In the grand scheme of natural gas vehicles, or NGVs, America is well behind the adoption curve. Of the more than 16 million NGVs on our planet’s roads, fewer than 1% are in the United States. With so many supposed advantages over traditional fuels, in concert with America’s obvious abundance of the resource, why aren’t we pushing hard for this?
The NGV advantage
Charlie Blanchard, the lead analyst for gas at Bloomberg New Energy Finance (BNEF), is bullish on NGVs. He sees real promise for natural gas in heavy-duty vehicles. The technology already enjoys significant penetration in refuse markets, shuttle buses, and municipal fleets, even though the market for natural gas in general transportation is underdeveloped.
According to industry groups, the use of natural gas in vehicles present numerous environmental and social benefits.
- Carbon dioxide emissions are reduced by 20%-30%.
- Overall greenhouse gas emissions are reduced by 20%-29% as compared to diesel and gasoline.
- The U.S. imports nearly 50% of all its oil used in the country — about 3.1 billion barrels in 2012, equivalent to $312 billion — whereas natural gas is an abundant domestic resource.
- The natural gas industry is responsible for nearly 3 million jobs in the U.S., either directly or indirectly.
While there is surely a healthy amount of industry propaganda embedded in the above points, they are not entirely off base. They’ve certainly caught the attention of the Obama administration, which is pushing for tax breaks for natural-gas-powered trucks as a means to cut U.S. dependence on foreign oil.
More than just a pipe dream?
The recent BNEF Summit dedicated an entire session to the promise of NGVs. Representatives from Clean Energy Fuels Corp (NASDAQ:CLNE) and Questar Corporation (NYSE:STR) had a lot to say about the future.
Andrew Littlefair, Clean Energy Fuels Corp (NASDAQ:CLNE)‘ CEO, explained that his company is totally focused on natural gas for transportation, currently operating in 43 states. The company saw the perfect opportunity in abundant domestic natural gas reserves and the tremendous advances in engine technology. Thus was born American’s Natural Gas Highway, a concept under which Clean Energy Fuels envisions a liquefied natural gas, or LNG, station every 250 miles on major corridors. That goal does not constitute a perfect deployment, but it does enable heavy-duty trucks to go from coast to coast.
Ronald W. Jibson, Questar Corporation (NYSE:STR)’s chairman, president, and CEO, said that Clean Energy Fuels Corp (NASDAQ:CLNE) had moved the needle on this topic, and had served as a wake-up call to the U.S. about the opportunities inherent in natural gas. (It was a bit of a corporate love-fest.) Questar Corporation (NYSE:STR) is fully integrated across the natural gas value chain, offering development, transportation, and distribution.