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Compressed Natural Gas as an Alternative Fuel for Vehicles Fleets Makes Sense: Low Cost Creates Untapped Demand that U.S. Suppliers Can Fill Today (3 Parts)

August 12, 2010

Part 3 of a 3 Part Series 

Light-, medium- and heavy-duty vehicles can be converted to natural gas using proven 4th generation technology. Only one factory-ready sedan is sold – the Honda Civic GX – so vehicles have to be retrofitted for CNG fuel. As in any emerging technology, first generation systems needed improvement and not all 3rd party installers were created equal. Early issues facing CNG fleet managers concerned durability, reliability, cold starting and performance. But newer systems have addressed them.

With the market wide open for use of compressed natural gas (CNG) as a fuel for vehicles, the main constraint hampering expansion is the availability of refueling stations due to their high up-front capital cost. CNG stations cost about $400 thousand each for small CNG time-fill stations generating less than 6,000 dge per month and $800 thousand each for mid size, stations generating less than 20,000 dge per month to $1.5 million each for large stations generating up to than 20,000 dge per month and $2.5 million each for high capacity stations generating up to 80,000 dge per month. This impediment can be overcome on the short-term basis by expanding the conversion of vehicles to CNG and cost sharing between local fleet owners. Long-term, expanded use into the public sector, improved reliability of key systems and innovative compressor designs can help to reduce station costs.

The compass points towards a tremendous opportunity for broad market adoption of natural as a vehicular fuel. Today, natural gas can rescue our bleeding budgets and bulging trade deficits. No technological advances are needed, only enlightenment. It just requires what Lee Iacocca pleads for in his latest book, Where Have All the Leaders Gone? — the leadership, courage and common sense to move forward.

 

 

 

 

 

 

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7 Comments leave one →
  1. August 12, 2010 5:25 PM

    Dr. Derek Zupancic • The use of CNG/LPG gases in vehicle is great, there are lots of filling stations around. Conversion costs of existing vehicle is pricey.

    When the HH2 Hydrogen clean air combustion system is installed on CNG vehicles, the mpg goes wayup, the power increases way up too and the emissions literally go to zero. The HH2 Unit is a retrofit product that can be used on any engine or fuel.

    Incidentally, only the HH2 system works on CNG/Propane/LPG engines, other hydrogen systems do not. There is a IRS Tax credit for installing the HH2 systems under rule 535 form 8911/3500/3800 for individuals and businesses, no limit on vehicles, only must be in year installed and is a one time tax credit.

    Website: http://www.HH2.US

    Regards,

    Dr. Derek Zupancic PhD, CEO HydroLectricPower LLC
    21218 Vanowen St, Canoga Park, CA 91303 818-340-4470

  2. August 12, 2010 7:00 PM

    Hi Barry,

    I really appreciate you bringing up the merits of natural gas with respect to transportation. I am still remaining hopeful that nat. gas can make up 1/3 of the U.S. energy portfolio by 2025 in addition to a 25% renewables component. I posted a possible model for attaining this goal:

    A carbon tax or energy tariff equivalent to 3 dollars per barrel (or 7 cents for every gallon) of foreign oil imported from 2010 through 2025 would be able to fund the development of approximately 100-GW of renewable energy capacity by the year 2025 (increasing the U.S. renewable energy portfolio from 7% in 2010 to 25% by 2025). In addition, under this scenario, the transportation and utility sector would shift towards more domestic natural gas and hybrid electric/ electric vehicles over 15 years. Natural gas would constitute 1/3 of the U.S. energy portfolio by 2025 under this model.

    Current Sources of Net Oil Imports:

    Canada (20.1%)
    Saudi Arabia (13.8%)
    Venezuela (10.5%)
    Nigeria (8.8%)
    Mexico (8.7%)

    http://tonto.eia.doe.gov/energy_in_brief/foreign_oil_dependence.cfm

    The current U.S. 2010 energy portfolio by percent:

    Petroleum-37.1
    Natural Gas-23.8
    Coal-22.5
    Nuclear-8.5
    Renewables-7.3
    Other-0.8

    A $3 U.S.dollar carbon tax or energy tariff on every barrel of foreign oil imported between 2010-2025 could feasibly produce the following strategic energy, environment and economic model:

    2025 projected U.S. Energy Portfolio by percent:
    Petroleum-15
    Natural Gas-33
    Coal-18
    Nuclear-9
    Renewables-25

    What are the advantages of this?

    -Energy Security: A reduced reliance on foreign oil imports from approximately 60% in 2010 to 10% by 2025. A 138 % increase in the use of domestic natural gas (from 24% in 2010 to 33% in 2025) and a 357 % increase in the use of domestic renewable energy (from 7 % in 2010 to 25% by 2025) would, in terms of national security, be a much better strategy than importing 60% of our oil. This translates into an average allocation of over 400-billion dollars a year back into the U.S. economy over a 15-yr (projected) time period.

    -Environmental Security: Under this model, a 138 % increase in the use of domestic natural gas and a 357 % increase in the use of domestic renewable energy would be able to comfortably reduce total U.S. CO2 emissions by just over 25% compared to 2010 levels thus assisting towards climate security goals.

    -Economic Growth: Reducing foreign oil imports from approximately 60% in 2010 to 10% by 2025 would put an average of 400-billion dollars a year back into the U.S. economy over the 2010-2025 time period. It is important to keep in mind that U.S. consumer spending drives 2/3 of the U.S. economy. A net displacement and a shift of positions would be expected to occur from both the oil and coal to natural gas industries. An additional 800,000 domestic jobs would be created in the renewable energy field in addition to approximately 100,000 new positions in the hybrid and electric vehicle industries (this only includes direct job figures).

    Sources:

    http://www.eurekalert.org/pub_releases/2010-07/ru-rct070710.php
    http://www.eia.doe.gov/ask/crudeoil_faqs.asp
    http://www.pickensplan.com/act/
    http://www.economywatch.com/energy-economy/natural-gas.html
    http://tonto.eia.doe.gov/energy_in_brief/foreign_oil_dependence.cfm
    http://www.prnewswire.com/news-releases/the-future-of-electric-vehicles-technology-infrastructure-developments-and-the-future-outlook-97928054.html
    http://www.marketresearch.com/product/display.asp?productid=2693442&g=1

  3. August 12, 2010 7:30 PM

    Comment posted in LinkedIn on this discussion.

    LinkedIn Groups
    Group: Compressed Natural Gas (CNG)
    Subject: New comment (2) on “Barry On Energy”
    Barry, this is great stuff! I can relate to your Aug 12th article as we have a few 10 year old CNG vehicles that we have to start on Gasoline and switch over to CNG because of cold start issues. We are just getting started with offering conversions to our customers. We’re working with Altec Eco to train our tech’s.

    Posted by James Hayhurst

  4. August 12, 2010 7:30 PM

    Comment posted in LinkedIn on this discussion.

    From Subject (Thread Messages) Date Size
    LinkedIn Groups
    Group: Compressed Natural Gas (CNG)
    Subject: New comment (1) on “Compressed Natural Gas as an Alternative Fuel for Vehicles Fleets Makes Sense: Low Cost Creates Untapped Demand that U.S. Suppliers Can Fill Today”
    Barry,
    Nice 3 part article on natural gas as a vehicle fuel. Concise, direct and accurate. -Bill

    Posted by William Zobel

  5. August 12, 2010 7:48 PM

    Comment posted in LinkedIn on this discussion.

    LinkedIn Groups
    Group: Compressed Natural Gas (CNG)
    Subject: New comment (1) on “Barry On Energy”
    Barry, The very First lesson in Science I learned was, Energy can not be Destroyed or Created.
    It just metamorphosis in to a new Form.
    All of us are stuck, the Answer is USE less energy.
    Look at CFL, it claims a reduction in consumption of Electricity by 30%.
    To make one it consumes more Energy.
    Who came First, Chicken or Egg?
    I Did.

    Posted by Jitoo Parekh

  6. August 13, 2010 5:52 AM

    Comment posted in LinkedIn on this discussion.

    LinkedIn Groups
    Group: Renewable Fuels Group
    Subject: New comment (1) on “Compressed Natural Gas as an Alternative Fuel for Vehicles Fleets Makes Sense: Low Cost Creates Untapped Demand that U.S. Suppliers Can Fill Today”
    I worked recently for the Malaysian state owned Oil Company , Petronas, and gained some second hand insight into use of CNG for cars. The main problem was the retail distribution and the cost of separate dispensers. They were pressed by the Govt to agree to put facilities into retail stations in KL to service taxis which were heavily subsidised and for the last ten years have consistently lost money on the operation (although their accounting usually shows what they they want is to show) So beware. Remember it is good to be the one at the cutting edge of technology but often you are the one who bleeds !

    Posted by Michael Hession

  7. Rick Heintz permalink
    August 13, 2010 4:43 PM

    Hi Barry- I read some of your 3 part discussion on Natural Gas in Cars. I live in Orange County (Southern CA) and have been interested in the subject for years. We used to have a company called Dual Fuels owned by the Gas Compang that did retrofits and allowed using gas and Natural Gas. Here in Yorba Linda recently there was an article about a family that have 2 Honda’s with Natural Gas and a compressor to refuel their cars overnight. I didn’t see any thing in your discussion about companies that do retrofits and as important, does this have to be done to a new car or can an older (70K miles +) make the change?
    Thanks!
    Rick Heintz

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