Commentary - CNG-Powered Vehicles - What's The Problem Here?


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This is a reprise of a January 2011 piece I did on Compressed Natural Gas (CNG) and its advantages in the case of consumer vehicle fuels. Given today's average price per gallon (PPG) price of $3.67 and climbing (as of Feb 25, 2012), one might think that one of the 'rocket scientists' in the Obama administration could figure out that a central advantage of CNG is that it's here now, available now, convertable now, cheaper than blended fuels, and oh by the way, directly translates to current engine design. Unfortunately, it appears that BO and his Star Trek coven haven't read the right book yet.

Commentary by Rick Carlton

With gasoline point of sale prices averaging $3 per gallon nationally, and with spot oil costs remaining between $88 - $93 per barrel (based on 1/7/2011 Bloomberg energy metrics) the question becomes, at what point do we get serious about alternative fuels?

Granted, there's considerable hoopla about electric power these days, but EVs are not practical solutions for the average consumer. There is no nationally-recognized charging infrastructure on the horizon, nor are EVs logical in terms of cost or utility for the typical buyer. For example, at the top of the electric consumer mountain the Tesla stands alone at an MSRP of $140,000. For that price, you get loads of style and blazing speed, just as long as you only want to go fast for 200 miles. At that point, the Tesla's elegant automobile 'du art turns into a monument to the hubris of technology.

On the other hand, there are other more affordable options, including the Think City, Phoenix Light Truck or Aptera Typ-1, where MSRPs are a bit more reasonable ranging from $27,000 to $45,000, but these vehicles provide their own challenges in the form of even more limited ranges of 100 to 130 miles. Then, once these vehicles are fully discharged, in order to re-energize them it takes an average of 7 hours. So, unless you live in a highly-urban area, where the goal is to go a mile or so and back for a gallon of milk, (averaging $2.65 nationally by the way), you are going to be spending a lot of time plugging in and out. Finally, there is a "gotcha" operating cost in the mix, since regularly charging your EV on the local electric grid, will ultimately come back to haunt the consumer downstream based on higher localized electric utility costs.

However, although it is obvious that there's no such thing as a free lunch, there are more reasonably priced and readily-available solutions to the dual issues of cost and energy security in this country. Perhaps the most important of all of these opportunities, is a national commitment to the development of compressed natural gas (CNG) solutions for consumer cars.

For example, according to Q4 2010 prices, the base cost of a gasoline gallon equivalent (gge) of CNG is $0.85, where the national average of a gallon of refined gasoline is currently $2.97 for 87 Octane. Obviously the cost variance is clear, but additional development cost economies can be easily leveraged by the CNG industry's long-history with the conversion of gasoline to Liquid Natural Gas (LNG), or Liquid Propane Gas (LPG) engines for fleet vehicle use.

Further, the EPA is already embedded within the gas industry, and any cost burdens are already included as part of daily gge averages, so any follow-in regulatory price impacts will be limited to some degree. Finally, there is the fact that the North American continent harbors perhaps the greatest concentration of natural gas in the world, so supply will be plentiful and domestically controlled for the foreseeable future. All in all then, the question comes down to "why haven't we done something about this?"

Frankly, 'tis a puzzlement. However, along with the already-proven cost efficiencies of CNG offered by the fleet vehicle industry, there are several well-known energy evangelists trying to dent the illogic of the "electric-first" auto solution now, including Boone Pickens, although to date CNG's value still needs more marketing/promotion push. Nonetheless, all one really needs to do is to take a long, honest look at the economic burden necessary to develop "whole-cloth" national high-rate electric car production, and perhaps the differences between the hiss of CNG, versus the buzz of electric power will become more obvious.

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