Hydrofracking for natural gas extraction has boomed across the nation, driving the cost of gas down and making it an attractive fuel option for anyone craving hydrocarbons to burn. Long being used to heat homes and light up cooking ranges, natural gas is an option to run automobiles as well.
In many developing countries, gas-powered cars are a common sight, with old minibuses and taxis retrofitted with gas tanks. In 2010, a full 61% of Pakistan’s automobile market share was composed of CNG (compressed natural gas) vehicles; other countries that have a high percentage of CNG cars include Armenia, with 32%, and Bolivia, with 20%.
Unfortunately, due to low-quality equipment and lax safety standards, accidents in these countries are common, with Pakistan alone reporting around 2000 deaths due to gas tank ruptures and other incidents.
Implementation in OECD countries and other more advanced economies such as Brazil has been much safer, with millions of vehicles on the road without incident. The United States also has a sizable fleet that runs on variations of gas, with a total of over a quarter million vehicles using either compressed natural gas or liquefied petroleum gas in 2009. These are, however, mostly municipal vehicles such as transit buses; private sector adoption has lagged due to equipment replacement costs and the lack of infrastructure.
Nonetheless, with diesel fuel stable at over $4 a gallon, natural gas is getting a second look. A National Geographic article talks about the establishment of natural gas infrastructure in the U.S. and the attempts by natural gas proponents to solve the “chicken-and-egg” problem – the reluctance of fuel station operators to invest in infrastructure that doesn’t, at the moment, have many vehicles to serve, and the concurrent reluctance of vehicle operators to convert to gas without the ability to refuel freely.
Fuel magnate T. Boone Pickens is spearheading conversion efforts; his company has already built 70 natural gas stations in a number of states, but they are inactive, as the owners wait the deployment of a sizable enough truck fleet to justify opening them.
The Chinese fuel company ENN has also invested in the U.S. Market, partnering with a small Utah company to build up to 50 truck stops in 2013, with more to come.
It remains to be seen how quickly trucking companies will make the switch. The biggest incentive is price – with diesel fuel averaging $4.16 per gallon, and liquefied natural gas rating $2.92 for an equivalent unit, the cost savings are considerable.
Unfortunately, these trucks also cost more at the moment, running between $40,000 and up to $80,000 more than an ordinary diesel truck. This creates an uncertain calculation for truck fleet owners – if diesel stays between $4 and $5 per gallon, it will be economically advantageous to make the switch; however, if prices subside by 30 cents, the gas conversion will be a loss. The U.S. Energy Information Administration estimates that liquefied gas will be around 40 percent cheaper than diesel for at least three decades. However, it’s only an estimate.
Like everyone else in transportation and shipping, we in the auto transport business have felt the squeeze of high fuel costs over the past several years, especially during seasonal auto shipping peaks. For that reason, we are watching the developments in the natural gas market carefully. If the trend takes hold, natural gas stations become more prevalent and the price of gas-powered trucks becomes more competitive with diesel rigs, auto transport companies will join in the conversion to natural gas and pass on the savings to their customers.