Wednesday, December 28, 2011

Advancing the "Egg": CNG in Lafayette

In talking about building a viable compressed natural gas vehicle market, I've long talked about the "chicken and egg" problem:  people won't use CNG if fueling stations aren't available, but companies won't build fueling stations if the demand isn't there.  Today, I feel like classifying the fueling stations as the "egg" and the vehicles as the "chicken."  That, of course, is subject to change.

Anyway...It looks like Lafayette is helping roll the egg down the field with the addition of two new CNG fueling stations, one operated by the city-parish and another by Apache Corp.  Lafayette has at least 40 municipal natural gas vehicles and is looking to convert additional city buses to the fuel.  Additionally, Lafayette has the largest concentration of fleet vehicles in the state, one of the best potential markets for CNG.

Right now, the slow move to CNG has been partially underwritten by government grants (mostly to support vehicle conversions) and natural gas producers (building gas stations that may run at a loss for a while).  A fully market-supported solution likely won't be in place until there are enough chickens on the road.  But seeing more and more eggs is a good start that should lead to more chickens.

But the big fish (to keep up the animal/food metaphor) for natural gas is local and long haul fleet trucking (which usually uses liquefied natural gas rather than compressed).  That is where T. Boone Pickens and his Clean Energy Fuels Corp. are focusing their attention.  Truck fuel consumption dwarfs that of passenger cars, and fleet rigs are better customers because they offer more predictable routes.  But to capture this market, T. Boone and others are going to have to produce a lot more "eggs" and get the NAT GAS Act bill that offers tax incentives for vehicle conversions through Congress.  Only then will we see any significant increase in natural gas as a vehicle fuel.

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