What's Stopping Mass Adoption of Natural Gas Vehicles?

Join Motley Fool analyst Brendan Byrnes for a conversation with Ian Scott, the executive vice president of Westport Innovations' On-Road Systems segment, which works with OEM partners such as Ford, Volvo, Kenworth, and Peterbilt to produce natural gas-0powered vehicles in the U.S. and elsewhere.

In the following video, Scott describes the progress being made in natural gas infrastructure among companies such as Clean Energy Fuels and Royal Dutch Shell, with as many as 560 stations projected to be in place by the end of 2015.

To watch the full interview, click here.

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Brendan Byrnes: When you look at some of the big companies using natural gas vehicles -- Waste Management, UPS, FedEx -- UPS actually is going to increase their natural gas fleet to 800 by the end of 2014. That's up from 112 right now.

What do you think overall when you look at the landscape? What's the biggest barrier for companies embracing natural gas? Is it the infrastructure? Is it companies like these that need to come in and really take the lead and show that it's possible and the economics work? What do you think is the barrier?

Ian Scott: I think historically it's been infrastructure, has been the biggest one. But now we see -- and the UPS example is a great one -- we see where infrastructure is no longer an impediment. I think we're getting stronger infrastructure but we're not at critical mass yet, where we need to be in order to just see massive adoption of natural gas.

Companies such as Clean Energy and Shell and ENN, they're doing a great job in building out particularly liquid natural gas stations right now. I think that's really going to help.

Our product costs more. It costs more than a diesel or a gasoline product, so what you're doing is you're paying up-front capital cost, but more than making that back in the fuel savings. We have to do our job as well, in order to get the product cost down, and we're working aggressively to do that. That will come with volume, obviously, as well.

The stations are being built. We're going to sell more product. That will allow more stations to be built, and I think we're starting to see it really pick up right now.

Byrnes: Could you talk about infrastructure? We have America's natural gas highway being built out by Clean Energy. What's the improvement in infrastructure you've seen over a year or so, and where do you think this is going over the next couple of years?

Scott: It's amazing. We said in our recent Q-Call that, from announced LNG stations, we're looking at 560 by the end of 2015. The load that's available for trucking in particular is just tremendous.

We've seen other companies come in now; you mentioned Clean, but Shell just made a large announcement with respect to TravelCenters of America. We have -- ENN has made announcements, other companies are putting in fueling stations as well.

I think that we've gone from, "Is the infrastructure going to be built?" to "It's being built, being built rapidly, and now we need to continue to provide the products to the marketplace."


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  • Report this Comment On August 31, 2013, at 12:20 PM, JustOneBrain wrote:

    Chrysler Corp. has been building NG powered autos for many years. They are mostly sold to fleets. Their engines have had the hard valve seats needed for LPG for as far back as the 1940's. If you go to a dealer and ask for one, be sure to get a knowledgeable sales person because most will try to sell you something off of the lot.

  • Report this Comment On August 31, 2013, at 1:03 PM, pilotojoser wrote:

    I can buy the i

    Lack of infracstructure but not the difficulty in car construction nor its cost .actually it may be even easier and cheaper to produce natural gas cars. This technology is super known and very old as well as proven.

  • Report this Comment On August 31, 2013, at 2:49 PM, citizenfor wrote:

    I would love to convert my old Jeep. But the price per pound will rise soon as the politicain get their tax hungry hands on the natural gas for taxes.

  • Report this Comment On September 01, 2013, at 6:22 AM, fpl1954 wrote:

    Natural gas only makes sense for fleet cars or salespeople who drive more than 25,000 miles a year. Unless you drive over 25,000 miles, it's cheaper to burn gasoline for the life of the car than convert to gas. If you drive 50,000 miles a year it really makes sense.

  • Report this Comment On September 01, 2013, at 6:24 AM, fpl1954 wrote:

    We need the car companies to produce a natural gas model with all the conversions built in. Then they could get the price down to where it would make sense. However, they aren't likely to do so until enough of us switch. Catch 22, same problem electric cars have, much cheaper to operate but cheap doesn't help when you are sitting by the roadside out of energy because the distance between energy sources exceeds your range.

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