Fri August 3, 2012
States Ask Detroit: 'Build Us A Natural Gas Car, Please'
Originally published on Fri August 3, 2012 2:31 am
More than 20 state governors are taking an unusual step to boost the natural gas vehicle industry. Independent of the federal government, they're asking Detroit carmakers to build them a new kind of car: a midsize sedan that runs on compressed natural gas instead of gasoline.
The governors are hoping to boost demand for natural gas cars with their collective buying power. Combined, the states say they could ultimately buy thousands of CNG vehicles to replace their current vehicle fleets — if those cars were available.
Only a few kinds of vehicles currently run on compressed natural gas in the U.S., and only one, the CNG Honda Civic, is a passenger car. Detroit currently offers no natural gas-fueled passenger cars.
Filling up a natural gas car's fuel tank is a cinch — if you live in the right place. Ann Arbor, Mich., for example, has two natural gas pumps. But that kind of infrastructure is unusual in the vast majority of U.S. cities.
Playing Catch Up
Colorado Gov. John Hickenlooper is among the governors supporting the effort. Compressed natural gas, he says, is good for the environment and for the U.S. economy.
Natural gas emits "half the pollutants that come out of traditional gasoline," Hickenlooper says. "It's way less expensive — probably $2 per gallon equivalent less expensive right now — than burning regular gasoline. And it creates all the jobs here — we don't [have to] send billions of dollars to foreign dictatorships."
Domestically produced natural gas is abundant now, thanks to controversial advances in gas drilling known as hydraulic fracturing, or fracking.
And while the federal government has spent billions in stimulus dollars to boost electric cars, little of those funds went to natural gas, says Kathryn Clay, executive director of the Drive Natural Gas Initiative, a consortium of natural gas producers and distributors.
"We peaked a little bit too late," Clay says. When those federal funds were being divvied up, she says, the industry was still figuring out how much gas would become newly accessible due to fracking.
Now the industry knows how much may be available — and it's a lot. Enough to last for a century, according to some analysts.
Clay says that means "our entire energy landscape as a country has changed."
Expensive ... For Now
Private companies with big fleets of gasoline-hungry trucks have already asked automakers in Detroit to build versions that run on cheaper natural gas.
Chrysler has responded with the 2500 Ram heavy-duty truck. It runs on CNG, but has a backup gasoline tank in case drivers can't find a natural gas pump. It also has two natural gas tanks taking up some of the space in the truck bed.
"That's the one difficulty of a CNG," says Chrysler engineer Michael Cairns. "You need to package fairly large tanks to be able to have a reasonable range."
And those tanks help make these vehicles expensive. This Ram truck costs $10,000 more than a gasoline version, and the CNG Civic costs $4,000 more than a gasoline model.
But Cairns says with enough demand, the costs will go down.
"It has to be engineered properly," Cairns says, "but we know how to do this."
Fuel Abundant, But Demand Lags
No car companies have disclosed if they plan to bid on the governors' proposal. Honda and Chrysler could have an edge if they do — Honda because of its existing CNG Civic, and Chrysler, because its partner Fiat builds CNG passenger cars in Europe.
But car companies are loathe to start new car programs unless they know the demand will be there.
Oklahoma Gov. Mary Fallin says it will. The governors extended a request for proposals to car manufacturers to develop the cars in late July. And Fallin says participating states will encourage their cities, universities and private companies to buy the vehicles, too.
"We're serious about this," she says. "We hope to have those proposals and make some awards by October. So this is a real deal."
Early efforts to market CNG cars to U.S. consumers flopped, so natural gas producers have a lot to gain if the effort to jump-start the industry drives up demand for the gas.
One of North America's largest natural gas producers, Encana, recently announced a huge loss, because gas supply is now far outstripping demand.