Natural Gas: Coming to a Vehicle Near You?

When I recently made some observations on the progress of the Pickens Plan for American energy security, I downplayed the momentum behind T. Boone's ideas surrounding natural gas as a transportation fuel. It looks like I spoke too soon.

The very same afternoon, a trio of Senators (including Majority Leader Harry Reid) introduced the NAT GAS Act in Congress. This legislation, which Reid may be able to stick into the forthcoming Senate climate bill, would provide a host of tax breaks for natural gas vehicles (NGVs). Basically, most everything for which Chesapeake Energy (NYSE: CHK  ) began campaigning last year.

The U.S. market for NGVs is currently tiny, with Honda Motor's (NYSE: HMC  ) Civic GX currently representing the sole passenger vehicle option, despite NGVs being rolled out by American carmaker General Motors in foreign markets like India and Thailand, for example.

Being a Civic owner myself, I was curious to check out the specs. What first jumped out at me is that the GX has a higher sticker price and poorer highway fuel economy than the Civic Hybrid Sedan. The car does shine in the realm of fuel cost, however, which keeps the payback period quite short. Unlike some of the ridiculous luxury hybrids out there, this does in fact look like a reasonable consumer option.

A bigger sticking point, I think, is the lack of fueling stations. Besides Pickens' own Clean Energy Fuels (Nasdaq: CLNE  ) , there isn't much of a concerted effort to roll out compressed natural gas pumps around the nation. Of course, the NAT GAS Act (a cute acronym for New Alternative Transportation to Give Americans Solutions) covers refueling stations as well as the manufacture and purchase of NGVs. So, it's at least possible for the legislation to move us beyond the current chicken-and-egg impasse.

Given the recent success of ExxonMobil (NYSE: XOM  ) , Southwestern Energy (NYSE: SWN  ) , and the rest of the energy industry in unlocking massive natural gas deposits, I can certainly see the appeal of phasing in natural gas in place of gasoline derived from crude oil. On the question of whether natural gas trumps electricity or green gasoline, however, I'm far less convinced.

So, what's your favored future fuel, Fool? Please leave a comment below.

Chesapeake Energy is an Inside Value recommendation. Get your portfolio's motor running with any of our newsletters free for 30 days.

Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his CAPS profile or follow his articles using Twitter or RSS. The Motley Fool owns shares of Chesapeake and has a potent disclosure policy.


Read/Post Comments (18) | Recommend This Article (20)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 15, 2009, at 2:01 PM, rrb46 wrote:

    Good report. But has anyone seriously computed the volume of natural gas it would take to run the cars, buses and trucks in the USA? Give it a shot. I think you will find that there isn't enough natural gas to supply the CNG needed for the additional vehicular market in addition to current demand. Said differently, while there may be an oversupply of natural gas for current use, add to that the volume of CNG to run the country's vehicles and the capacity may not be there. Just a thought ....

  • Report this Comment On July 15, 2009, at 2:09 PM, Oldfool103 wrote:

    There is a prototype pedal generated electric bicycle being developed in Germany, which will top out at about 50 mph. No, you won't be able to power a bus or a transport or an airplane (at least not yet); but it would solve any number of problems around a completely green personal transit devise used in city travel. I bike now, as much as possible, to lower gasoline bills and CO2 emissions. I would love one of these.

    http://news.bbc.co.uk/2/hi/science/nature/8147104.stm

  • Report this Comment On July 15, 2009, at 2:54 PM, htownjester wrote:

    The key is to move the emissions from 100 million tail pipes to a much smaller number of industrial energy producers. You do this by going electric at the car. This shifts the pollution to the affore-mentioned smaller number of much larger energy producers- power stations. You then move those onto nat gas, retrofit with carbon sequestration, mix in small amounts of solar, wind, nuclear (surprise! the cleanest), etc. Even clean coal once the technology becomes viable. I don't see another viable plan for affecting the majority of vehicles. Though I agree a nat gas option at the pump will give consumers choice and will also cut emissions- but it will only ever be a niche market.

    Once the batteries get cheap it will be all electric cars.

  • Report this Comment On July 15, 2009, at 5:08 PM, pgilligan wrote:

    If my home is heated with natural gas then couldn't we come up with an adaptor to fill my tank with natural gas at home?

  • Report this Comment On July 15, 2009, at 5:44 PM, ironyworks wrote:

    There is plenty of nat gas in the US to run our vehicles for a long time, as well as the technology to extract it.

    Even if we ran out of that ( we won't), there is a vast store of methane hydrate in the deep oceans.

    While better than oil or coal, nat gas is far from carbon neutral...but it offers us a bridge to stand on while we develop alternatives like cellulistic based fuels, good batteries, cheap solar voltaics and geothermal ( not so clean).

    Nuke plants are hardly clean..We have no safe and inexpensive way to deal with the waste which will remain deadly as long as people are around. Additionally, how many modern nuke plants have been successfully decommissioned and the land returned to public use??. The costs will be crushing and will be deferred nauseum.

  • Report this Comment On July 15, 2009, at 5:45 PM, jfeisal wrote:

    pgilligan-yes you can have a cng tank installed in your garage it is a very small box with a pump to fill up your cng vehicles. I believe it's called Phill and is made by FuelMaker. Also, you can fill up at most service sites for your local natural gas company on top of the stations that offer cng.

  • Report this Comment On July 15, 2009, at 6:00 PM, IvanGrosniy wrote:

    CNG already is in common use for buses and some delivery trucks. The companies that operate them have their own refueling stations. The home devices for filling your tank are too expensive. That is a big drawback because the range on a CNG Civic is only about 200 mi.

  • Report this Comment On July 15, 2009, at 6:10 PM, dividendhound wrote:

    I admit that I know nothing about how nat gas works in cars. Are they as safe as normal cars - is the gas actually compressed, thereby causing a potential explosion risk where there is less of one now? If there is no safety risk, it sounds like a good way to diversify away from oil - it's not that everyone has to have one, but if enough people have them it might help.

  • Report this Comment On July 17, 2009, at 2:46 AM, Bobo4321 wrote:

    The "chicken and egg" problem has be solved. You can fuel your car at home with a "Phill" that Honda just sold to FSYS. Kinda like a plug-in hybrid only it uses gas

  • Report this Comment On July 17, 2009, at 3:42 PM, Ecrum65 wrote:

    I dont think we want to replace all of the vehicels with one kind of fuel. If we could get 1/3 using regular gas and diseal,1/3 NG and 1/3 using electricty I think there would be plenty of all three to go around. And just maybe we would not have to import so much oil.

  • Report this Comment On July 20, 2009, at 12:26 PM, dlscng wrote:

    T. Boone Pickens plan is pushing the use of natural gas both LNG and CNG for more use in commercial fleet operations.Converting or buying a dedicated NGV is not really recommended due to the lack of fueling stations open to the public.Natural gas as a transportation fuel has been proven to work time and time again.I work for a local transit that use cng buses and have seen the proof in clean cng fuel.Natural gas is about 90% methane and can be extracted from landfills so there should never be a short supply of methane in this country.Compressed natural gas is typical compressed to 3000-3600 psi so safety concerns play a big part in down playing this fuels potential.The only way it can be explosive is if it mixed with the right amount of oxygen to be a combustible fuel.The safety factors required for the vehicle storage tanks and all hardware involved are far better than on a gasoline vehicle.What better way to boost the economy than to invest in a fueling infrastructure to use a proven alternative fuel.

  • Report this Comment On July 20, 2009, at 2:22 PM, lepton2quark wrote:

    TRUCKS, NOT CARS.

    The article talks mostly about nat gas in cars. This may come in time, but the immediate opportunity is in heavy trucks. Today, the transition is already well underway move city buses, delivery trucks and service trucks such as garbage trucks off of diesel fuel and onto liquefied natural gas (LNG).

    The really large impact will be long-haul trucks. These hard-working vehicles consume nearly a third of all petroleum, and there is no other alternative -- hybrids and all-electric power don't work for vehicles that need to run at high torque all the time. Switching to a cleaner, more abundant fuel for heavy trucks will be a huge benefit.

    Natural gas is made mostly of methane, which is far cleaner that diesel fuel. Burning methane produces only about half as much CO2 as diesel for the energy produced, and nearly no pollutants.

  • Report this Comment On July 21, 2009, at 11:22 PM, nomorearaboil4us wrote:

    Well, I think anything is better than importing oil. If we have all the natural gas we need here in the US lets put Americans to work instead of exporting all our Dollars to our enemies. "Da," I think it makes since. But realize the oil companies and the Arabs have alot of politions in their pockets. This has always been the problem just like the Tobaco Industry was. Hopefuly Boone Pickens will be the driving force. I would buy a CNG car before ever buying another gasoline car again.

  • Report this Comment On July 22, 2009, at 5:14 PM, Melaschasm wrote:

    From the calculations I have done, it is much better financially and for CO2 emissions for me to buy a car and have a mechanic install and CNG kit.

    A CNG kit allows the vehicle to run on either regular gas or compressed natural gas.

    While there are not a huge number of CNG stations, you can find them via internet searches. The medium sized city I live in has three stations, one which is near my home. This would allow me to exclusively use CNG for my regular commute. Only when I have out of town vacations would I be faced with buying regular gas, or doing searches to find stations along my travel route.

  • Report this Comment On July 22, 2009, at 7:12 PM, williamvaryb wrote:

    Winston Churchill said "Americans can always be counted on to do the right thing after trying all the other alternatives". The last and inevitable choice is nuclear for electricity, natural gas for ALL vehicles (its more efficient the smaller the vehicle) and oil when you really have to use it. The nuclear waste problem is soluble and nobody has declarede war on France for saying and doing so. Politics ladies and gentlemen is a business of HARD choices. How many years and useless wars will we have to wait for an AMERICAN STATESMAN to make the right choice this time?

  • Report this Comment On July 26, 2009, at 7:04 PM, lepton2quark wrote:

    As I stated above, the near-term opportunity is in heavy trucks, not cars. the NAT GAS bill emphasizes incentives for commercial trucks, by putting tax deductions as high as $100,000 for certain items.

    On the other hand, I agree that autos can run fine on CNG. But retrofitting an existing car involves putting a CNG tank somewhere. Since there isn't anyplace else, it goes into the trunk, taking up valuable space. This will be solved by car companies designing cars with CNG in mind. They will change the layout of the seats, trunk, chassis, etc. so that the CNG tank fits nicely and the car is just as useful as before. This will all happen, but the big trucks will come first.

  • Report this Comment On August 02, 2009, at 12:49 AM, 2seetheway wrote:

    Put simply, Nat Gas is the only logical choice of altternative energy for ALL vehicles. Diesel runs a close second, but there is a 6% additional tax levied on it. Politically and Economically it would seem to make sense. Even current gasoline buggies could be converted to Nat Gas rather easily (maybe a Gov't subsidy to convert?). There is the drawback of lack of fueling stations, but the Gov't could easily change that problem too. I just don't see Electric or Fuel-Cell being the future fuel. Just too many negatives with costs, lack of battery power, lagging technology, insufficient electric power grid, etc. It's even clear to a "fool" that Nat Gas is the future "fuel". So, load up on your shares of Southwestern Energy ( they just hit a new motherload of supply). Relax for 10 years and watch your money grow.

  • Report this Comment On August 20, 2009, at 1:32 AM, claudewilbur wrote:

    Speaking of volume, have you ever looked into the trunk of an NG vehicle? There is very little luggage space because of all of the tankage. And the cruising range doesn't quite match a gasoline powered vehicle. For passenger cars, I think that the only viable market segment is as a commuter vehicle.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 941622, ~/Articles/ArticleHandler.aspx, 10/23/2014 11:05:36 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement