CNG Vehicles Ramping Up

At this year’s OKC Auto Show, there was a rather substantial push going on for CNG (Compressed Natural Gas) vehicles, in a special CNG exhibit.  Oklahoma is among the leading states for CNG and the economy here is dominated by the oil and gas industry.  Our downtown lies in the shadow of the giant Devon Energy tower.  Because of our proximity to producers, local service stations are selling CNG for the remarkable price of just $0.99 per gallon of gasoline equivalent (the national average has been around $2.10 for the past year, according to CNGnow).

At first glance, the auto show appeared have CNG vehicles from several auto makers.  Upon closer inspection however, this was not really the case. The vast majority of vehicles at the show were owned by local dealers, and would be offered for sale as soon as the show was over; not so with the CNG vehicles.  The Honda Civic Natural Gas was leased to Chesapeake Energy Corporation (the natural gas company).  The extended cab pickup truck was owned by the Oklahoma Department of Transportation.  Another pickup was owned by OEM Systems, which does CNG conversions for fleet customers.  With the exception of the Civic which is available as a CNG-only model from Honda, all the rest were aftermarket conversions.  The rep from the local Honda dealership said that her dealership did not sell CNG vehicles, but she thought that one of the others did.

The CNG exhibit itself was sponsored by OnCue Express, a service station chain that has been growing its Oklahoma presence in recent years.  They had a map and list of 72 Oklahoma stations that sell CNG, thirteen of which were OnCue Expresses. 

CNG vehicles have been available nationwide for many years as fleet vehicles, for use with company owned refueling equipment.  Oklahoma oil and gas companies have found CNG to be a natural choice for their fleets (which helps explain the preponderance of pickup trucks in the lists of available CNG vehicles).  The availability of public CNG refueling means that CNG vehicles are now very popular with energy company employees, and are a compelling option for the general public.

At my local OnCue Express, I spoke with a customer who was refueling a Chevy Avalanche CNG conversion.  He works for Chesapeake, and obtained the vehicle through a Chesapeake-endorsed leasing program run by a local dealership.  The fill-up was only for about 4 equivalent gallons, but he didn’t mind, since the Avalanche still had a large gasoline tank that would kick-in if the CNG ran out.  He was quite happy with it (his wife drove it), and he had a CNG Civic for himself.

The federal tax credits for CNG vehicles expired in 2010, but there are still generous state incentives in Oklahoma and other states (see State Incentives ).  There are also tax incentives for refueling infrastructure at the federal and state level (Federal Incentives ).  My local home utility gas company Oklahoma Natural Gas (which owns 22 public CNG refueling stations), also provides a rebate for natural gas vehicles, and one for home refueling equipment (ONG CNG Rebates).

As an alternative fuel in the Oklahoma market, CNG looks great.  The current price is less than a third of the price of gasoline.  It reduces CO2 emissions by about 20% (at the tailpipe, perhaps 8% overall DOE data ).  The fuel is readily available from retailers, and the vehicles are supported by state government incentives.  The fuel is produced locally/domestically.  Still, the DOE reports only 112,000 natural gas vehicles in the US today, only a tiny portion of the 15 million worldwide (DOE data).

So what’s going on here?  How could CNG have so many advantages, and yet be so unpopular with motorists?  A big part of the problem is clearly a lack of factory optimized CNG vehicles (the aftermarket conversions only work on vehicles like pickup trucks that have large cargo areas that can accommodate the required tank).  The Honda Civic Natural Gas is CNG-only from the factory, but its 28 gallon tank (which takes up most of the trunk) only holds 7.8 gallons gasoline equivalent, for a range of 240 miles.  This is clearly a solvable problem, since Honda’s hydrogen fuelled Clarity sedan has a 45 gallon tank and plenty of trunk space (see Clarity webpage).

In fairness to automakers, the fracking-driven low natural gas prices have not been around for long:

Still, the DOE’s EIA forecasts that natural gas prices will be flat for the next two years (EIA ng forecast).  That price of $5 per thousand cubic feet (about 1 million BTU) is the thermal equivalent of $0.58 per gallon of gasoline, or 1.7 cents per kWh.

The other thing that is probably holding back CNG vehicles is weak grass-roots advocacy.  CNG (unlike corn ethanol) can be scaled up to greatly reduce our oil dependency.  But most green groups are silent on the issue, choosing instead to throw their weight behind battery electrics and gas-electric hybrids.  It’s a shame, since the hybrids have about the same CO2 emissions and don’t provide much energy security benefit.  The battery electrics have their advantages, but don’t need advocacy, since no public fuelling infrastructure is required due to home charging, and their evolutionary path is dominated by batteries, whose advancement will be driven in either case by the enormous portable electronics market.  Electrics and hybrids are also most economical in smaller cars; CNG works just as well in the heavy duty 10-15 m.p.g pickup trucks that are popular with fleet operators.