Supporters of natural gas vehicles (NGV) aren't going after the personal vehicle market, at least not initially, but they see a sizeable market share in just replacing diesel fuel in fleet vehicles and the over-the-road diesel market.
An estimated "20-25% of onroad fuel we use is diesel, and that is almost entirely used in fleets," said Richard Kolodziej, president of Natural Gas Vehicles for America (NGVAmerica), a coalition supporting natural gas and hydrogen-fueled vehicles. "It would be a monumental task just to replace all that." He estimated the annual diesel market at 50 billion gallons, or about 20% of the onroad market.
Replacing that would take about 7 Tcf, Kolodziej estimated. His goals are modest, however. Compressed natural gas (CNG) fuel could go from about a 40 Bcf market last year to 1.25 Tcf in the next 10-15 years.
But the field for the diesel market is wide open, he said in response to questions from NGI. "There's a lot of competition in the light duty market, from propane, ethanol, electric. In the diesel market there's no competition."
ExxonMobil CEO Rex Tillerson's disparagement last week of natural gas as a vehicle fuel "is understandable. He doesn't want to see his gasoline and diesel market cannibalized," Kolodziej said (see NGI, March 15).
"They want to use that natural gas in power generation where they're competing primarily against coal, but not in the transportation market where it will cannibalize their gasoline and diesel business. It's as simple as that."
All told the fleet vehicle market is not a small one. It includes urban delivery vehicles of all types, plus buses, taxis, trash trucks and street-sweepers -- that is, anything that returns at night to a central garage where the vehicles are refueled. And in some cases it also includes inter-city trailer trucks.
Kolodziej explained that in much of the long-distance hauling market, the trailer may go coast-to-coast, but the tractor goes from point-to-point and back again, dropping off the trailers, which are picked up by another tractor for the next stage of their journey. "The big trucking fleets have depots all across the country." It is this point-to-point market that NGV supporters will be targeting next. That includes the heavy truck traffic between adjacent points such as Los Angeles and San Francisco, New York City and Boston or Houston and Dallas.
Hubs will grow up, the NGV promoter foresees. There now are more than 100 CNG stations in Los Angeles. Salt Lake City also is becoming a hub. Gradually the routes between hubs will become CNG-friendly.
Kolodziej also saw self-interest in a statement from Dow Chemical CEO Andrew Liveris last week that the United States shouldn't waste natural gas on replacing transportation fuels. "The highest use of natural gas is for transportation. That's what the market says. When gasoline is $24/MMBtu, then natural gas [at] $4/MMBtu or even $8/MMBtu is a bargain. The feedstock people won't pay a competitive price." But the volume of natural gas the transportation industry will use "isn't likely to put Dow Chemical out of business."
NGVAmerica represents more than 100 companies interested in the promotion and use of natural gas and hydrogen as transportation fuels, including engine, vehicle and equipment manufacturers; fleet operators and service providers; natural gas companies; and environmental groups and government organizations.
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