Tuesday, November 30, 2010

Third World CNG

I read an interesting article on CNG in one of those Wall Street Journal special sections on energy yesterday (no subscription required). The point of the article is that there has been relatively wide adoption of compressed natural gas vehicles in some second and third world countries, all for different reasons.  At the end of 2009, there were about 11.4 million CNG vehicles, and 73% of them were in Pakistan, Argentina, Iran, Brazil and India.

The most interesting member of the list is Iran, where 15% of the country's 11 million vehicles are natural gas fueled.  Reasons here are two-fold: 1) while the country has lots of oil, it has limited gasoline refining capacity and 2) with the threat of growing international trade sanctions to punish the country for its pursuit of nuclear weapons, refined gasoline will be harder to obtain.  Oh, and it also sits on the second largest natural gas reserve in the world.  Just like in the U.S. a big limiting factor is a dearth of CNG fueling stations.  The country has around 1,500 but expects to add another 900 in a year or two. I guess the good thing about an authoritarian regime is that you can get stuff done quickly.

In the U.S., we have anything but an authoritarian regime (no matter what picketers in powdered wigs say) so we will have to depend on a combination of government incentives to stimulate the market to build the CNG fueling infrastructure.  It won't happen overnight, but I am increasingly of the belief that there will be a real market for CNG vehicles in the U.S.  It just might not be very robust for at least another five to ten years, and even then it will be a poor stepchild to oil-based gasoline.

No comments: