Natural Gas F-150

It is a well-known story that with the advent of fracking, there is a surplus of natural gas.

Many experts expect that the world now has enough natural gas to last 250 years.

It is clean, plentiful and cheap.

It is so abundant, in fact, that it has replaced coal as the number one fuel source for electricity in the United States. Power plants used 6% more natural gas than coal in July.

Despite this, natural gas has fallen back below $4 per British thermal unit (Btu) to $3.35.

NG might be a good bet for those companies that can get it piped in, but there have been problems using NG when it comes to transportation…

Mobile power plants, such as the one in your car, consume 29% of all energy. And if you’ve filled up your car recently, you know that $3.60 a gallon for gasoline adds up fast.

Pay Less at the Pump

There are many options out there for those who want to pay less at the pump.

Most involve driving a shoebox or an expensive hybrid.

But there is another solution: compressed natural gas (CNG) cars.

It’s a proven technology that works.

In China, more than 90% of the taxis run on CNG in the 19 largest cities. China’s natural gas vehicle fleet is expected to hit 1.5 million in 2015.

But that’s nothing. Worldwide, the NG fleet was around 15 million in 2011, and is said to be growing at 30% annually.

Somewhat surprisingly, Iran leads the world in NG cars with more than three million on the road.

Majors Enter the Fray

There are problems with compressed natural gas, to be sure… but it makes economic sense because you can fill up at about $2 per gallon equivalent. And in some areas of the country, you can fill up for $1/gallon equivalent.

The downsides are that CNG-powered vehicles cost between $7,000 and $9,000 more than their gasoline-powered cousins; there are fewer natural gas filling stations; and the size of the CNG tank fills up the trunk on most cars.

Still, auto companies think there is still a market, despite the downsides…

Honda has sold a CNG Civic for years in Europe and California. The VW Group offers some of Europe’s top-selling natural gas models and will soon have a natural gas option across its entire lineup. Fiat sells the most CNG cars in Europe, as 5% of Italian cars use CNG.

According to Autonews.com, automakers sold 36,618 CNG cars in Europe in the first five months of 2013, up from 29,901 during the same period last year. That’s solid growth.

Coming to America

Ford thinks CNG will work in America, and its new 2014 F-150 seems to do a good job at handling CNG’s problems…

First, the new F-150 can run on natural gas and regular gas, so you don’t have to worry about being stranded while on a road trip.

Second, the large fuel tank goes in the bed under a workbox. Sure, it will take up some bed space. But it’s not a deal breaker.

Third, given the high and expanding price of gasoline, saving two or three dollars per gallon means the $7,000 premium you pay for the natural gas hybrid engine adds up to ROI only being a couple of years out, if you are a high mileage driver.

There are also benefits in lower gas emissions (CNG vehicles emit between 20% 45% percent less smog-producing pollutants), and the engines last longer due to the clean-burning nature of natural gas.

Ford boasts the F-150 will be the only half-ton pickup on the market like it.

It is equipped with a 3.7 liter V6 that can go up to 750 miles, depending on the size of your CNG tank, and it averages 23 miles to the gallon.

Ford projects that it will sell 15,000 LPG/CNG dual-fuel vehicles this year, which is 25% more than last year. That’s not bad.

This is just one more instance wherein the United States’ natural gas revolution is changing the economics across a whole swatch of industries…

That’s why I’ve been recommending the companies that make the systems that enable natural gas to be usable: pipelines, infrastructure, terminals, and engines.

All the best,

Christian DeHaemer Signature