Natural gas sub for vehicles will likely stay a dream for now

Alejander Ruiz, of AT&T, fills up his vehicle with Clean Energy Fuel at 7721 Washington in Houston. (Thomas B. Shea/Houston Chronicle)

Natural gas may be all the rage in the energy industry, but not when it comes to your car.

Vast supplies of domestic natural gas, unlocked by advances in drilling technology, have pushed down prices for the resource to their lowest levels in 10 years, providing a boost to those who argue for its use as a substitute for gasoline in consumer vehicles.

Meantime, gasoline prices are on the rise, reaching a national average Wednesday of $3.86 for a gallon of regular and $3.80 in Houston, according to AAA.

Natural Gas Vehicles for America estimates drivers could save more than the equivalent of $1.50 a gallon by switching to compressed natural gas for their commuter fuel, a change that requires a new car or a vehicle conversion.

But when it comes to making natural gas an attractive option for consumers, two key challenges remain: A dearth of cars and of refueling stations.

The effort to change that has been slow, the result of a “classic chicken and egg problem” between those who sell natural gas and companies that could produce cars to run on it, said Tiffany Groode, director of the automotive scenarios service for IHS Cambridge Energy Research Associates.

“If there are no cars, then why would there be refueling stations?” Groode said. “And if there are no refueling stations, then why would there be cars?”

There are about 1,000 natural gas refueling stations nationwide, including three in Houston, according to government figures. Half of those, however, are not available to the public, but used, for example, to fuel a company or government agency’s fleet.

Just one choice

Only one natural gas-powered vehicle targeting consumers is available in the United States, according to Natural Gas Vehicles for America: the Honda Civic Natural Gas, which starts at about $26,000, $5,500 more than the Civic EX sedan.

GM and Chrysler this month announced plans to sell a limited number of bi-fuel trucks that run on both natural gas and gasoline, but they are aimed at commercial fleets.

Just 90,000 of the nation’s 223 million cars and trucks run on compressed natural gas, according to the U.S. Energy Information Agency.

By 2035, compressed natural gas-powered cars and trucks are expected to account for 180,000 of the 274 million U.S. vehicles, according to the agency’s projections.

Bi-fuel vehicles that use compressed natural gas are projected to add 300,000 vehicles to that total.

Still, IHS CERA projects that no more than 3 percent of America’s vehicles will run on natural gas in the foreseeable future, despite the nation’s enormous supply. Other options, like electric vehicles and increasingly efficient hybrid cars, will give consumers rival choices for alternative fuel vehicles that could be more attractive because of the potential infrastructure limitations of natural gas, Groode said.

A compressed natural gas refueling station can cost $500,000 to $750,000 to install, while an electric car fast-recharging station costs about $70,000 for a two-plug unit, she said.

Chesapeake Energy Corp. is among the nation’s natural gas producers most aggressively attempting to improve infrastructure and make the fuel more attractive to consumers. The Oklahoma City-based company believes that, while gas will be a key resource for electricity and chemical manufacturing in the future, it’s also possible to boost consumer demand for natural gas in vehicles.

“You want to prove it to Detroit … that there’s a viable consumer market,” said Norman Herrera, Chesapeake’s director of market development. The way to start, he said, is to set up an infrastructure for fleets.

The company has succeeded in promoting CNG use within Oklahoma City, which now has 20 compressed natural gas refueling stations within the metropolitan area, Herrera said.

A tough sell

Chesapeake and other energy companies are trying to persuade more commercial fleets to run on natural gas, while building more natural gas stations in cities where those fleets exist.

Increasing the number of fueling stations can make natural gas a more acceptable option for private motorists, said Bruce Russell, spokesman for Clean Energy Fuel Corp., which owns the three natural gas refueling stations in Houston.

“What will pull it over time is the mixed demand, I would think, from fleet usage and consumer usage,” he said.

Still, even the biggest advocates of natural gas admit that it may be a long time before it can be an option for most Americans as a primary transportation fuel.