half the truck’s rear cargo bay. Obviously, the bigger the truck or bus, the better it will be at accommodating this bulk. But when it comes to ordinary passenger cars, finding room for the gas tank will be much more difficult. That is why there is still only one NG passenger vehicle – a Honda Civic – on the road today.
Converting passenger vehicles to natural gas will probably require a liquid fuel. Methanol and butanol, both of which can be made from natural gas feedstock, are likely candidates. But that still lies ahead. For now, the progress of CNG among heavy duty trucks and buses is an encouraging sign that we may be able to reduce our dependence on foreign oil.