The use of natural gas as a transportation fuel is gaining momentum because of the economics, vehicle manufacturing, fueling infrastructure and public policy support, according to NGVAmerica President Richard Kolodziej.
Kolodziej assessed the market for compressed natural gas (CNG) and liquefied natural gas (LNG) vehicles in an online seminar last week that was held by Colorado-based consultant Pike Research. Senior analyst Dave Hurst said recent surveys indicate that more than half of stakeholders have "favorable" impressions of natural gas vehicles (NGV), and a growth rate of 10% annually for fleets is projected over the next few years.
Major challenges cited as holding back the shift of fleet operators to natural gas are disappearing as all of the major vehicle manufacturers are producing a wider range of NGVs, fueling infrastructure is not entirely dependent on a national network of stations offering CNG or LNG, and public policy is supporting the shift to NGVs, said Kolodziej. He gave a nod to a recent announcement by Mack Trucks to offer NGV models for on-highway and construction applications as evidence that a shift is underway to emphasize medium and heavy duty vehicles powered by natural gas.
"By just going after the heavy-duty vehicles we are looking at potentially a quarter of the current overall natural gas demand in the United States," he said. A growing use of shorter-haul, point-to-point fleet applications and greater NGV conversion capability is creating a sizable potential market to convert the 8 million diesel vehicles operating in U.S. fleets. For older, "out-of-useful-life" diesel powered vehicles, NGV conversions are now economically viable.
"They are high-mileage vehicles, but ones with still many more miles of service ahead. We're seeing a huge interest in after-market conversions, and I think this is going to be a huge market for natural gas vehicles."
Kolodziej challenged the common perception that for NGVs to make a big impact in the transportation sector the industry will have to replicate more closely the nation's national network of 150,000 gasoline fueling stations, with about half of those offering diesel. Currently there are about 1,100 natural gas fueling stations.
"We have a long way to go to catch up with gasoline and diesel, so initially this means we can't be all-things-to-all-people, so we're focusing on a number of vehicle types that don't need a national fueling network," said Kolodziej. He note that there are medium- and heavy-duty vehicles that go for short runs and return to the same station each night, and point-to-point fleets that go back and forth between two cities. The point-to-point and return-home types of fleets tend to be clustered in hubs around the nation, and that is where the emphasis on CNG and LNG fueling infrastructure has been focused.
"The next step is to connect those hubs with spokes, which would be major highways, along which there will be natural gas fueling," Kolodziej said. "We're growing the market organically where the market demands are."
NGVs don't need government support to grow, but the sector could grow much faster with it, he said. "We're seeing a lot of support at different levels of government," he said, lauding states in particular, where more than 250 pieces of legislation to support alternative vehicle fuels have been introduced this years.
Separately, five public-access NGV fueling stations were among 15 projects granted a total of $23.1 million in funding last week by the California Energy Commission (CEC) as part of the state's alternative transportation fuels program. Several other projects are to benefit NGVs as part of research and development on all the alternative fuels.
Both CNG and LNG fueling projects received CEC funding, said CEC Commissioner Carla Peterman. The grants are provided as part of the state's Alternative and Renewable Fuel and Vehicle Technology Program, which offers up to $100 million annually.
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