Finance & Investing
News Services
Newsletters
Get free industry updates via email.
Daily News
Weekly News
Equipment Updates
Weekly Job Register
Monthly Event Guide
Our privacy
pledge.


advertisement

Nat Gas vs. Electric Vehicles: Which Will Drive U.S. Passenger Car Market?

change text size
Nat Gas vs. Electric Vehicles: Which Will Drive U.S. Passenger Car Market?

T. Boone Pickens and other energy industry executives have been promoting the increased use of natural gas in the U.S. as a means of developing a market for the abundant U.S. shale gas supply now available, as well as bolstering the U.S. economy and weaning the nation of its dependence on foreign oil.

While initial efforts have been focused on the heavy-duty vehicle market, increasing the number of light-duty passenger cars that run on compressed natural gas (CNG) is viewed as the next step towards achieving these goals.

In early March, Chesapeake Energy and GE unveiled plans to jointly develop infrastructure to promote the use of natural gas as a transportation fuel, including CNG and liquefied natural gas transportation and gas home-fueling solutions.

An estimated 112,000 natural gas vehicles are on U.S. roads today and over 13 million are being driven worldwide, according to the Natural Gas Vehicles for America (NGVA) trade association website. However, an estimated half a million light-duty, CNG powered passenger vehicles could be on U.S. roads by 2020, said NGVA President Richard Kolodziej.

Kolodziej commented that he is not surprised that the more aggressive natural gas producers are promoting use of natural gas in power generation and transportation.

"The petrochemical industry wants gas to stay below $2/Mcf forever, not realizing the correlation between higher prices and more supply," said Kolodziej, adding that little profit can be made in the residential and commercial market, and the industrial market is tied to the economy.

Gas-Powered Vehicles

With gasoline prices approaching $4/gallon and the U.S. government's ongoing efforts to reduce greenhouse gas emissions from vehicles driving on U.S. roads, the question of whether the use of alternative fuel vehicles will grow seems a logical one. Whether CNG vehicles will capture a significant market share of the U.S. passenger vehicle market, and how these vehicles will compete against electric vehicles (EVs), remains to be seen.

Natural gas could come from behind and overtake market share from EVs if original equipment manufacturers and the U.S. Department of Energy (DOE) promote CNG vehicles and if the public can have more access to natural gas filling stations, said Larry Rinek, senior technology consultant with Frost & Sullivan's technical insights division.

Advocates of CNG vehicles point to the lower exhaust emissions from CNG versus gasoline-powered cars. However, CNG vehicles are not a panacea that will save everybody from dependence on foreign fuels, said Rinek.

Drawbacks to CNG vehicles include the availability of fueling stations. The natural gas filling stations that are available in the U.S. tend to be concentrated in areas where commercial fleets of CNG vehicles exist; buses and trucks are the biggest market for CNG today.

Additionally, CNG cars also have less power than gasoline-fueled cars, said Rinek, who road tested a 2012 Honda Civic CNG vehicle earlier this year and was underwhelmed by its performance. After-market enhancements to boost power on CNG cars are costly, and a fact with which most drivers will have to learn to live.

"These are not performance vehicles," commented Rinek. "These cars are for Joe and Jane Consumer who are going to the market and not going very fast."

CNG tanks eat up most of the trunk space in cars, creating a nuisance for drivers, Rinek noted.

Availability of cars is another issue. At present, the Honda Civic natural gas vehicle is the only light-duty natural gas vehicle available from an original U.S. equipment manufacturer. The available of CNG cars does appear to be changing.

In early March, Chrysler said it would begin selling a Ram 2500 Heavy Duty pickup that runs on CNG, the Associated Press reported. General Motors will also begin selling versions of its Chevrolet Silverado and GMC Sierra 25500 HD that run on natural gas.

Last fall, Honda announced it would rapidly ramp up output of the 2012 Honda Civic Natural Gas car to meet anticipated demand for the vehicle.

Natural gas cars cost more than gasoline or diesel powered cars, according to NGVA, but a number of federal and state tax credits are available for the purchase of a CNG vehicle.

Kolodziej believes that consumer interest in purchasing a CNG vehicle or converting an existing vehicle for CNG use will grow as the availability of natural gas fueling stations do. The cost of these cars mean that people who purchase them will most-likely already own a vehicle or two, he added.

"The focus of developing a market for natural gas powered cars has not been to intentionally ignore the consumer market, but to focus initially on return to home vehicles, such as buses or trucks that move across the country," Kolodziej commented, saying that he believes that electric cars will be a niche application and that hydrogen-fueled vehicles are "great in theory" but face the challenge of high manufacturing costs.

Electric-Powered Vehicles

Cars with electric-powered motors have been around for over a century, but the internal combustion engine and mass production of gasoline-fueled vehicles put electric-powered cars on the backburner. Currently, EVs are the darlings of environmental activities--with federal and state tax incentives, a number of electric cars available for purchase and the number of charging stations growing through public and private investment, Rinek commented.

However, the limited driving range of electric powered cars – with drivers lucky to get 100 miles between stops at charging stations -- has been a deterrent to their widespread adoption in the U.S. market. As a result, EVs ended up being relegated to a second or third urban vehicle used for short trips, Rinek commented.

The limited range of electric vehicles and the lengthy time required to recharge an electric car's batteries are two big Achilles heels for EV vehicles, said Michael Gorton, an engineer, physicist, lawyer and power systems engineer who writes and speaks on topics related to energy, alternative vehicles and solar power finance.

"If you're driving from Houston to Dallas and have to stop for eight hours to recharge you're car, it's not so fun [to drive an electric vehicle]." Using solar cells to recharge an EV also is not the way to go right now, with further advances in solar technology needed before solar cells become a more feasible option for EVs.

To avoid high costs, EV drivers must be conscious of where they can charge their cars and what time of day they can do so. Otherwise, they may find themselves stranded without an electric outlet and end up being "charged through the nose" by utilities to recharge their vehicles.

"Utilities have mixed feelings about EVs," said Rinek. "They are promoting the use of and operate large EV fleets, but they would prefer drivers of EVs only charge at night when surplus capacity is available," as the charging draws significant power grid.

The cost of EV vehicles compared to gasoline-fueled vehicles is a drawback to purchasing an EV, mostly due to the lithium ion battery packs within the cars. To compensate for the weight of the battery, the EVs currently being manufactured are mostly smaller cars.

"If the cost, weight and issue of charging time can be addressed, the cost of EVs will be brought down dramatically," said Gorton.

There's a good chance of a breakthrough in battery technology that will allow for a wide use of EVs, but Gorton said he doesn't see significant breakthroughs in CNG motors on the horizon.

First U.S. Coast to Coast EV Fueling Station Planned

Bruce Brimacombe, founder and CEO of Arizona-based GoE3, an economic change engine involved in deploying the first coast-to-coast EV infrastructure project in the U.S., noted that CNG can play a role in the EV market as a fueling source for recharging EV batteries outside the main power grid.

GoE3 on April 21 will launch the new infrastructure project at Biosphere 2 in Tucscon, Ariz. These charging stations will be Level Two, 70 Amp or higher to support all modern EVs and make interstate travel for EVs and plug-in EVs.

Over the next three years, charging stations will be installed along the major interstate highways 1-40, 1-10, 1-20 and 1-70, with stations located every 50 to 75 miles. This infrastructure system, which will be constructed through private funding, will allow drivers to travel in EVs from New York to Los Angeles.

The stations will feature fast chargers that can recharge an EV battery anywhere between 15 and 45 minutes. "We're trying to support all the [EV] cars to the best of their ability," said Brimacombe. "We're not trying to take a side in the fight."

The system is being constructed in anticipation of the number of EVs that manufacturers will be bringing on the U.S. market, Brimacombe noted, citing a 2010 study by Baum and Associates that an estimated 32 models of EVs are expected to be available by 2015, with over 2 million EVs expected to be on U.S. roads in that year.

Both CNG and electric powered vehicles will be equally compatible in the U.S. auto market in the next 20 to 30 years, said Keith Woods, director of the board for the Salt River Project, which services 960,000 utility customers in Phoenix, Ariz.

"Much like the utility industry, it's best to have a diverse portfolio of fuels to have some price certainty and security, like having a mutual fund instead of buying a stock," Woods commented.



Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

WHAT DO YOU THINK?

Post a Comment Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Colin Fairey | Jun. 3, 2013
I am an electrical engineer very interested in the EV concept. I am sure this has been done, but I havent seen a comprehensive study which shows the potential maximum demand on the electric grid systems throughout the US as EVs become more and more prevalent. This could be done on a graduated scale from the current EV population up to a projected future maximum usage. Converting the publicized volumes of petroleum based fuels currently being used in automobiles in the US into the equivalent electrical power required to produce the same amount of energy is relatively simple in basic theory. The efficiency of converting petroleum based fuels into horse power generated on a daily or annual basis in internal combustion vehicles is known, but I havent seen any accurate data which shows the overall efficiency of converting fuel oil and natural gas from the power generation to the final horse power outputs of the EVs. It would be interesting to find out if the existing power grids will reach a point where they are unable to distribute the required power levels to maintain the EV fleet, and if so, is there a projection on the upgrading of these systems to meet the demand. I would really like to correspond with anyone who has more in depth knowledge or ideas on this very interesting subject. Thanks!!

Philippe | Apr. 10, 2012
Renault and Nissan are developing a passager car, which uses batteries. The twist is that you buy the car and lease the batteries. Rather than charging the batteries, you change the batteries. You drive to a changing station. The swapping of the dead for a fully charge battery takes no longer then a fill up. The price is, according published news report, the same price as a fill up. You still would be able to charge overnight at home or in motel parking lots with overnight charging plugs. An independent company is to start testing this concept in Israel this summer. This EV swapping batteries appears to be the more efficient way to deal with the EV charging.

Virgilio | Apr. 10, 2012
This a great one of having running EVs and Gas Power Cars. Pollution will be minimized from diesel & gas cars.

JBeigh | Apr. 10, 2012
All of the above a plausible notion?! One of the biggest missing items in this debate is the deeper thinking or honest discussion Americans do not seem to be having with themselves and each other. Reframe it as transportation requirements, and accepting and embracing, not condemning or denegrating viable appropriate technology to deliver the demanded service. Walking, riding a bike, taking a bus, train, or plane, or driving ones own vehicle. Until the price gets high enough, most Americans will opt out of walking or biking regardless if it is a viable option. Most americans take less than 300 steps a day. Take a count and try it! Many many trips taken by americans tally up to less than a 40 mile total each day... a golf cart or bike would work just fine. Yet we escew and look down our noses at vehicles tha only have a range of 100 miles Pogo had it right... the mirror , the enemy ... that answer is right there. We need a whack on the side of the haid to shift our paradigms

allen | Apr. 9, 2012
Tell me Mr Wood what kind of trade-in for a used EV.? Do you have to replace a Five-year BATTERY before the trade-in, Where is the Car Fax, has the battery been replaced?? No one has come up with a workable trade-in system. How about running a test at a few Major Airport Rentals, Schuttle Services in EV -SUVs?. After ten years we could have a pretty good test. Have to run Summer and Winter Battery Test as batteries have different outputs is seasons. KEEP THE GOV out of this only Private Test Allowed.Just cant Trust those lying Bast---..

Patrick Smyth | Apr. 9, 2012
Great article. Funny how the pundits dont look at battery-powered vehicles contributing to greenhouse gas emissions when an electric vehicle that is charged with energy from an unclean source, like coal or oil, may produce more pollution than an internal combustion engine vehicle.

RunningBear | Apr. 9, 2012
“An estimated 112,000 natural gas vehicles are on U.S. roads today and over 13 million are being driven worldwide” and that compares to how many EVs? So, CNG is way ahead of EV and moving forward to increase the "Gap". Ford stopped publicly selling the F-150/ bi-fuel CNG in 2004 (commercial vehicle fleets are still available), only eight years ago and has retained the engineering to resume production. With the plentiful supply of natural gas, the public will demand bi-fuel CNG vehicles to offset the ever increasing cost of gasoline. This will reduce our dependence on foreign imports for fuel and cause an upset in our political system with this loss of "leverage" by our international politicians, "Oops!".



More from this Author
Karen Boman
Senior Editor | Rigzone.com
 -  Unconventional Oil, Gas to Lift US Ene... (Sep 16)
 -  Challenges of the Internet of Things (Sep 5)
 -  Video A Growing Part of Internet of Th... (Sep 4)
 -  Internet of Things Can Increase Effect... (Sep 3)
 -  Oil, Gas Companies Laying Groundwork f... (Sep 2)
Most Popular Articles
From the Career Center
Jobs that may interest you
Senior Estimator
Expertise: Budget / Cost Control, Cost Engineer, Project Management
Location: Claremont, CA
 
Engineering Manager
Expertise: Budget / Cost Control, Engineering Manager, Project Controls
Location: Knoxville, TN
 
Financial Analysts
Expertise: Accounting or Finance
Location: TX
 
search for more jobs