Natural Gas Vehicles: Viable Alternative to Oil-Based Car Fuels?

Posted Jun 28th 2010 5:10PM
by Joseph Lazzaro
Filed under: Commodities, Oil

BP Plc.'s (BP) Deepwater Horizen oil spill in the Gulf of Mexico -- the nation's worst spill in the modern era -- may increase interest in alternative transport fuels for cars and trucks. And a leading contender is: natural gas.

Domestic, cleaner, abundant, and (so far) cheaper than oil, natural gas has the potential to displace a significant amount of oil as a transport fuel.

Westport Innovations (WPRT) is one publicly-traded company that sees a bright future for natural gas in the commercial truck sector, among other transport, industrial, and power generation applications.

Utilities who operate electric power generation plants are already turning to natural gas as a cleaner fuel than coal. Likewise with home/commercial heating -- assuming natural gas remains cheap, the energy form will likely see increased use for heating in the decade. Natural gas already is the dominant form for home heat in the Midwest U.S.

But getting the civilian car market to convert to natural gas will be struggle. First, the filling station network would have expand vastly. A central filling station fits the bill for bus fleets or truck fleets, but widespread civilian use of natgas would literally require a natural gas filling station network almost as large as the current gasoline station network. More than likely, what will follow is a gradual increase in natural gas filling stations.

Further, natural gas vehicle designs are being refined to accommodate natural gas' storage requirements. Natural gas, whether compressed or liquefied, must be stored in cylinders, and these were initially placed in the trunk, displacing, to the dismay of drivers, valuable carrying/storage space. New vehicles are placing the tanks under the vehicle frame, which takes advantage of dead space, and leaves the trunk free.

Energy Analysis: The alternative transportation fuel market remains up for grabs. Electric cars, natural gas, and fuel cells are vying for this space, and the winner will likely be the lowest-cost, most-convenient, scalable energy form.