Greening the Transport Sector

May 7, 2008

Ken Silverstein, EnergyBiz Insider
Editor-in-Chief

Green cars come in many varieties. Natural gas is one of them, considered to be a much cleaner and cheaper alternative than conventional oil. In fact, Honda's Civic GX, a natural gas car that cost about $25,000 and is sold only in New York and California, is the "greenest" of them all.

The primary market is large fleets. Such vehicles drive substantial distances and are therefore able to recoup their higher initial costs through reduced fuel charges. They also have access to centrally located fueling and repair stations.

"Increased use of natural gas vehicles will reduce global warming emissions of carbon dioxide, methane and nitrous oxides by 20 percent to 25 percent over present best-available (petroleum engineered) cars and light duty vehicles," says Jeffrey Seisler, executive director of the European Natural Gas Vehicle Association.

But where is the natural gas going to come from, given that power generation can't get enough of it? T. Boone Pickens says that such gas ought to be redirected into vehicles. Generators could then get their juice from other sources including wind and nuclear.

Natural gas at the pump is less costly than gasoline and even the added demands won't drive up prices that much. The transport sector consumes only a fraction of all natural gas. According to the U.S. Department of Energy, the national average for compressed natural gas at the pump is about a third less than gas or diesel.

At present, more than 5 million natural-gas vehicles are operating worldwide with 150,000 being run in the United States. There are more than 1,500 fueling stations to serve those in this country, although only half are for public use and the rest is used to serve private fleets. While Honda is winning the most acclaim for its Civic -- awarded by the American Council for an Energy Efficient Economy -- there are more than 150 models of light, medium and heavy duty vehicles and engines.

Roughly 22 percent of all new transit bus orders are for natural gas. Take the Coachella Valley's SunLine Transit Agency in Palm Springs, which made the switch from diesel to natural gas in the early 1990s: It applied for federal grants that covered 80 percent of the replacement costs. The taxpayers there contributed the remaining 20 percent. That did not include the $500,000 needed to build fueling stations to service the new buses and the money to retrain the agency's existing mechanics, which came from private sources.

"Natural gas vehicles are an immediate solution to the nation's energy security needs," says the National Energy Renewable Lab in Golden, Colo. "Most of the natural gas consumed in the United States is produced domestically and by politically stable countries, and an extensive natural gas infrastructure exists."

Market Pressures

Oil, in this country, now comprises 2 percent of total electric generation. But it still provides 96 percent of the fuel in the transportation sector.

Natural gas is trying to crack those markets. Thousands of delivery trucks and public buses could make the conversion from oil to natural gas. The technology exist now to do so, which is why the federal government provides some financial incentives. Toward that end, Westport Innovations in Vancouver, B.C. is supplying hundreds of new natural gas-enabled engines to the San Diego Metropolitan Transit System.

The Energy Policy Act of 1995, meanwhile, is a mandate that covers federal, state and certain "fuel provider" fleet vehicles. Under that law, "fuel provider fleets," such as those operated by utilities, are required to use alternatively fueled vehicles in 90 percent of their covered vehicles. The European Commission also has enacted a transport policy that aims to replace 20 percent of the petroleum used in its transport sector by 2020. The hope is to have 23 million alternatively fueled vehicles in Europe by that time.

To be sure, political and practical considerations stand in the way. The petroleum industry argues that government has no business telling industry when to shift to a different form of energy. Oil is more abundant than natural gas, it says, noting that it is also easier to transport. The big oil companies emphasize that they could supply the fuel to motor natural gas vehicles, but that the demand is not there.

Oil companies also have a huge financial stake in their existing refineries that transform oil into gasoline. Those refineries will eventually have dual uses. But converting them requires a capital investment. If the demand for alternatively fueled vehicles is sparse, then such investments would be unwise. They add that natural gas vehicles are not only more costly to buy and operate but they are also difficult to refuel and service.

All that could change. High gas prices along with new clean air standards will eventually have an effect. Natural gas vehicles, however, will be just one solution. Hybrids that run on both gasoline and electricity are here now. Plug-in hybrids are coming. Bio-fuels are now used to help power cars and more promising technologies are in the offing. Hydrogen fuel cells for cars, meanwhile, may one day be a reality.

For their part, utilities are using a variety of measures like deploying sedans, vans and pick-ups "capable" of running on natural gas, propane, methanol or E85, a mix of 15 percent gasoline and 85 percent ethanol. If vehicle manufacturers spot an opening, they will deliver. Government, too, must be there to facilitate the growth not just through tax-favored legislation but also to help build the fueling and serving infrastructure.

The greening of the transport sector will take time. Natural gas proponents understand that and say they are in it for the long haul. So are others, which will encourage more participation and force the market for alternatively-fueled vehicles to widen.


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Ken Silverstein
EnergyBiz Insider
Editor-in-Chief

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