Natural gas vehicles show ‘phenomenal growth’ in China

HOUSTON — When it comes to running vehicles on natural gas, China appears more interested than the United States.

In the last five years, China has added 1,500 refueling stations for vehicles running on natural gas, with half of those added in the last year, said Heather Hausladen, senior research analyst for IHS, speaking during the IHS Energy CERAWeek conference in Houston.

The United States, by contrast, added 84 compressed natural gas stations last year, according to IHS.

“In China, we’ve seen particularly phenomenal growth,” Hausladen said.

Roughly 70,000 trucks in China run on natural gas, with 30,000 added last year, she said. About 112,000 total vehicles in the United States are powered by natural gas, and 14.8 million worldwide run on the fuel, according to the U.S. Department of Energy.

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The additions in China have come amid soaring interest in the fuel, even though wholesale natural gas prices are far higher in China than they are in the United States, Hausladen said.

Natural gas in China costs about $12 per million British thermal units, compared with an average of around $4 in the United States over the last year, Hausladen said.

But costs for building refueling stations are far lower than they are in the United States, leaving pump prices around $3 for the equivalent of one gasoline gallon of the fuel, Hausladen said.

That’s not far from the U.S. pump price for compressed natural gas of about $2 per gallon equivalent.

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The price of natural gas at Chinese refueling stations is also far lower than diesel, she said.

“We expect that there will continue to be this favorable price differential,” Hausladen said.

Costs have played a role in making U.S. growth in natural gas vehicles slower.

A long-haul truck using natural gas costs about $50,000 more than their diesel-powered counterparts, said John Wall, vice president and chief technology officer of engine maker Cummins.

Parts for natural gas vehicles have to be specially made and with low sales volumes for those vehicles, their costs are more expensive, Wall said.

“As the volume goes up we’ll be able to bring costs down on a number of the components,” he said.

Even with those higher costs, however, high fuel users can save money by switching to natural gas for their vehicles, a trend that is catching on with companies nationwide, he said.

Natural gas costs far less than diesel, which currently cost an average of $4 per gallon in the United States, according to AAA.

“The price difference of the fuel is pretty compelling,” Wall said.

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