More natural gas vehicles hitting the market


DETROIT — More natural gas-powered vehicles will hit the market soon, as rising gasoline prices, booming natural gas production and proposed tax credits make them a more attractive option. But they’re a long way from being a common sight in U.S. driveways.

Chrysler will sell a Ram 2500 Heavy Duty pickup that runs on compressed natural gas starting in July. The truck has both a gasoline tank and a natural gas storage tank, and its engine shifts seamlessly between the two power sources. The truck can run for 255 miles on natural gas and another 367 miles using gasoline.

Chrysler will have competition. Late this year, General Motors Co. will sell natural-gas versions of two pickups — the Chevrolet Silverado and GMC Sierra 2500 HD. The GM trucks will run on gasoline and natural gas for 650 miles. Ford Motor Co. has offered natural-gas ready pickups and vans since 2009.

Natural gas is appealing for a lot of reasons. It comes from domestic sources, for those concerned about importing oil. It produces 30 percent fewer greenhouse gas emissions than traditional gasoline or diesel. And it costs less than gasoline. Natural gas prices have dropped 18 percent so far this year, while regular gas prices are up 13 percent.

But U.S. buyers have been slow to adopt natural-gas vehicles, which make up less than one-tenth of 1 percent of the vehicles on American roads. Even the newest trucks aren’t intended for average buyers. They’re work trucks, capable of plowing snow and towing three tons or more. Chrysler will only sell its natural-gas Ram to fleet customers like local governments, utilities and construction companies. GM anticipates that 90 percent of its sales will be to fleets.

Here are some reasons that U.S. buyers have been slow to adopt natural-gas vehicles:

— Lack of fueling stations. There are around 1,000 natural-gas fueling stations in the U.S., but only half of them are open to the public. Most are operated by local governments or private companies to refuel buses and other fleet vehicles. California-based Clean Energy Fuels Corp., a natural gas provider backed by oil tycoon T. Boone Pickens, is planning a big expansion. It aims to install natural-gas pumps at 150 truck stops nationwide over the next few years. But that pales in comparison to the availability of gasoline, which is sold at 117,000 stations in the U.S. That’s why natural gas is still primarily relegated to fleets, which can return to a central refueling station.

— Few choices. There is only one factory-built, natural-gas car sold in the U.S. It’s the natural-gas version of the Honda Civic. Around 13,000 have been sold since the car first went on sale in 1998, mostly to fleets. But Honda’s making a bigger push to sell them to individual buyers. Last year, the company expanded the number of dealers selling natural-gas Civics to nearly 200 in 36 states, up 50 percent from 2010. The company expects to build nearly 4,000 natural-gas Civics in 2012, double the number it initially planned thanks to strong buyer interest. But regular, gas-powered Civics remain the overwhelming favorite. Honda sold 27,000 gasoline-powered Civics in February alone.

— Cost. Additional fuel tanks and parts, and small-scale production make natural gas vehicles more expensive. The CNG Ram, for example, starts at $47,500, almost $20,000 more than a base Ram 2500. The natural-gas Civic starts at $26,155, or $10,000 more than a base four-door Civic. GM won’t announce the price of its natural-gas trucks until next month, but expect a premium.

It can also cost up to $18,000 to convert a gasoline vehicle to a natural gas one, according to Natural Gas Vehicles for America, a lobbying group.

Mary Barcella, director of North American Natural Gas research at consulting firm IHS CERA, said the economic benefits aren’t compelling enough for most drivers. With gasoline prices of about $4 per gallon, it would take five years or more to recoup the extra cost of a natural gas vehicle. She thinks natural gas vehicles will only become more popular if pump prices rise and stay high for a long time.

It’s the same story with hybrid cars, which have been on the market for more than a decade but have a price premium that is difficult to recoup, especially if gas prices are low. Hybrids only make up around 3 percent of the U.S. market.

The price for a natural gas vehicle could go down significantly if Congress approves a tax credit proposed in the Obama administration’s 2013 budget. The administration has proposed replacing the current $7,500 electric vehicle tax credit with an advanced technology vehicle credit of up to $10,000. The credits would go to manufacturers in an effort to encourage lower prices and spur demand.

Categories: Natural gas
Associated Press

15 Responses

  1. Bob Baldwin says:

    The price of conversion to NG is artificially high in the U.S. because of the EPA and because we use more expensive carbon fiber tanks. Steel tanks cost 1/3 but weigh 3 times as much but not so much that we can’t use them. I was in Argentina last year (where they have converted 2 million vehicles) and visited a CNG conversion shop where a 2 man crew would convert a vehicle in 4 hours for $1200. They use smaller 4-5 gallon steel tanks that cost $500 and the conversion kits are around $600. Peru just came out with a report that the average cost of conversions have dropped from $1400 to $1200. If you look at Pakistan (where they have converted 3 million vehicles) auto sales websites, you find out that brand new cars come in both CNG and gasoline versions for only $400 difference.

    We are working to get a new bill passed in Texas called the Texas Natural Gas Act of 2013 that will give permission to all Texans to convert their vehicles to NG without requiring EPA certifications. This will open up our markets to CNG systems that have been used all around the world for much less. Utah did this 2 years and the cost of converting to NG is half what it cost here in Texas. Watch for this being talked about soon.

  2. Jackalope says:

    “With gasoline prices of about $4 per gallon, it would take five years or more to recoup the extra cost of a natural gas vehicle. It’s the same story with hybrid cars, which have been on the market for more than a decade but have a price premium that is difficult to recoup,”

    CNG and electric vehicles are not new. Electrics were actually around with the very first autos. There’s more than one reason why gasoline is the preferred fuel and has been for over 100 years: horsepower, non-corrosive, easy and inexpensive to produce, transportable, range, weight, cost of components, etc. You simply get the most “bang for your buck”.

  3. Trail_Tramp says:

    Once again, the free market economy comes up with real solutions, while the political favorite of the Utopian Obamanites, the Chevy Volt, suspends production.

  4. easy says:

    In 2008, when the President took over…this (using CNG in our vehicles) SHOULD have been the focus….but, alas, it was OBAMACARE that took front and center.

    So we are where we are….

  5. Scott says:

    So….. since most of us have natural gas piped into our houses already, can’t a refueling system be built on that infrastructure?

  6. independent66 says:

    you must have to be a politician to understand the pricing. No wonder we are losing the car market to Japan, Korea and soon India. What a bunch of crooks. All politicians stink.

  7. Peter says:

    As I pointed out in a recent post, I’ve been very interested in CNG vehicles. This issue for me is the sticker price along with the cost of the natural gas compressor unit for my house. Last I checked, the compressor made by Honda was $3500.

  8. wolfie says:

    Unless they get way more fueling stations…. Natural gas cars are never gonna get widespread.

    The ‘Phil’ unit Honda is selling in California only is a great idea and needs to be expanded nationwide… People could just fill up their Natural Gas cars at night from their home gas lines.

  9. JB says:

    That is great until there aren’t enough stations to fuel/power up.

  10. mcfiesty says:

    natural gas cars are the wave of the future. There is a lot more methane out there than there is oil. i’m guessing it will be mainstream in 20 years or so.

  11. oldcheme says:

    Not to mention you lose your trunk to a 3,600 psi CNG tank.
    Might work for a high miles driven delivery driver with access to fleet refueling; but if you buy one, you can’t take a trip because you can’t store your luggage or refuel.

  12. luckyone says:

    That makes more sense. The big problem is the Obama Regime hates gas so we have to rid ourselves of Obama and his regime so we can have progress.

  13. Freedom says:

    The EPA makes it very difficult to convert cars/trucks to natural gas.

    Even though the conversions produce cleaner emissions, the EPA layers on cost and regulations making it prohibitive for those companies that want to convert cars.

    Classic example of how government gets in the way of entrepreneurs doing something tremendously beneficial.

  14. henry says:

    Americans can’t adopt natural gas cars because there is nowhere to fill them up. Maybe you can map out your refill stations in urban Houston, but you need a regular gas engine to go anywhere else. Not to mention the additional cost doesn’t make financial sense. There’s simply no benefit to owning one over an unleaded (or diesel). None of the photos the gallery are CNG anyway.

  15. Alex says:

    What about cars? Can you get me a CNG Camry instead of a hybrid? Just take some space away from the trunk. Come on, Man!