Monday, November 7, 2011

Louisiana Finally Looking Harder at CNG

A handful of Louisiana officials met recently with natural gas industry representatives to look at the possibility of creating better fueling infrastructure for compressed natural gas (CNG).  The meeting took place in October and was led by Public Service Commission chairman Jimmy Field.

This effort seems natural given the large quantities of gas produced in Louisiana, but it will inherently not be market-driven endeavor and likely will require government-driven economic incentives, which are not politically popular in the country these days.  Looking at a short list of officials in attendance, all were Republicans (I'm not sure there are any Democrats left in Louisiana these days), so the good news is that any effort to create CNG infrastructure likely won't involve a partisan battle.

Early ideas are to make I-49, which runs from Lafayette through the heart of the Haynesville Shale a natural gas corridor, much like I-15 in Utah.  That's a good start, but this, as with all efforts to create an environment conducive to widespread CNG use, will have to conquer the chicken and egg issue of not enough fueling stations vs. not enough users.  As T. Boone Pickens figured out, the best way to create the infrastructure is to penetrate the route truck markets.  CNG delivery, short haul and service trucks eat up lots of gas and would be a reliable CNG customer.

I don't think the consumer model will follow, though.  As much as I dislike plug-in hybrids for the fact that they effectively run on coal (at least a little more than 50% coal given the current breakdown of power generation these days), I think they have a better shot at gaining market share among small vehicle users.   I think CNG has too many negative perception issues at this time, not to mention a lack of models to sell other than the Honda Civic.

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