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While GM (GM) tinkers with its much ballyhooed electric car named the Volt, Americans are busy maxing out their credit cards to get to work.

Although the Volt and similar offerings from competitive automakers promise a renaissance for drivers worldwide, the will very likely only be "boutique" vehiles for the next several years. It is predicted that the Volt will cost around $45 thousand when introduced, inluding its $15K replaceable battery pack. But it won't be even an option for many car owners, especially the millions who are "upside down" (owe more than they're worth) in their SUV's due to $4 a gallon gasoline.

So it looks like high mileage compacts and hybrids, which are powered by gasoline and electricity, will rule the American roads for the foreseeable future. This is not an altogether dismal prospect, either. New compact cars and hybrids that average 30-40 mpg or more will further reduce U.S. gasoline demand, and resulting lower prices can only benefit beleaguered SUV and light truck owners at the pump, as well.

But what about natural gas [NG] powered vehicles? Do they have a place in our future? Billionaire T. Boone Pickens thinks so. A key element of his "Pickens Plan" is to utilize LNG (liquefied natural gas) as a transportation fuel for heavy trucks, where electric power is incompatible for this use. And CNG (compressed natural gas), which has capably powered fleet vehicles (eg. delivery trucks and taxicabs) for decades, is likely to expand its role in this capacity, as well.

Of course, all the new use of NG in transport is dependent upon availabilty and price. Unlike oil, NG is produced domestically, and the U.S. has A LOT of it. In fact, as the result of improved drilling techniques, we now have reserves that represent over a 100 YEAR supply. And that doesn't count any NG we may find on the OCS (outer continental shelf) if it's opened up as expected for increased exploration.

There isn't a single worldwide price for NG, either. Although it is transported throughout our nation via a vast system of existing pipelines and trades daily in futures markets, gas prices are regional in nature. For example, it's alot cheaper in Texas and Louisiana where much of it is produced than in the Northeast, which is at the other end of its long journey through underwater, above ground and underground pipes.

These price differences are also prevalent in states like Utah and Oklahoma, which have significant NG production facilities. This accounts for the fact that CNG sells for the equivalent of less than $1 in these states, and public refueling is widely available for privately owned CNG powered cars and trucks.

While that's great for those lucky drivers, what might this mean to the rest of us? That's dependent upon two variables, which will go a long way toward determining NG's future as a transportation fuel in the U.S. First and foremost, we will need cars and trucks that can run on it. Although domestic automakers produced "dual-fueled" (gasoline + CNG) vehicles for several years (primarily between 2000-05), they were sold mostly to commercial fleets, and production was ended due to lackluster sales. Of course, that was before gasoline prices skyrocketed.

And, second, if CNG cars and trucks are to gain in popularity, we're going to need public CNG refueling stations across America. While Mr. Pickens is building his own LNG depots, and centralized CNG refueling is fine for taxis and delivery trucks, most of us will never be able to go our favorite convenience store to fill up unless it has CNG pumps. The most likely places where these may be located initially are in states and communities where NG is produced nearby, of course.

So, are we likely to see CNG powered vehicles in our future? The answer is a qualified "Yes." If automakers build them again, even on an "order only" basis, and you live in proximity to an NG pipeline or production facilities, CNG may be coming to a "gas station" near you before you know it. And if you don't, you stand to benefit, as well. Every gallon of CNG that's pumped means another gallon of expensive oil we won't have to import from foreign oil producers. and billions of dollars we won't be sending overseas each year.

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This article has 52 comments:

  •  
    half the taxis in S.A. use we should too.
    2008 Aug 17 09:36 AM | Link | Reply
  •  
    I believe in this..big time. I am a member of the picken's plan and am calling every member to action. Including T. Boone!!!! It couldn't be much simpler. Check it out.

    push.pickensplan.com/f...
    2008 Aug 17 01:40 PM | Link | Reply
  •  
    People world wide will use the cheapest energy source available and right now thats oil/gas .
    2008 Aug 17 02:53 PM | Link | Reply
  •  
    There are NG conversion kits and I have looked into them. And electric cars are reasonable for those that don't travel too far from home. The main difficulty with either is refueling if you are travelling away from home. Where do you plug in for several hours and what do you do with the kids while you recharge? Where do you refill your propane? Do you pull out the old tank like a 5 gallon BBQ? Until we fix the refuelling issues, we're dealing with gas and hybrids...

    jegan ;-)
    2008 Aug 17 04:23 PM | Link | Reply
  •  
    Finally, a voice of reason. Klingsdale hits a home run with this article...PS: I understand you could fuel up in your garage using a gas grill type set up.
    2008 Aug 17 06:02 PM | Link | Reply
  •  
    It will work if we can the knuckle heads in Washington and lobbist out of power and put real people in charge like Obama. The man with a plan for America and its people.
    2008 Aug 18 08:46 AM | Link | Reply
  •  
    keep your garage door open while you are refueling.

    propane - we have 2 tunnels here in baltimore where carrying liquefied combustible gases is illegal.
    > jack
    2008 Aug 18 08:48 AM | Link | Reply
  •  
    You mention gas being cheaper in Texas and Louisiana due to the supply originating from those areas. But this will be less and less true as the enormous Marcellus Shale is developed--it covers much of Pennsylvania and bits of other states, including New York.

    Also, the infrastructure of public CNG filling stations might be less of a hurdle than you think, as it is possible that appliances sold for home use could allow for home fueling from the natural gas line that already comes to your house (for many Americans).

    However, let's also consider this. Right now, we produce about as much natural gas as we consume. We import some. But if a significant portion of our automotive fleet were converted to CNG, our consumption of natural gas would explode. Pickens plan deals with this by taking all those natural gas power plants off-line and replacing them with wind farms. We'd have to do something drastic like that to prevent the cost of natuiral gas from sky-rocketing (more than it already has, that is). Full disclosure--I work for a natural gas E&P company, so skyrocketing natural gas prices would be pretty super for me personally. But for the country, not so super. I bring it up because any large-scale change as advocated here and by Pickens is likely to have some big unintended economic consequences, some good and some bad.
    2008 Aug 18 09:37 AM | Link | Reply
  •  
    Jack,

    I believe I asked you this some time ago. To your knowledge are CNG powered cars and trucks illegal in the Harbor Tunnel?

    I suppose one answer is not if they don't know they're there.
    2008 Aug 18 09:42 AM | Link | Reply
  •  
    VEHICLES HAVE RUN ON CNG FOR YEARS! NOW IS THE TIME TO EXPAND THE PROGRAM. T. BOONE SHOULD TALK TO DETROIT.........VOLT IS A JOKE!
    2008 Aug 18 09:45 AM | Link | Reply
  •  
    There is a device named the "Phill," which is designed for overnight home CNG refueling if you have NG at your house. Honda, which builds the CNG powered Civic GX, has a licensing arrangement with their manufacturer.

    By the way, there are significant tax incentives for owning a CNG powered vehicle. A $4,000 federal tax credit, and some states offer
    tax savings, too. Utah, for instance, has a $3,000 credit for new and used CNG vehicles registered for the first time there.
    2008 Aug 18 09:54 AM | Link | Reply
  •  
    NO, Natural Gas is not anything except a crutch. The only thing in Hydrocarbons that burns is the Hydrogen. Therefore, the Ultimate fuel is H2. Drill; compress NG but perfect H2.
    2008 Aug 18 10:03 AM | Link | Reply
  •  
    Bill,

    OK, I'm with you. But a crutch is just what we need right now. Indeed, Honda says its CNG powered Civic GX is simply a precursor to an H2 car.
    2008 Aug 18 10:16 AM | Link | Reply
  •  
    Natural Gas is a great crutch. It's 80% Hydrogen already and there's over a 100 year supply and the down side is? Also to the person concerned about liquified gases in tunnels. We're talking about compressed gas, which is methane which is lighter than air and dissipates when released as opposed to propane which is liquid and heavier than air and pools when released.
    2008 Aug 18 10:18 AM | Link | Reply
  •  
    Ozarker,

    If you don't mind, what are some of the challenges Pickens faces in utilizing LNG powered heavy trucks? I understand they're building the specialized motors for them now. Is the fuel more dangerous to handle than gasoline?
    2008 Aug 18 10:29 AM | Link | Reply
  •  
    Cheer Picken's on folks.

    Burning NG in transportation is the first practical step to REPLACING oil/gasoline.

    Once there, it's an easy step to REPLACE NG (and leave it stored in the ground) by using above-ground grown and renewable biofuels.

    Hopefully, long before that we will have fully developed and implemented the burning of fuels in injected containers (not engines; no moving parts!) and are capturing all the heat (90+% of original energy) with burner-encapsulated direct-coversion-to-el... state-devices powering hybrids with the only on-board stored energy being the biofuel tank capable of being filled at all the existing fueling stations that currently exist.

    Understand, please, that by capturing all the waste heat mentioned above, we will actually need only 1/3 of the existing service station pumps - that's because we currently throw away 70% of the energy, or 70% of all the gallons we pump, AS WASTE HEAT.

    WE WILL NEED TO PROCESS, TRANSPORT, DELIVER, PUMP, CONSUME and grow ONLY 1/3 OF THE 20 MILLION GALLONS A DAY.

    Now chew on that.

    FACTOR THAT INTO THE EQUATIONS FOLKS. THAT ALSO MEANS WE NEED TO GROW ONLY 1/3 OF THE BIOFUELS THAT MOST FEARMONGERS SAY WE DON'T HAVE ENOUGH LAND OR FARMERS, ETC.
    2008 Aug 18 11:57 AM | Link | Reply
  •  
    The second practical step in transportaton is electrifying the railroads and getting rid of the diesel consumed there.

    The third practical step in transportation is electrifying the inter/intrastates with electric ferries for cargo and people, and if need be, hybrids.
    2008 Aug 18 12:03 PM | Link | Reply
  •  
    As for Power Generation: Go Boone! Get all that wind installed. And all the solar PV and thermal you can do.

    We only need some 8 Quads of electric to replace all the coal, gas and oil generated electricity, to leave the hydrocarbons in the ground; and we will still use most of the 12 Quad electrical distribution system we alreay have.

    No more wasting of 70% of the energy from oil, gas, coal, etc.

    Just be using the free, readily available, forever solar and wind........at whatever efficiency we can capture it, with no waste.
    2008 Aug 18 12:17 PM | Link | Reply
  •  
    And for the corn and commoditiy fearmongers, the above ground crops will be cellosic - corn stocks maybe, but not the kernals; try switchgrass.

    And that on dryland currently in CRP programs where we pay farmers to DO NOTHING. That is a great opportunity to readjust subsidies (tax dollar spending!), isn't it.

    In fact, if we give the farmers all the subsidies, tax breaks, research dollars, etc., we give from Detroit to Houston, and the resgt of DC handouts, all those folks would become dirt farmers. Yes, we would retrain them into doing real work - it's the fair thing!!
    2008 Aug 18 01:01 PM | Link | Reply
  •  
    paulk - if i remember correctly the baltimore prohibition applies to LPG, which is to say a propane bottle on your RV or camp trailer. NYC has a similar prohibition, they had a very severe incident with CS2 in the holland tunnel in the 1940's. for CNG in balto you should contact the city of balto government.
    > jack
    2008 Aug 18 01:12 PM | Link | Reply
  •  
    NJB,

    Or we could substitute SUGAR for corn. It contains 6X times the energy, and Brazil has proven it works. Alot of sugar is grown in the U.S. (and Central America), and alot more could be.

    We could start by ending the 81-cent a gallon subsidy for corn ethanol and revoking existing sugar tariffs, but we won't. A large lobby has grown up around corn ethanol that was initiated to help out broke corn farmers. Now we're stuck with the stuff.
    2008 Aug 18 01:45 PM | Link | Reply
  •  
    Jack,

    Interesting that you mentioned NYC. They could sure use the improved vehicle exhaust that NG generates. The EPA says the Civic GX is the cleanest car they ever tested, including the Prius hybrid.
    2008 Aug 18 01:51 PM | Link | Reply
  •  
    Paulk - corn and sugar require lots of water - the dryland farms are what are in the CRP programs and they don't get enough rain to grow corn or sugar - so switchgrass and other appropriate dryland biofuel feedstocks are the answer to get the farmers off welfare and make the millions of dryland acres productive - give the farmers those same payments to grow switchgrass minus (or plus if you want to treat them like big oil) whatever they sell it for and we'll have lots of biofuel coming on stream.
    2008 Aug 18 04:32 PM | Link | Reply
  •  
    Gotcha, thanks. By the way, rain's not a problem for domestic sugar growers. FL and LA get more than enough of it.
    2008 Aug 18 05:09 PM | Link | Reply
  •  
    I couldn't agree more.

    Natural gas is the means by which we can remove those grasping, greedy hands from around our economy's neck. I have stated that we don't need to "invent" anything, or need a "Manhattan" type effort or an equivalent "crash" program similar to the man on the moon project, but I was dead wrong. We as a nation need to expend the equivalent effort immediately that we did in the programs mentioned above. We must invent the motivation, the expertise and the unified national effort to regain control of our economic future and we cannot do it by continuing the massive wealth drain currently dragging us toward third worldom.

    Why would anyone who calls himself or herself an American, not do their absolute utmost to get our country's economy under our control rather than that of a bunch of foreign despots who hate our very guts.While smirking their way to their banks with OUR dollars. Let them drink their damn crude; a filthy, murdering substance that we do not have, cannot afford, should not want and certainly do not need.

    The necessary effort we need is to demand that our Congress lead the way toward an independent future by promoting programs necessary to switch the nation to a transportation system grounded on natural gas.

    A letter to your Senators and Representatives at both the state and federal level would be an excellent beginning.
    2008 Aug 18 05:12 PM | Link | Reply
  •  
    Good idea, Alamo. If we needed anymore proof, we can see what Russia's doing right now to increase their influence in the oil world. And they're in the process of nationalizing the oil fields that the international oil companies developed for them as we speak.
    2008 Aug 18 05:31 PM | Link | Reply
  •  
    When a hydrocarbon burns both hydrogen AND carbon burn. The end products are water, carbon dioxide, and heat (as mentioned above). Heat is produced whenever work is done. NG is doable, and we HAVE it.
    2008 Aug 18 06:48 PM | Link | Reply
  •  
    Welcome aboard Alamo - but get on with both feet.

    You're right about Manhattan and Moon Program empahsis, and LEADERSHIP - but it's going to be the Boone's and Warrens cause DC LEADERSHIP IS CONFLICTED!!!! Currently, they can't handle any programs that don't tickle their CONTINGENT, WHATEVER IT MAY BE. AND THE CONTIINGENTS ARE ON MANY SIDES OF ISSUES.

    You see, DC can't think and do clearly - short of Executive Orders (and of course dictates from one side, the fuzziness side of the Court!).

    Your other foot is getting rid of NG use. Interim use only. The final answer to transportation is ELECTRIC RAILROADS, INTER/INTRASTATES AND BIOFUEL HYBRIDS.

    ALL US NATURAL HYDROCARBONS STAY STORED IN THE GROUND.
    2008 Aug 18 06:54 PM | Link | Reply
  •  
    Volt is serious. Hopefully it will help keep my pension fund ... well you get the idea. Thanks
    2008 Aug 18 06:54 PM | Link | Reply
  •  
    AND ALL ELECTRICAL POWER GENERATION IS FROM WIND, SOLAR, TIDAL, HYDRO, GEO, NUCLEAR, AND BURING BIO ONLY - ALL WITH THE BEST OF WASTE HEAT RECOVERY DIRECTLY TO ELECTRICITY.

    AND YES, WE'LL MAKE (GROW) SOME BIO FOR ORGANIC BASED PRODUCTS.

    AND NO, WE WON'T GASIFY OR LIQUIFY COAL TO BURN IT - AT MOST, WE'LL MAKE ORGANIC BASED PRODUCTS IF AND WHERE NECESSARY - SAME FOR ANY CYCLIC ORGANIC SYNTHAFICATION. MAYBE WE'LL TURN ON A PUMPER NOW AND THEN.,
    2008 Aug 18 07:01 PM | Link | Reply
  •  
    tHERE you go guys - Therminol knows what to do with organics (instead of burning them) - make high temp heat transfer fluids for the Arabs Solar Thermal Power Generation Plant.
    2008 Aug 18 07:12 PM | Link | Reply
  •  
    I note that: "Paul Killinger is a new contributor to Seeking Alpha. We hope to have a bio for this author soon"

    I find that I am getting very wary about advice being offered 'freely' these days. So much of it can be traced back to corporate interests.

    So let me declare now that, for economic and environmental reasons, we promote migration of ICE vehicles to Plug-ins - see: plug-inAustralia.org

    Personally, after being screwed by the arabs, the oil companies and govt oil taxes all these years, I am determined that the time has come, not just for countries to become energy independent, but our family as well.

    The only way I can see to do that is via solar or wind de-centralised electricity generation connected to the grid for home and business use and that specifically includes our vehicles.

    As soon as Concentrated Solar Systems become available at a price which, when amortised over the life of the system (20 years) is more or less equal to the cost of electricity from the grid.

    Fortunately that objective is getting closer with Concentrated Solar (CPV) and Plug-in Electric Vehicles (PHEV's)

    We recently traded in our much beloved Subaru on a Prius. This cut gas costs in half, but more importantly opened up the possibility of adding an off-the-shelf plug-in conversion kit should the price of oil justify that before Toyota introduce their own plug-in version in 2010.

    We'll probably end up paying a bit more but I figure it's worth it to lose that feeling of being screwed....../Chris

    2008 Aug 18 07:57 PM | Link | Reply
  •  
    I understand where you guys are coming from with your "exotics," but I won't live to see most of that and you may not, either. Meanwhile, I'm getting burned up by $4 gasoline, and I've had enough. Go, Boone!
    2008 Aug 18 08:58 PM | Link | Reply
  •  
    NG is a great bridge fuel to renewables.

    Those millions of car batteries will require all the nickel in the world to make, so don't expect electric cars to go mainstream until EEstor gets its ultracapacitor working!!
    2008 Aug 18 10:26 PM | Link | Reply
  •  
    WOW you guys like the T.Boone plan!!!! Did any one go and sign up? No legitimate policies will be made by gov't. Money talks and with T. Boone's following, big things could happen.

    Check out my idea.
    push.pickensplan.com/f...
    2008 Aug 19 12:54 AM | Link | Reply
  •  
    Chesapeake is going to plummet. Simple reason for that: They are on the verge of experiencing Peak production. Just have a look at the numbers of Texas Railroad Commission.
    Statewide monthly gas well gas production for Chesapeake Operating:
    Oct 07 32.9 Nov 07 31.5 Dec 07 31.1 Jan 08 29.9 Feb 08 27.4 Mar 08 27.8 Apr 08 25.7 May 08 25.1
    So, production plummeted by 24% within 8 months. Within these 8 months NG prices surged from 6.17 (Q3 2007) to 11.34 (Q2 2008).
    Also: According to Texas RRC, output from the Barnett Shale peaked in Dec 07 with 3.07 BCF and declined to 2.61 BCF (May 08) so far.
    Shale NG is hot air, just declining too much.
    2008 Aug 19 06:31 AM | Link | Reply
  •  
    The Haynesville shale near Shreveport is said to be 2 to 3X the Marcellus, which drawfs the Barnett. I believe Chesapeake has a major position there, too.

    Funny how we're coming up with all these new shale gas fields in the space of a few years, isn't it? Could be we have MASSIVE domestic gas reserves we never explored for. Not to mention the OCS.

    But Boone's not taking any chances. That's why he's developing wind farms, to take NG off the electric grid so it can be substituted for gasoline and diesel as a transportation fuel.

    And by the time we need them, we may well have surmounted the technological issues for developing gas hydrates. They have 160X the energy of NG, and the U.S. holds the world's largest known reserves.

    2008 Aug 19 07:44 AM | Link | Reply
  •  
    In short, then, NG is a viable bridge to our energy future. Not that we really have a choice.
    2008 Aug 19 07:49 AM | Link | Reply
  •  
    Paul etc., NG is a very short bridge.
    2008 Aug 19 12:50 PM | Link | Reply
  •  
    Let's hope so, NJB. But it'll be lights out for me (I'm 62 ) before anything else becomes meaningful.
    2008 Aug 19 01:23 PM | Link | Reply
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    But I think you know me well enough by now to understand I'd like us to get to this brave new energy world as much as the next guy. There would be nothing better than to get all our power from the sun, wind, waves and other technologies that haven't even been invented.

    But we're SO far away from that. Maybe they'll be making meaningful contributions by, say, 2050. Or maybe not. It depends to a great extent on what the government does. The LESS they interfere with markets, the BETTER our chances. But so far, at least, they're going in the OPPOSITE direction.
    2008 Aug 19 01:34 PM | Link | Reply
  •  
    Boone is the only guy who has a chance for the foreseeable future. He isn't cowed by their lobbyists, knows more than their consultants and doesn't need their money.

    We're very LUCKY in America, you know. Seems like the right guy shows up at the right time when we need him most. Other examples might be Edison, Ford, FDR, Reagan, Friedman and Gates. I'm sure we can think of several others.
    2008 Aug 19 01:46 PM | Link | Reply
  •  
    Boone's in a hurry, too. At 80, he doesn't have time to play around. I'm sure he doesn't suffer fools well, either.
    2008 Aug 19 01:50 PM | Link | Reply
  •  
    Keep the lights (NG?) burning, Paul K. I'm 85; my one and only 90. Most prolific scribe, keep it coming!
    2008 Aug 19 02:26 PM | Link | Reply
  •  
    I left out one of the most important, Einstein. Sorry about that, Albert.
    2008 Aug 19 02:27 PM | Link | Reply
  •  
    Bless you, Woodsey. My folks made it to 92, so you may have a ways to go yet. When and if I make it to 85, I'll be tickled to see the keyboard, not to mention knowing what I'm typing. Hang in there, buddy!
    2008 Aug 19 02:32 PM | Link | Reply
  •  
    The big thing to watch is Proposition 10 in CA. NG might really make it.
    Pelosi owns 22,000 shares of CLNE. The Dems behind T.Boone would make investing in this area a worthwhile risk
    2008 Aug 24 11:56 AM | Link | Reply
  •  
    Our family owns natural gas vehicles and we love them. They drive so much cleaner and as the article stated, that's less gas I am paying for from over seas. We bought our vehicles at an auction. I did write to GM & Ford since I am interested in a Natural Gas Truck, but no replies as of yet.
    2008 Aug 25 10:45 AM | Link | Reply
  •  
    Solar power could replace much of our energy shortage. There is no shortage here and it can already be used to produce electricity. It is going to be here in frequent use sooner than we think. Georgia Barham
    2008 Aug 25 09:23 PM | Link | Reply
  •  
    Paul K. Good list of those developing things needed but I would take issue with you about Edison. The electric light bulb was so obvious that someone would have perfected it. But it took original thinking by Tesla and Geo. Westinghouse to show how wrong Edison was about producing and distributing electricity.


    On Aug 19 01:46 PM paulk8756 wrote:

    > Boone is the only guy who has a chance for the foreseeable future.
    > He isn't cowed by their lobbyists, knows more than their consultants
    > and doesn't need their money.
    >
    > We're very LUCKY in America, you know. Seems like the right guy shows
    > up at the right time when we need him most. Other examples might
    > be Edison, Ford, FDR, Reagan, Friedman and Gates. I'm sure we can
    > think of several others.
    2008 Aug 26 04:38 PM | Link | Reply
  •  
    Ozarker - LNG is not CNG, CNG is if anything less hazordous than gasoline. In a crash gasoline runs out all over the ground and under things then lights up.. CNG (and compressed hydrogen) go up into the atmosphere and burning if anything is just an almost instantaneous whoosh. Try lighting a baloon full of CNG or H and you can stand right beside it with at most some singed hair.


    On Aug 18 10:29 AM paulk8756 wrote:

    > Ozarker,
    >
    > If you don't mind, what are some of the challenges Pickens faces
    > in utilizing LNG powered heavy trucks? I understand they're building
    > the specialized motors for them now. Is the fuel more dangerous to
    > handle than gasoline?
    2008 Aug 26 04:53 PM | Link | Reply
  •  
    Gas Utilities have facilities to liquefy NG [the natural gas pipe-line is designed as a "just in time" delivery system - often they over-purchase and are forced to remove the NG from the pipe-line and liquefy it for storage], why not create NG refueling depots at these sites
    2008 Sep 12 03:23 AM | Link | Reply