ddannywms

America Needs a Natural Gas Transportation Infrastructure

To the amazement of many, it always gets back to supply and demand. Ford and GM stopped selling CNG-fueled vehicles, mostly run-of-the-mill pick-up trucks, because they were not selling enough. I know Ford stopped selling their converted F150s four years ago.
Regarding the chicken-n-egg, here's a bit of first hand experience. The oil company I worked for at the time was piloting a network of CNG refueling locations the early 1990s and reached a high-water mark of 57 stations in a half dozen markets before pulling the plug in 1996.
The plan called for splitting the cost of the on-site compressor with the local station operator and for company sales people to sign up local fleet operators with an offer of incentives to convert a portion of their vehicles to CNG. Then we'd try to sign 'em up to a long-term, price-hedged supply agreement. For a while it worked. In fact, it worked so well that in just about every market, the local natgas utility began following our salesmen to the fleet operators office and offering a lower price than we could handle. Well, guess what happened to our carefully cultivated customers? But, that's competition for you.
So, once the company saw the writing on the wall -- uncertain demand, expensive equipment that crimped expansion, cut-throat competition and weak prices -- killing the program only made sense.
But if you were in Atlanta for the 1996 Olympics, you probably saw the city buses and many official Olympic vehicles sporting CNG logos. So, it has been tried. However, the question of which comes first: an adequate number of CNG-vehicle customers for the retailer to justify his investment, or assuring the CNG-vehicle buyer of someplace to refuel them, remains the sticking point.

Bullish Amid Oil Majors' Lay Offs

Everybody's waiting for that chicken to cross the pipeline. Cuts have been made, rigs laid down and storage tanks at Cushing are brimming. So, which comes first, the price chicken lands on a solid floor, or the supply/demand egg sees the yearly seasonal fuel blend switchovers, refinery turnarounds and spring driving increases, the former two of which restrict supply while the latter pushes up demand. Chicken in a basket anyone?