A vast abundance of American natural gas resources, now accessible thanks to “fracking”, affords a tantalizingly large and economically-competitive new automotive fuel opportunity. While not perfect, which almost nothing ever is, its utilization, both for heavy-duty transport and for family vehicles, can potentially afford real economies.

Right now, the largest impediment is a “chicken v. egg” conundrum. Market demand for the vehicles will hinge upon creating a satisfactory refueling infrastructure, which, in turn, must be justified by market demand. Can such development occur incrementally in the marketplace of free enterprise? If it truly makes practical sense, I believe it can…and should.

First, let’s take a closer look at the present situation.

There are two natural gas fuel options: compressed natural gas (CNG) for light vehicles which is stored at high pressure (usually at 3,000 to 36,000 psi); and liquefied natural gas (LNG) for heavy trucks which is cooled to greatly reduce storage volume. Right now, Honda is the only automaker to offer a CNG model in the U.S. with its specially-adapted Civic, although Toyota has announced plans to offer a Camry CNG hybrid, and GM will soon be offering a bi-fuel CNG option for their Silverado and Sierra HD trucks at $11,000 premiums. Although CNG vehicles have been around since the late 1970’s, this is the first time GM has offered the option since 2004.

Most of the CNG attention has been focused upon short range fleet applications, including utility trucks, meter reader vehicles and taxis… applications where vehicles travel several miles each day but return to a centralized home refueling base at night. According to Natural Gas Vehicles for America, about 40 percent of trash trucks sold in the U.S. last year were natural-gas-powered. Lower fuel costs relative to petroleum and active use to maximize savings can afford rapid payback of higher up-front costs.

The next logical evolutionary development is to initiate an expanding cryogenically-cooled LNG refueling infrastructure for long-haul heavy trucks. A positive step towards this objective is an agreement between Encana Natural Gas Inc. and California-based Heckmann Water Resources (HWR). HWR will supply water hauling services to Encana, a big Haynesville Shale player, in exchange for their creation of an LNG refueling station network for HWR trucks. HWR has recently ordered 200 long-haul vehicles from the Peterbuilt Motors Corp. of Denton Texas. They will be powered by LNG and CNG-adapted engines supplied by Westport Innovations Inc. of Vancouver, B.C.

Conversion from diesel to LNG will make HWR the operator of North America’s largest LNG fleet. Encana Corp. Executive Vice President and USA Division Senior Vice President Eric Marsh characterized the arrangement as “…a major step towards encouraging many companies servicing the energy industry to convert vehicles to run on affordable, environmentally-responsible LNG or compressed natural gas (CNG).”

Encana initially dispensed LNG to HWR’s truck fleet using mobile stations, and has now established a permanent facility which is also open to the public at Frierson, Louisiana, about 15 miles south of Shreveport. The station is adjacent to a conventional truck stop, and another company is building a CNG station next door. Encana has also constructed four CNG stations; one each in Wyoming and Colorado, and two in Western Canada.

Clean Energy Fuels, a company co-founded by T. Boone Pickens, aims to create a network of 150 LNG stations at Flying J truck stops across the U.S. by the end of next year. The plan is to enable long-haul truckers to reach every major city on natural gas alone. Natural gas producer Chesapeake Energy has invested $150 million in the project. Clean Energy is also pursuing car-friendly CNG-dispensing services, and has signed an agreement with Virginia Governor Robert McDonnell to provide market access to all state and local government bodies.

Presently, natural gas used as transportation fuel constitutes only about 0.1 % of total U.S. consumption. Nearly half of that amount is consumed in California alone. A majority of states use less than 2 million cubic feet per month, and 11 states don’t use any. California received $5.5 million from the Department of Energy (actually, from U.S. taxpayers) to support a UPS truck demonstration program. Of that money, $4 million went to pay extra costs of the trucks, and $1.5 million went to Clean Energy of Seal Beach, California for a refueling station.

Do natural gas vehicles make economic sense? Well, under certain circumstances they can. So long as natural gas prices remain low compared with petroleum and diesel, the cost savings on fuel can offset, and sometimes even outweigh, the added price premiums required for the special CNG and LNG-adapted vehicles.

For example, using a federal government estimate, let’s assume that a typical American family puts 12,000 miles on a car. At 25 miles per gallon, they will consume 480 gallons/year, resulting in a cost of about $1,920 at $4 a gallon. Natural gas at an equivalent price of about $2.50/gallon would save the family $720 a year. However, if that savings comes at the cost of a $10,000 vehicle purchase price premium (not accounting for generous taxpayer incentive contributions), then it’s not exactly a great bargain just yet.

The same general consideration applies to high upfront costs of heavy LNG trucks, currently amounting to about $90,000 more than traditional diesel-powered versions. As with CNG cars, this is in part because they aren’t as yet being mass-produced. On the other hand, those trucks log lots more miles than cars, and the accumulated fuel savings can provide enormous business benefits over the long haul.

Also consider that fuel tanks used for natural gas vehicles are significantly larger and heavier than for petroleum and diesel types, presenting a give-and-take relationship between how much fuel is carried vs. how far they can travel. CNG tanks for cars and light trucks require about 6 times more space than for diesel, and a typical semitrailer truck must carry 1.7 gallons of LNG for an energy equivalent of one gallon of diesel. They are also heavier, causing problems for companies whose payloads are already approaching the legal highway limit.

Again on the plus side, natural gas burns cleaner than petroleum or diesel fuel, offering two important advantages. First, this can considerably extend vehicle life and reduce maintenance costs, offering a major long-term profitability incentive for trucking operators to accept large upfront LNG vehicle premiums. Also, the cleaner burning fuel reduces combustion byproducts over petroleum and diesel, cutting carbon monoxide emissions by an estimated 90%-97%, and nitrogen dioxide emissions by 35%-60%. And yes, it also reduces carbon dioxide emissions by an estimated 25%-30%…if you happen to buy into the climate crisis hype, and tend to worry that this really matters.

So, in the final analysis, what is the future for natural gas vehicles? I certainly wouldn’t bet against them, nor do I advocate spending more taxpayer treasure to make that evolution occur. It appears evident that our nation’s abundant supply of natural gas in combination with practical advantages afforded most particularly for LNG long-haul trucking applications will continue to become more and more attractive over time, expanding the infrastructure and driving down vehicle production costs through economies of scale. The free enterprise marketplace will attract investment, and strong risk-willing competitors will be rewarded, at least so long as government isn’t allowed to insert crony favorites.

As for prospective CNG light-vehicle markets, I wouldn’t count them out either, and for many of the same reasons. As LNG dispensing infrastructures grow, they can be expected to bring CNG more prominently into the automotive marketplace as well to serve denser urban and suburban driver network needs. Convenient refueling accessibility, along with vehicle lifecycle economy and choice, are prerequisite for success. Also, according to car research firm Edmunds.com, drivers of CNG, hybrids, electrics, and other alternative-style vehicles often don’t repeat the purchase, in part, because there are few move-up choices. Just as with LNG, that time for CNG may come sooner than we might imagine.