Fuel Systems Solutions: A Winner in the Alternative Fuels Industry 17 comments
an article to
-
Font Size:
-
Print
- TweetThis
Shifting gears a little, I was mulling the desire to reduce our carbon footprint as a nation and the part-ownership we all have in two of Detroit’s Big Three. Specifically, I was thinking about Chrysler and why it just ended its electric car program ENVI.
Technically, the program was absorbed into mainstream vehicle development being run by Fiat, the Italian automaker that owns a large minority chunk and controls the management of Chrysler.
I don’t suspect that Chrysler is walking away from electric as a possible vehicle platform, but I can speculate as to where I think Chrysler, led by Fiat, is heading: compressed natural gas or CNG.
Now, I don’t believe CNG will replace gasoline, but I think it could be the major alternative vehicle option for Chrysler.
Why do I think this?
For one, Italians love natural gas powered vehicles. One recent report estimated that 25% of the vehicles sold in Italy last quarter run on compressed natural gas (or methane).
That’s an astonishing amount. And that doesn’t include the large number of after-market CNG conversions that are done to cars in Italy, too. As the largest automaker in Italy, Fiat is sending CNG-powered cars into the market. This spring, it announced six models for the Italian market that are able to run on either gasoline or natural gas. Here is a quote from a statement Fiat gave to AutoChannel.com at the time:
Fiat believes that methane propulsion systems are currently the most appropriate and readily-available technology for resolving pollution problems in urban areas. This is because the use of methane has positive implications in terms of environmental benefits (reduction of approximately 23% in CO2 emissions and reduction of PM emissions to practically zero). Furthermore, methane proves itself to be a valid financial alternative to traditional fuels (diesel and petrol), which are increasingly subject to rising prices.
Pretty straightforward commitment, right? CNG at the nation’s 800 filling stations is also as low as half the price of petrol in Italy.
Now consider this: the U.S. has the world’s largest reserves of natural gas.
U.S. compressed natural gas filling station company Clean Energy Fuels (CLNE) can bring the gasoline gallon-equivalent to a filling station for $2.50 a gallon wholesale.
The U.S. government is mandating automakers get cleaner vehicles on the road and is a near lock by mid-2010–if not sooner–to pass a law extending significant tax credits to build CNG filling stations and convert gas engines in trucks and cars to use CNG.
The final piece of the puzzle? The leading engine conversion company, both for automakers fitting the conversions on the assembly line and for the aftermarket, is an American company, Fuel Systems Solutions (FSYS). Fuel Systems’ U.S. arm is called Impco and it’s based in California. Fuel Systems also has a major arm called BRC, which is based in Milan and supplies conversion kits to, among others, Fiat.
As I said, this is speculation on my part about the direction of Chrysler. And regardless, FSYS is proving to be a big winner in the market: I got Cabot Green Investor subscribers into the stock in August at 31 and shares have already climbed 55% to 48 thanks to strong European conversion business and an EPA regulation on truck emissions going into effect in 2010 that will make using CNG for truck engines much more attractive.
Consider how well FSYS could perform when gasoline prices inevitably push well over $3 as the economy improves (and as the dollar, in which oil is priced on the international market, remains weak). If Chrysler takes what I see as the logical path to producing a low-emissions car in the near-future, Fuel Systems could be an early leader in the home run sector of the decade before us.
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication in the last week
Seeking Alpha 100 » -
Fastest Climbers
Those with the largestSee all
increase in followers
in the last week
Fastest Climbers » -
Top Commenters
Top commenters,
as ranked by their peers-
1
User 353732
-
2
Moon Kil Woong
-
3
doubleguns
-
4
optionsgirl
-
5
Mayascribe
Top Commenters » -
1
-
Top Instabloggers
The 100 most activeSee all
Instabloggers.
Top Instabloggers » -
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
Check out oil prices now, in the midst of a very severe recession.
BRIC demand will continue to rise, when even the overf-optimistic estimates of the IEA show that output cannot possibly rise much with current levels of investment.
If you put in more realistic rates of exploitation, and don't make the heroic assumption that the IEA does that rates will suddenly leap far above historic norms, then things are even worse.
Electric vehicles are a lot more difficult to take much of the burden in the US than in Europe and the Far East, with much lower petrol prices and higher commute distances.
The only remarkable thing is how few NG cars there are on the road in the US.
That should change if there is the slightest hint of recovery - oil prices will rocket.
thefitzman.blogspot.co...
if such a policy were adopted, FSYS would go to the moon. that said, don't hold your breath. US policymakers seem intent on destroying the country by ignoring its biggest problem: an economic foundation built upon and dependent on foreign oil.
dual fuel capable autos[CNG + diesel or gasoline]
fuel station infrastructure support[at the station as well generally available pipeline[e.g. new england]
fleet turnover rate vs OEM owner modification habits. OEM retail support
for auto owner confidence
proposed legislation will enhance truck based applications[vans to sixteen wheel]. but autos in USA may have bigger impediments
WHAT SAY YOU?
Brendan Coffey Said: "For one, Italians love natural gas powered vehicles. One recent report estimated that 25% of the vehicles sold in Italy last quarter run on compressed natural gas (or methane).
That’s an astonishing amount. And that doesn’t include the large number of after-market CNG conversions that are done to cars in Italy, too. As the largest automaker in Italy, Fiat is sending CNG-powered cars into the market. This spring, it announced six models for the Italian market that are able to run on either gasoline or natural gas."
Brendan Coffey is absolutely correct:
20 years ago I sold Hyster forklifts. We were converting the gas fired models to dual fuel at that time. No big deal. I think the cost to the customer at that time was less than $750 per unit. I'm betting that all of the forklift dealers are doing it still. FSYS owns Impco, which makes the conversion kit. (They're selling these kits all over the world today for over the road use. Except USA.) As I understand it big oil lobbying at that time made it impossible to convert automobiles in the USA to LPG or LNG.
Currently a shop or auto dealer can convert gas to LNG, but the license per car model and engine type is $10,000 per.
That means that no aftermarket shop or dealer is going to shell out over $100,000 for licenses to convert 10 different car models.
Many professionals think we may have reached peak gas, and that remaining US supplies may only last a decade. The shale wells currently flooding the market have very short lives, and the pollution effects of contaminated water may soon make them politically unviable.
We (the US) do have very serious political problems, such as the $10,000 fee per engine type per conversion shop that strongly discourages CNG conversions. ( As mentioned by previous posters).
CNG has another serious problem, especially for autos: a very low energy density. To get the same range, the fuel tank for CNG needs to be about four times larger than the comparable gasoline. It also needs to be cylindrical for strength, so cannot be form-fitted, like most gasoline fuel tanks are.
There are definitely niche applications for CNG, but it is not a panacea. In my opinion, NH3 (anhydrous ammonia) has much better characteristics for most transportation fuels uses. See www.ammoniafuelnetwork... for more info.
www.odac-info.org/site...
This report is a critical read in other respects too, as it sees oil peaking by 2016 ( I would put it earlier) with oil prices peaking at $175/barrel, followed by very instable conditions as the economy switches from oil.
On Nov 23 10:53 AM ricardoRI wrote:
> Check your facts: the US does not have the largest gas reserves;
> it is number 6. See en.wikipedia.org/wiki/...
>
>
> Many professionals think we may have reached peak gas, and that remaining
> US supplies may only last a decade. The shale wells currently flooding
> the market have very short lives, and the pollution effects of contaminated
> water may soon make them politically unviable.
>
> We (the US) do have very serious political problems, such as the
> $10,000 fee per engine type per conversion shop that strongly discourages
> CNG conversions. ( As mentioned by previous posters).
>
> CNG has another serious problem, especially for autos: a very low
> energy density. To get the same range, the fuel tank for CNG needs
> to be about four times larger than the comparable gasoline. It also
> needs to be cylindrical for strength, so cannot be form-fitted, like
> most gasoline fuel tanks are.
>
> There are definitely niche applications for CNG, but it is not a
> panacea. In my opinion, NH3 (anhydrous ammonia) has much better characteristics
> for most transportation fuels uses. See ammoniafuelnetwork...
> for more info.
If not gas from shale plays, methane was mentioned - I don't think we're running out of garbage or waste. Also with shale I believe output drops in the 50% range after the 1st year but can sustain at the lower level for many years. At the very least we should convert trucking and public transit (also FSYS plays). Why do we have to have a walkoff homerun solution? Can't we solve it with a couple of big hits?
For the conspiracy theorists I believe Honda had a promising car and home refueling solution which died a seemingly unnatural death.
On Nov 23 01:08 PM CGP wrote:
> LNG seems to have worked in Italy for many years.
>
> If not gas from shale plays, methane was mentioned - I don't think
> we're running out of garbage or waste. Also with shale I believe
> output drops in the 50% range after the 1st year but can sustain
> at the lower level for many years. At the very least we should convert
> trucking and public transit (also FSYS plays). Why do we have to
> have a walkoff homerun solution? Can't we solve it with a couple
> of big hits?
>
> For the conspiracy theorists I believe Honda had a promising car
> and home refueling solution which died a seemingly unnatural death.
Tell that to the politicians, who have pursued a variant of (2), which is: subsidize and mandate hopelessly expensive and non-scalable biofuels, thus lulling drivers into a false hope that the Government has found a solution that will keep blended gasoline and diesel fuels available at the pump at constant or even declining prices. If anybody thinks that the United States has abandoned its policies to support first-generation biofuels, they should have another think coming. For example, there are now bills before the House and Senate to extend the $1/gallon subsidy for biodiesel for another five years:
www.dtnethanolcenter.c...
Why? Biodiesel is NEVER going to be competitive with petroleum diesel. Even the industry admits that its very existence is dependent on the continuation of this subsidy.
Perfect full cycle for the CO2. Europe has seen the logic of this solution and many countries are injecting organically made Biomethane into the natural gas grid and hey presto you now have a percentage of your CNG vehicles running on home made naturally made natural gas.. Now if we have to keep explaining the logic of this ONE!!
CNG conversions in America seem a wee tad overpriced as we can do them here for 2000 Euro in Europe and the fuel is up to 50% cheaper to run on. The size of the tank as was mentioned in US was too big. !!!! We here in Europe have smaller cars and we can put them discretely in the car without having to see the. That chap seemed to suggest they need to be towed behind you in another trailer they were that big. Good god man if we can fit them nicely in our little cars i think its a bit rich to suggest you can't fit them in your massive cars in the USA. Moving from diesel and petrol is not going to be a breeze as everyone suggest but i think as oil prices rockets it will focus a lot of minds to thinking of alternatives. I am not a tree hugger but i find people who suggest that 10 million vehicle sales world wide as a flash in the pan or mere folly a vested oil supporter from Texas who was disappointed when BUSh left the white house. Roll on Obama well done he is a star and well liked in Europe. Top man for the times and not a narrow thinker unlike a couple of commenters here ..
John Reed
Omnitek Engineering (OMTK)
www.unraeservizi.com/d...
forecast were correct, you should however consider that sales were boosted by the incentives given to the car market, so they could not be a valid indicator of a susteinable growth.