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In a May article entitled Russian Energy and US Implications, I touched on the Honda (NYSE:HMC) Civic GX. This is a natural-gas-powered automotive solution (more information about the car may be found here). I'd like to revisit this issue.

First, I'll  repeat the suggestions I sent to Honda after investigating this car:

  • Make the Honda website for the GX a one-stop information solution center. More information on "Phill", the home refueling tool, more specifics on nat gas capacity and mileage, etc.
  • Include the nat gas fuel tank capacity in the "Specifications" section
  • Bundle the purchase price of the "Phill" with the automobile
  • Be clear about the costs associated with refueling at home.
  • Honda (and any nat gas auto supplier) should have a 24-hour natural gas refueling station at all dealerships throughout the country.

That would be a good and dependable start.

Recently I investigated retrofitting my Toyota Tacoma to run on natural gas just to see what the investigation would uncover. I quickly found out that Toyota (NYSE:TM) does not have such a kit, is not planning to have such a kit, and warned me that any natural gas retrofit on my vehicle would void ALL Toyota warranties. Wonderful.

(I also found out that Utah for some reason is head-over-heels in love with natural gas auto retrofits and that many people and businesses there are retrofitting their cars to run on nat gas. Why Utah? Who knows, but some Googling pops up a lot of Utah folks.)

Anyhow, the warranty issue, cost of a home refueling tool, and the lack of nat gas filling stations are keeping me from making the change. Such a shame that an efficient, clean burning alternative that can run on US-produced natural gas and reduce our country's reliance on imported oil has so many issues associated with making it happen.

I did some back-of-the-envelope calculations: for the money the US has spent in Iraq, we could have (at least) 80 million natural gas powered CXs and the "Phills" to refuel them in American garages. Can you imagine how THAT would reduce our foreign oil bill, strengthen the US dollar, make oil wars unnecessary and strengthen our national security? Doesn't that make the war in Iraq seem completely ludicrous in comparison?

How should US policy change in order to encourage natural gas powered autos?

Well, the first step would be to standardize the refueling tools, nozzles, gas cap fitting, etc. etc. Perhaps this has already been done, but if not, it is certainly STEP1.

STEP2 would be to give any American buying a natural gas powered vehicle a governmental rebate of $2500. This would insure the "Phill" refueling tool was mass produced so that the price would come down. I mean, if Bush can give Bill Gates and Warren Buffet tax cuts, can't we give middle class Americans incentives to buy clean-burning, fuel-efficient cars that run on American natural gas? If every owner had a refueling tool in his garage (many houses in the US already have natural gas hook ups), this would reduce the number of public refueling stations needed to some fraction of the number of gasoline stations today. STEP2 would therefore be to strategically populate the US interstate highway system with nat gas refueling stations, enabling coast-to-coast nat gas traveling. Over time, entrepreneurs would open up stations wherever making a profit on it was possible.

These seem like common sense steps to take in order to mitigate financially strengthening the oil producing countries such as Russia, Saudi Arabia, Iran, Iraq, and Venezuela with our American dollars. I wonder why Congress and the industrial companies are so against it? Why isn't there more public support for Pickens' plan by environmentalist and economists?

I also wonder why NBC initially turned down Pickens' latest commercial on how the Iranians are converting their autos and trucks to natural gas. This is even harder to understand when one considers Pickens recently ordered 667 wind turbines from GE worth over $2 billion dollars(!).

Wouldn't you think the recent economic chaos of our financial system, the huge growth in the US fiscal and trade deficits, and the weakness in US equity markets would be reason enough to start making smart, logical, and strategic energy policy? One would think so... Of course, natural gas powered transportation is only part of America's energy solution. The only solution for a country currently importing 15 million barrels of foreign oil a day (70% of overall US consumption) is a strategic, long-term, comprehensive energy policy like this one.

But that seems to be a pipedream.Congress, the President, and the media all seem to ignore comprehensive solutions while meantime promoting such idiotic ideas as windfall profits taxes, gasoline tax holidays, tapping the SPR, and ethanol mandates. Barron's magazine gives full-page print for these opinions, yet I have been trying to get them to print the strategic long-term comprehensive energy policy for at least a year now. No luck. Can anyone say censorship?

Disclosures: The author does not own HMC, but would own TM if they produced nat gas powered vehicles or natural gas retrofit kits (are you listening, Toyota?). The author does hold stock in some natural gas producers such as ConocoPhillips (NYSE:COP), the largest producer of natural gas in the US. The author also supports the PickensPlan.

Source: The Case for Natural Gas Powered Transportation