Natural gas production in the U.S. is in full swing, and surely with so much production, companies are going to look for attractive, affordable ways to entice consumers.
With the cost of natural gas reaching historic lows throughout the country, the interest in natural gas vehicles (NGVs) is growing.
The problem is a lack of infrastructure for the necessary fuel, whether it be compressed natural gas (CNG) or liquefied natural gas (LNG), which leaves many consumers on the fence.
And initial costs are still way too high. An NGV is still about $10,000 more than a comparable conventional vehicle. For those who do own an NGV, a home refueling unit is a likely purchase, and that too requires too much upfront cost at the moment.
But momentum is picking up. Did you know that natural gas is at $1.40 per equivalent gallon of gasoline? And owners of NGVs with home refueling units are likely save more than $100 a month on refueling their vehicles.
These home refueling units are the key to getting the American public interested in natural gas vehicles. Because of the potential, natural gas refueling infrastructure is experiencing tremendous growth.
You will start seeing more public refueling stations to compete with gasoline, and more and more vehicles will be rolling out to supply the demand.
Driving Force
Right now, natural gas vehicles are still a foreign concept to many of us, but U.S. natural gas production is booming, driving prices down and catching fire.
Companies like General Electric Company (NYSE: GE), Whirlpool Corp. (NYSE: WHR), and Eaton Corp. (NYSE: ETN) are all working on building improved home refueling systems for a tenth of the current price. These units will be sold to American citizens with natural gas supplies already connected to their homes, Reuters reports.
Energy providers in Georgia, California, and Utah are in talks to become distributors when these units become available in the next couple of years. Honda Motor Co Ltd (NYSE: HMC) has also expressed interest in the new technology.
But public refueling stations are also vital to the whole natural gas movement. We’ve got plenty of gas stations, but we need more NGV refueling stations if this thing is going to catch on. The number is growing; according to Transmission & Distribution World, there will be 30,000 stations worldwide by 2020, 40 percent of which will be installed in the U.S. between 2013 and 2015.
Holdups in Infrastructure
But skepticism remains. It still seems so far away, and converting to a new fuel will certainly be difficult for many to swallow.
According to Reuters, Italy’s BRC Fuelmaker is one of the only manufacturers of home refueling units, and it has met less than stellar results. There simply aren’t enough cars to choose from, so people aren’t buying. Honda’s Civic GX is one of the only options for natural gas-powered passenger vehicles.
The some-odd 60-70,000 NGVs on U.S. roads today are just a speck of dust compared to the 200 million that use gasoline every day. And there are only 605 public CNG stations in the U.S., according to Reuters, versus over 120,000 gas stations.
That’s got to change.
A shift in American fuel is not going to happen overnight. We Americans love our gasoline too much, but the alternative will get easier – just look at the electric vehicle market and how it has begun to see rising sales in recent years. A lot of that success has to do with the option to refuel at home.
NGVs have twice the range of most EVs on the road today, and they refuel faster, too.
There is plenty of wiggle room for NGVs to find its rightful place alongside EVs in the marketplace and show an alternative to gasoline.
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Natural Gas Refueling Companies
And because of the great potential, companies are gearing up.
A small company called Go Natural CNG, backed by Parker Hannifin Corp (NYSE: PH), has a home refueling system that’s ready for distribution. The system fills up quickly and, according to the company’s research, can last for 20 years.
Meanwhile, GE has a $1.8 million government grant to develop its system, according to Reuters, which will likely retail at $500. And the company is moving into Canada as well, making its first entry into CNG fueling solutions there in a deal with Chelsea Natural Gas Ltd.
Whirlpool has a deal with Chesapeake Energy Corp (NYSE: CHK) for a similar endeavor in home refueling.
And Eaton received a $3.4 million government grant to develop its own technology, set to be made available by 2015 and, like GE, cost right around $500.
Natural gas is a logical move away from gasoline. If we can run our buses, garbage trucks, and other heavy duty vehicles on natural gas and save as much as $2 a gallon in doing so, we owe it to ourselves to make the necessary switch.
The same goes for you – the everyday man – who wants to spend his money on things more worthwhile than gasoline.
The wheels are in motion.
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