Worldwide sales of natural gas vehicles (NGV) will increase to more than 3.2 million units annually by 2016, a 68% increase compared with 1.9 million units last year, with commercial sales in North America and Western Europe leading the surge, according to a report released by Pike Research. The increased sales will lead to growth in the use of natural gas as a transportation fuel, with 19 billion cubic meters of gas expected to be sold globally by 2016, the researchers said.
The strongest growth rate in NGV sales is expected to come in the United States, where Pike said 32,619 NGV will be sold in 2016. Demand in the United States is greatest in states with the most established NGV infrastructure -- California, New York, Utah and Oklahoma. The researchers expect 1,972 refueling stations to be online in North America by 2016 and nearly 26,000 worldwide, compared with 18,000 last year. But even with that 44% increase worldwide, "the expanding infrastructure will not keep pace with the growth of the vehicle market," Pike said.
Most NGVs sold over the next five years are likely to be compressed natural gas (CNG) vehicles, rather than liquefied natural gas (LNG) vehicles, due to "substantially lower equipment costs" for CNG, according to the report.
"Out of a total of 1,326 natural gas refueling stations in the United States, only 60 or so are LNG. LNG is generally more appropriate for [heavy-duty] trucks as it permits the vehicle to carry more fuel; however, the equipment to keep the gas liquefied is both heavy and expensive," Pike said.
Demand for NGVs in North America is largely relegated to the fleet market due to a lack of convenient refueling stations and limits on factory warranties, Pike said.
"Corporate and government fleets are the strongest adopters of natural gas vehicles," said Pike senior analyst Dave Hurst. "Not only will this trend continue, but in fact fleet sales will increase as a percentage of all NGV sales, representing two-thirds of the total market by 2013. More and more fleet managers are attracted to the lower fuel costs of natural gas, in addition to the opportunity to reduce their vehicles' carbon footprint."
Chesapeake Energy Corp. Aubrey McClendon has said that finding a way to use natural gas as a mainstream transportation fuel is the "holy grail" for the industry (see Daily GPI, Nov. 4, 2010). An economic method to convert gas to liquids, which would allow all types of vehicles to use CNG, could be developed by the middle of the decade, according to McClendon.
Earlier this month a roundtable of the Canadian Natural Gas Vehicle Alliance issued a report that included compelling reasons for embracing a diversified transportation fuel strategy that includes natural gas, and identified significant challenges to deployment of NGV in Canada (see Daily GPI, Jan. 10). In the United States, Natural Gas Vehicles for America last year reached similar conclusions about the viability of natural gas as a fuel for truck and bus fleets (see Daily GPI, May 13, 2010).
Pike recently said 2011 will bring a flood of new electric vehicles (EV) and the widespread arrival of EV charging stations (see Power Market Today, Dec. 29, 2010).
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