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Cummins Inc. (CMI), Westport Innovations, Inc. (USA) (WPRT): A Shift Toward Natural Gas Vehicles

Natural gas vehicles, or NGVs, hold tremendous promise for both the U.S. and the world’s future. Not only is natural gas significantly cheaper than oil on an energy-equivalent basis right now, vehicles running on liquefied natural gas (LNG) or compressed natural gas (CNG) release about 25% less carbon dioxide on average than their gasoline and diesel-powered counterparts.

Cummins Sales GuidanceWhile the nation as a whole seems energetic about the concept of using alternative fuels to power their vehicles, one state is expected to be a clear standout in facilitating the shift toward NGVs over the next year and a half – Texas.

Texas to lead the way in NGV fueling stations
According to Lynn Lyons, a spokeswoman for the Texas Clean Transportation project, the Lone Star State leads the way in the number of proposed fueling stations for natural gas vehicles. Over the next six to 18 months, the number of refueling stations in Texas supplying LNG, CNG, or both is projected to double, from a little over 60 currently to more than 120.

Of the planned new stations, 23 will supply LNG, while the remaining 39 will be equipped to meet the refueling needs of CNG-powered vehicles. According to Lyons, Texas is poised to lead the way due to a combination of factors, including strong support from the state government and enthusiasm among transportation fleet owners.

However, while Texas plans on adding more stations than any other state over the next year and a half, its current refueling infrastructure pales in comparison to California, which boasts the most refueling stations of any state by far. Of the approximately 70 LNG fueling facilities currently dotting the country, nearly two-thirds are located in the Golden State, as are more than a fifth of the nation’s roughly 1200 CNG stations.

According to data from the Alternative Fuels & Advanced Vehicles Data Center, a U.S. Department of Energy program initiative, California had 257 CNG stations and 42 LNG stations as of April 25, whereas Texas had 57 CNG stations and nine LNG stations. In fact, Texas currently lags even New York, Oklahoma, and Utah in terms of the number of CNG stations.

Growth in natural gas as transport fuel
The enthusiasm about NGVs stems from the nation’s massive supply of natural gas, made possible by radical advances in drilling technologies that have helped unlock a previously inaccessible bounty of shale gas. According to a recent study by PIRA Consulting, U.S. vehicles could use as much as 5 trillion cubic feet of the cleaner-burning fuel by the year 2030.