Will Automakers Switch to Natural Gas? 47 comments
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The drum beat for substituting natural gas for petroleum to power cars and trucks has begun to get louder. It’s been part of Boone Pickens’ plan, of course. And now Jim Cramer has picked up the theme with support from Aubrey McClendon of Chesapeake (CHK).
The concept is potentially practical since natural gas is currently much cheaper than oil on an equivalent power basis and since converting cars to NG is done in many parts of the world and is not terribly expensive. Apparently conversions are popular in Australia and I’m told that one third of cars in Brazil run on natural gas.
What would make natural gas conversions to take off in America? I suspect it would require a mainstream corporate endorsement. If a credible company starts up a Starbucks-of-NG-conversion chain of superstores (let’s say Lee Iococca came out of retirement to do it), we could see substantial movement. It would need to be coordinated with the insurance industry to assure owners that their coverage would not be impaired somehow.
Cramer mentioned three public stocks that are tied to natural gas transportation. One is Pickens’ Clean Energy Fuels (CLNE), which focuses on local commercial vehicles. Another is a Canadian company, WPT Enterprises (WPTE). and the third is Fuel Systems Solutions (FSYS), a company that makes conversion equipment and which has already enjoyed a huge run in the past year. Both American companies’ stocks seem overpriced on a P/E basis. That fact by itself suggests there could be legs to this idea.
One negative indicator is that a General Motors (GM) executive is now talking about using natural gas to power the Volt. Since GM never does anything right, GM’s endorsement could be the kiss of death for natural gas. Of course GM has not officially announced they will go that way (and they may well be bankrupt before having a chance to make that announcement), so their mention of natural gas is not an official sell signal for the commodity.
On a serious note, if natural gas conversions were to become a significant trend I have little doubt that the price of natural gas would eventually rise to the energy equivalency of oil. That would make such conversions economically uninteresting (although still useful from a reduced greenhouse gas viewpoint).
Therefore, my sense is that using natural gas for personal transportation will probably not become a major U.S. trend. If it did, it would only be a temporary palliative that might delay the ultimate solution we need to achieve: electric transportation with renewable electric generating capacity.
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This article has 47 comments:
The first sentence has the hint why they weren't massively popular - it isn't the acceptance, cost, driveability, or maintenance. It's the fuel distribution to customers. Fleets can afford to have their own refueling station and until there is a convenient NG station at every corner, people aren't going to convert older cars or buy new NG cars.
There are no NG "refineries." As such, there is a huge cost savings and I'm willing to let market forces compete for my dollar, which will keep prices low. Plus, having two vehicle fuel supplies will keep the US economy on steady footing - gee, imagine having a choice when Iranian oil is embargoed after their first nuclear underground test.
When you calculate the KWh to replace 100 billion gallons (US annual gasoline consumption) let us know how the electric grid can handle it. Also, given that electricity can't yet be stored easily or efficiently, it will be a nice second or third alternative but not primary. There is yet no way to store wind or sun, like you can coal, oil, or NG.
One other important item to note about a switch to NG. The U.S. spends over $700 billion per year importing oil. This puts tremendous pressure on the dollar and much of this money goes to folks who are less than friends. Going to Ng for transportation fuel would keep virtually all the money in the U.S.
1. Honda has a gas Civic [the GX] that you can buy today. you lease or own a small compressor gizmo for your garage. 200 mi range. great for early adopters. Works like you'd expect a Honda product to work.
2. nat gaz, as Cramer calls it, as an auto fuel is problematic here in Buffalo and other cold climates when it gets really cold.
3. the first time a nat gaz car gets "pinto-d" and some Soccer Mom and her kids get toasted, you can put those gas cars in the museum with the Corvair.
Natural Gas is the fuel of the 21st Century: www.gasresources.net/T...
Tank inspections? If NG becomes popular, go back to the car dealer for the 3yr inspection- they have to service them anyway .
Would secretaries rather sit in front of a Molotov cocktail? Please, let's not scare people out of Home Depot because of a propane forklift that might blow up. I'd believe more injury from a loose tank being propelled, but not by fire or explosion. That's only in the movies.
The cost for tanks is cheaper now.
I agree the biggest problem is no NG stations. But there weren't diesel pumps before, either.
I couldn't notice the difference running on gasoline or Natural Gas (called GPL in Italy). In Europe conversions have been done for many many years. I have known dozens of people that converted their cars without mechanical problems, insurance issues, maintenance issues, etc. It is simply a better fuel that oil lobbies want to keep secret ;)
If enough people get educated on this matter, demand could be built and infrastructure will come with it. I am actually shocked that not many people know how popular natural gas is in many foreign countries.
You are full of " crap " like all the other nervous nellies , always find a reason to hold back progress.
How in hell is it the rest of world is 20% converted to natural gas and America isn't , people like you and politicians are the detriment to America.
What was your involvement ? Watching one be filled ? They don't put in 3600 psi stupid .
1. Pickens isn't touting private CNG powered vehicles. He's using LNG to replace diesel in truck fleets as we speak as an immediate first step.
2. Private car owners LOVE using CNG in OK and UT, where public refueling is available for less than $1 a gallon. I wonder why...?
3. The U.S. has DOUBLED its proven NG reserves during the past ten years, and that's not counting new GIANT ONSHORE finds like Barnett, Marcellus and Haynesville, which only need to get hooked up to be ready to go.
4. Despite our technological superiority (...Right!), the rest of the world has somehow already figured out how to use NG as a private transport fuel, where it powers MILLIONS of cars and trucks, compared with only a few hundred thousand here.
5. NG derivatives are a 30+ year old proven automotive technology, with few deleterious side effects. And the EPA says the Civic GX is the environmentally CLEANEST vehicle they EVER tested.
6. You can convert your SUV to run on CNG right now and fill up at home at night (if you have NG) for less than $1.50 a gallon, with an upfront investment of a few thousand dollars, which sure beats the $10-15,000 hit you'd take on a trade in.
7. OR you can "Hope!" for a better answer someday like the adoring believers of NObama. Oh, and don't forget to inflate your tires!
did you mean WPTE or WPTFF.pk[was untill last week-WPIVF.pk]. westport innovations--vancouver... bc. NG ignition systems.
CAUTION: Be sure to watch their hands, not their mouths, and keep yours tightly on your wallets as we approach D-Day on Oct.1, when the existing moratorium on offshore exploration will expire.
if the majority of N. American fleet vehicles were NG, that is a huge quantity of demand off fossil fuel oil.
suggested reading websites--
WPT-TSX[westport news releases]
CHNG.OB[seeking alpha and China NG website]
CLNE[web site news releases]
there is much more worldwide action inexistence. the USA audience is just joining the party.
Plus, we already handle 12 Quads of electricity on our existing grid - so replacing all the useful energy in transportation amounts to adding another 5 Quads of capacity: so beef up the grid by 50% and go electric transportaion.
Since the majority of gasoline is burned during daylight hours who needs storage? Should we happen to need some gap-electical-power, we'll just burn some of that biofuel in 100% recoverable heat electric plants.
Go dryland farming celulosic feedstocks for biofuels.
There are so many storage technologies for solar and wind generated electrical power that only fools would suggest roadblocks - and we see so many!!!!!!!!!!!!
AND YES, THEN LEAVE THE COAL IN THE GROUND - ALREADY STORED!!!!
IF SO, THEN I ALSO DO NOT HAVE TO NOT MENTION THAT OIL IN THE GROUND IS ALREADY STORED TOO!!!!!!!
DUH!!!!
wind mills to keep the utilities running now...but nat. gas could be
the bridge to other forms of cleaner energy...and keep the old
green back right here in the good ole usa.
As we install power management control meters, browns and blacks will be less of threat. Especially, when major consumer's (industy and large commercial facilities) are so connected.
Again, biofuels burn basically as well as NG for what useful energy we get out of them.
PS: your statement is another "roadblock" mentioned above.
I invite you to become informed from this chart:
static.seekingalpha.co...
While some of the above is financially feasible and makes sense (save for the expensive closing of the ng to electric plants). A financially better, although not green, solution involves: 1) building coal to diesel and coal to electric plants; 2) doing the Pickens ng municipal car fleets and rich subsidies for wind; 3) building heavy oil refineries; 4) allowing the oil shale reserves and offshore drilling currently roped off by Congress to be exploited; and 5) continue the subsidies for electric cars and hypbrids. If you want to win, make sure and give it the full effort, the real Vince Lombardi. Half measures have been tried before but failed.
NakedJB seems to be well informed – but more of an “enviro”. I’m sorta an agnostic on “climate change” .. I don’t know that CO2 causes warming – maybe warming allows/causes higher CO2 levels.
What I REALLY dislike is sending $$ to the Arabs (and yeah, the Persians too)!
Nobody has mentioned the BEST way to make electricity – by splitting the atom! (and sure, let’s fuse it too, but I’m unlikely to live long enough to see fusion power).
ANYTHING beats buying foreign (well, non – North American) oil. Until we have way better batteries – to drive the Nuclear power around – Nat.Gas sounds better than paying the Saudis.
Somebody (maybe elsewhere) was saying a buck or two cost for a gal/equiv … the local gas utility is just pimping the purchase of some of the Honda Civics made to run on NG (at an extra cost of 6-7000 ?) and they are saying $2.10 / gal/equiv. And this is a municipal utility – a nonprofit.
I’m an economist, but just retired from the local electric utility – yeah, we have coal, Nuke, AND some NG, but the NG is just for summer “peaking” use. A peaking plant is one you start quickly and run for a few hours only.
Another point --- Nakedbird said a coal plant is 30% effective .. that’s BTU heat into BTU electricity. That’s not too far off, the modern standard is 33.3%, but there are “combined cycle plants” that recapture lots of the “waste heat” and get the grand total closer to ½. Then IF you can re-capture the bulk of the CO2 .. and it’s coming .. a greenie like nakedJB should be less offended.
PS NJBird – tell us about the “so many storage technologies for solar and wind generated electrical power” that you like. The dual dams – one at much higher elevation than the other – with hydro generator that can also be a pump, is all that works on a BIG scale
One more point in favor of NG – I seldom see it mentioned – is vehicle maintenance. I have thousands of hours in the seat of propane vehicles – OK we had propane tractors when I was young (and yeah, in the 1960’s propane was like 11 to 17 cents … yeah PENNIES … per liquid gallon). I remember well the manual on oil changes (these were MM – Minneapolis Moline – tractors). They made the same machine in diesel, gasoline, and propane versions – and the oil change interval was 100 hr on diesel, 200 on gasoline, and 300 on propane!! THERE’s another heck of a reason to use NG in fleet vehicles – plus many fleets can have their own fueling areas and not depend on public stations
I'm all for nuc fission. Fusion I'd prefer leaving it on the sun and reap the benefits forever for free on earth via solar PV (preferntially).
The way we burn hydrocarbons today: 70% of the energy goes up the stackm, into the water, out the exhaust..... DUH!!!
Europe used the concept in district heating for a century(?).
But, I'm still against BURNING our natural resources (except for nuc [uranium, etc.] of course - but it's not a hydrocarbon - AND I DON'T FEAR THE REPROCESSSING OF NUC AND WASTE HANDLING - WE'VE BEEN DOING IT FOR YEARS, IF YOU KNOW WHERE TO LOOK (AND I DON'T MEAN HANFORD WHICH WAS HANDLED MISERABLY - EVEN THO THEY HAD A MISSION, WITH UNINTENDED CONSEQUENCES (DEPENDENT VARIABLES, AGAIN).
Again, I'm not a greenie (their focus was air, water, etc.). My focus is energy source and energy misuse. The greenies focus was on the dependent variable, not the independent variable. Plus, re. nuc. they, the greenies, caused a lot of damage thru emphasis of the 1,2 std deviations to impact the 'stupid' which bot the tails for the whole curve.
By then, ..... remember we only need 5 Quads of electric for ALL TRANSPORTATION; as you should know, we already generate and distribute 12 Quads of electric annually, NOW. So we need to beef up the grid 50% for handling transportation. And, by the time that moves off the highways onto rails, etc., the todays requirement is actually reduced.
Bottom line, required storage of electrical power from sophisticated complex means may be small; assuming nuc, wind, solar, hydro, etc., continue.
Especially when we've really harnessed the waste heat recovery via solid state devices fed by biofuels................. free. Got all the standby, peaking, if not some baseload necessary, without burning any natural hydrocarbons.
Nevertheless, CNG fueled vehicles may be suitable for commuting and short shopping trips. They can be refueled from personal residences by installing commercially available compressors and storage tanks already available from the market.
The key is to consider the natural gas conversion in conjunction with the wind and solar capabilities. Essentially, we shift the 75% (gradual obviously) of natural gas consumption from industrial to personal thereby quelling your presumption that natural gas demand would go up astronomically. This is the Pickens point with wind and solar. The other point is that competition for pulling natural gas out of the ground would increase exponentially. Prices for natural gas would certainly go up in the short run but never near oil costs (which will only go up) and long term, a definite winner.
There's plenty to go around and its clean fuel.
… in Delhi, India, all public vehicles (buses, scooters, taxis, etc.) are required by law to run on CNG. Well over 20% of private automobiles also use CNG as fuel too due to its cost advantage… converting a vehicle to use CNG requires installing a “conversion kit’’ which incurs a capital cost of about about $800 US$. At that time, they install a CNG steel cylinder … the vehicle can run on both fuels (gasoline or CNG, there is a dashboard change-over switch).
….The Thailand Cabinet on 27 May 2008 instructed the Ministry of Transport to assist the equipping of 6,000 Bangkok buses with NGV devices. It told the Ministry of Energy and PTT Public Company to assist 42,750 taxis in becoming NGV-fuelled vehicles by the end of 2008. The two agencies were also asked to increase the number of NGV service stations to at least 260 by July 2008. The Government hopes that the promotion of the use of NGV will bring down domestic oil consumption by 100 million liters a year.
Evan McMullen, Seattle Post-Intelligencer: Most Thai taxis and many private passenger car owners have opted to spend about $1,000 per car to convert their vehicles to burn ethanol or compressed natural gas.
6 June 2008, The Nation (Thailand). Four new producers of natural gas tanks are coming online in Thailand to support the Energy Ministry’s plan to increase the percentage use of natural gas in the Thai vehicle fleet to 20% by 2012, up from 6% today.
THAILAND/GM: By Steve Carlisle,President, GM Thailand. Last year, General Motors became Thailand’s first and only automaker to offer a CNG passenger car: the 1.6-liter Chevrolet CNG Optra. It’s equipped with a slightly modified internal combustion engine and a pressurized tank to store natural gas. The vehicle is capable of running on either CNG or gasoline at the flick of a switch. … the demand for the CNG Optra has been incredibly strong. We have sold through our current inventories, will likely be increasing production in 2008 and are evaluating introducing additional CNG models here in Thailand.
William Botwick, President of GM’s Southeast Asia Operations and President of General Motors Thailand, said: “GM has been working closely with the Thai government on a number of alternative fuel initiatives, including CNG conversion technology, so we’re proud to be leading the Thai market in equipping our vehicles with CNG conversion capabilities.