Commentary: 10 points to consider in the great natural gas vehicle debate

The perception of natural gas as a mainstream fuel for vehicles runs the gamut, dependent upon where you live: from the improbable…to the viable…to the everyday reality. So from recent burrito research expeditions, here are ten points to stir up the melding pot of the great natural gas vehicle debate.

1) Here is a breakdown of the total number of natural gas vehicles globally. The key takeaways: there are A LOT of natural gas vehicles already in the world (15 millionish in 2011) and the number is rapidly increasing. However, there are relatively few in North America (aka, the tiny sliver at the bottom of the chart).

2) In a recent IEA report, natural gas use in road transport accounted for 1.4% of global gas demand in 2012. This is projected to rise to 2.5% by 2018, accounting for nearly 10% of total natural gas demand growth.

3) The number of natural gas vehicles (NGVs) in the world could reach 65 million by 2020, according to the International Association of Natural Gas Vehicles (IANGV), which indicates an annual growth rate of 19%. Another study by Navigant Consulting puts this number at a much more modest (but still impressive) 35 million.

4) China is leading the charge in both total natural gas demand growth (accounting for 30% of global growth over the next five years) and natural gas demand growth for transportation, with consumption from the sector set to triple by 2018.

5) China already has 1.5 million natural gas vehicles on the road, and if its ambitious targets are achieved, it will be substituting 840,000 barrels of oil by 2030. That said, for this to occur it would need to see a tenfold increase in consumption from the vehicle sector.

6) The current leaders in terms of natural gas vehicles are Iran (2.86 million), Pakistan (2.85 million), Argentina (1.9 million), and Brazil (1.7 million). These four account for 60% of the total global count.

7) The number of natural gas vehicles in the US is now estimated at 250,000. According to the EIA, April’s natural gas vehicle fuel consumption was 2.7 Bcf for the entire month. This equates to 0.1% of total US consumption.

8) The US is seeing the most growth coming through from transit vehicles, with one in five now running on natural gas (although according to Twitter it is now one in three). There has been a flurry of companies such as Frito-Lay and Proctor & Gamble announcing recently that they are converting parts of their fleets to run on natural gas.

9) But just as studies on LNG exports have indicated that natural gas prices will be relatively unaffected, natural gas prices are projected to see a limited impact by rising demand from the transportation sector. All the while, by 2035 we should still see 99% of US vehicles powered by fossil fuels.

10) Finally, given the optimistic numbers presented above (well, I’m more bullish on NGVs than when I started this piece!), it seems prudent to highlight the harshest reality faced, at least by the US: that of infrastructure. According to the IEA, it can cost from $400,000 to $1.7 million to build a compressed-natural-gas filling station, and up to $4 million for a liquefied-natural-gas station. By comparison, a gasoline station costs from $50,000 to $150,000.

‘Til next time…thanks for playing!