Why Aren't More Vehicles Running on Natural Gas?

Join The Motley Fool's Austin Smith for a video chat with Sandeep Munshi, director of technology and development at Westport Innovations. Based in Vancouver and with facilities in eight other countries, Westport is the industry leader in natural gas engines and vehicles.

Munshi doesn't see any particular obstacles to natural gas adoption, but rather a series of steps that need to be taken, each of which takes time. He also addresses the issue of intellectual property in this ever-expanding field, and why Westport isn't concerned about patent expiration.

To watch the full interview, click here.

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Austin Smith: From a technology perspective, what do you see as the biggest prohibitor, or the thing that's restricting natural gas vehicle adoption today?

Sandeep Munshi: I don't see any single prohibitor that would prevent adoption. I guess with any technology, when you're talking shifting from traditional means of transportation or traditional technologies -- that includes diesel and gasoline engines -- it takes some time.

Just the inertia -- you require the infrastructure, you require public awareness, you require the investment. It's kind of a merging of all these efforts that is required to transform the market from where it is today to where you want it to go.

That, itself, takes time. You have to be on your toes to meet those requirements, and I believe at Westport we are working toward that.

It's not just the technology. It's not just the fuel. It's not just the engine. It is the whole spectrum, from the supply chain, the technology, the customers, the environmental regulations -- the whole gamut of things that go into making the natural gas as a success story.

I believe that effort needs to be there, and that needs to be continued in order to make that transition.

Smith: From an investor perspective, one of the most exciting things about Westport would seem to be your intellectual property and your big patent portfolio, but at some point the useful life of patents ... they expire.

I'm wondering what you guys have done to preserve that intellectual moat around the company.

Munshi: Good question. Over the years, Westport has been a leader when it comes to natural gas fuel and engine technology-related intellectual-property portfolios. We have the largest number of active patents that relate to all the variety of the aspects of natural gas engines and fuel.

It includes the engine itself, the combustion in the engine, the fuel system, the after-treatment, the specific components that go on a natural gas vehicle -- the whole spectrum of technologies that make it into a natural gas fuel and natural gas engines.

We have patents active in all of these fields, and we continue to invest very significant resources in maintaining our leadership position when it comes to patents, new technologies, new innovations.

I would also say our proprietary knowledge, which is not always -- IP includes patents plus proprietary knowledge, so there is that part. Yes, our patents that may be 15, 17 years old are coming close to expiring, but in the last 15 years, every year we continue to file for new patents.

The state of the art when it comes to natural gas engines is changing, is rapidly evolving, and we continue to invest and innovate in that space, so I believe that's an important consideration, but we do not worry about it, because we continue to invest and make sure that we maintain our leadership in this area.


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  • Report this Comment On August 24, 2013, at 1:50 PM, Kpitikos wrote:

    The Road blocks are there they call them OIL COMPANYS.

    There never be a free techology for car that use enything exept gas . The oil co own all the politicians

  • Report this Comment On August 24, 2013, at 2:34 PM, PapaSan888 wrote:

    I have read and seen too many of this type of hyped articles and videos on Westport Innovations. I have worked in the diesel and natural gas engine business for over 40 years. We were manufacturing and selling both diesel and natural gas engines even before Westport started as a company. And now Westport claims that they are "the leader" in natural gas engines and own more patents on natural gas engines and components than any other company in the world. The two leading manufacturers and marketers of natural gas engines in North America are CAT and Cummins. Westport merely hang their natural gas fuel system components on engines designed and built by CAT, Cummins and others. That does not make them "the leader" in natural gas engines. Tell me where they produce the engine blocks and other systems and components that goes into building a "real" engine and where they actually design and test their engines from the ground up. What a load of BULLS.

  • Report this Comment On August 24, 2013, at 2:52 PM, Twofactorreader wrote:

    Ten years ago I owned a CNG Crown Victoria. At first, I enjoyed the car but after 3 months, the limitations started to drive my daily life.

    When the CNG pumps were at full pressure (3,000 psi), my car had a 100 mile range. When the pumps were at 2,400 psi, the range dropped to 65 miles. In the beginning, a refueling station was within a couple of miles but within a year, that station closed and I was left with two stations in the Washington, DC Metropolitan area. I finally sold it when there was only one station left. At the time, a gasoline gallon equivalent cost more than a gallon of regular gas. The car also had worse mileage than a comparable gasoline engine so fuel costs were 30% higher.

    I periodically drove to western Virginia, which was a 65 mile round trip. When the pumps were at 2,400 psi, I often wondered if I would run of out gas (no pun intended). Unlike a gasoline engine where fuel is ubiquitous, CNG is very scarce. I was so relieved when I sold it.

    The CNG vehicle concept suffers from the chicken and the egg dilemma. In order for CNG vehicles to be feasible, there has to be a sufficient number of CNG refueling stations to support them, otherwise, nobody will buy them. However, a CNG infrastructure is very expensive, a nobody wants to invest in it unless there is a sufficient demand.

    Neat concept, but it will not work for most people.

  • Report this Comment On August 24, 2013, at 6:49 PM, rdmcdonald48 wrote:

    In 1970 I worked in a Ford dealership in North Central IL, which was owned by a supplier of LPG. ALL of the sales staff for the LPG business drove cars that were dual fuel, gasoline and LPG. ALL of our bulk delivery trucks (the units that delivered LPG to the homes and farms) ran dual fuel.

    At that time, we had to install specially hardened valve seats in the cylinder heads and specially hardened valves that could withstand the increased combustion pressure and heat. Now, you can get the LPG engines from the factory.

    These cars and trucks had their engine oil lives extended as a result of the lack of carbon deposits. The economy of LPG was not as good as gasoline, but the cost of the fuel rendered that a moot point.

    The only real draw back was cold weather drivability - LPG doesn't like the cold. But, starting on pump gas, then switching over to LPG was the way to start them in sub-zero weather.

    The point is, we've had this technology for more than 40 years of my working life, and longer. We do NOT have the infrastucture in place (the filling stations) to support it. That takes money, and the public HAS to accept the use of LPG and CNG in order to make it work.

    But then, the people here in the US have never embraced diesel technology in the automobile, even with its proven reliability and improved fuel economy over gasoline. And that, is the people's fault.

  • Report this Comment On August 25, 2013, at 10:03 AM, PapaSan888 wrote:

    I challenge both the author and Mr.Sandeep Munshi to tell us why they think and believe Westport Innovations can be truly classified as an "engine manufacturer" and prove it with facts and figures.

    In my humble opinion, Westport is nothing more than a manufacturer or supplier of natural gas engine fuel system components, much like IMPCO, Donaldson, BOSCH, Woodward Governor, and many of the other engine system component suppliers all over the world supplying parts and components to "real" engine builders and manufacturers like Caterpillar, Cummins, Yanmar, Mitsubishi, Perkins, M.A.N., MWM, Mercedes Benz, etc.

    After well over 10 years in existence when did Westport ever made any profit in their business at the enterprise level? With that kind of performance record, how can the very high P/E ratio this company's stocks are trading at ever be justified? I know the JV enterprise Cummins Westport dresses up Cummins engines with Westport fuel system parts and components and sell small quantities of these engines each year, but that does not make Westport Innovations an "engine manufacturer." These types of custom engineering work have traditionally been done at the dealer and distributor levels by both Caterpillar and Cummins because the low sales volumes do not justify setting up dedicated production lines at their high-volume engine manufacturing plants using highly-skilled and highly-paid unionized labor.

    A lot of fools and speculators seem to be treating Westport Innovations just like another high-flying high-tech company in the realms of computer hardware and software companies listed on the NASDAQ when the so-called "innovative" technology that they design and manufacture is no high tech at all. And this is all being driven by hypes like this specific article here. You can read a lot of similar articles at Seeking Alpha and other websites as well.

    The technology involved is not really "innovative" at all. The science, engineering and technology of building engines have passed their innovative stage a long time ago. Now it is a slow and painstaking process of evolution, with advances being made is little steps and not quantum leaps.

    Take the whole Westport company and they (facilities and people) will fit into a small corner of the extensive and massive research and development centers owned and operated by Caterpillar, Cummins and other world-class engine builders individually, and they (Westport) still have the guts to continue to brag about their being "the leader" in the natural gas engine industry.

    Give me a break!

  • Report this Comment On August 25, 2013, at 12:56 PM, utilitybug wrote:

    Because the gas stored in what classified as high pressure vessel, DOT approval is required for every car design and they take forever and cost a lot of money. Because the sales are/were not high enough the car manufacturers don't even bother with a few exceptions.

    For a sedan Honda Civic is your ONLY option that does not involve conversion kit.

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