Thursday, February 2, 2012

Natural Gas Vehicles Gaining Steam

The move to bring more natural gas to our nation's highways is picking up some momentum.  Last week, in his State of the Union Address, President Obama talked up natural gas, especially as a transportation fuel, and days later appeared at a natural gas fueling station in Nevada.  The Administration is taking steps to assist in the development of natural gas vehicles, but it takes the private sector to make it work.

To that end, earlier this week, truck maker Navistar announced a partnership with T. Boone Pickens' Clean Energy Fuels Corp. to sell natural gas powered trucks at the same cost as diesel powered vehicles (press release). The rub is that the buyer must purchase fuel from Clean Energy, which would guarantee that the fuel price would be 50 to 60 cents cheaper per gallon than diesel.  While that guaranteed savings is lower than market rates, the economic payback for the buyer is significant, especially on the front end.  The program will start with medium-duty trucks this year and add heavy-duty vehicles next year.

Clean Energy previously announced plans to build 70 new natural gas fueling stations at strategic locations in 33 state by year end as part of a larger plan to build 150 stations by 2013 as part of its "America's Natural Gas Highway" program.  Many of these stations will be built at existing Flyiing J locations.

While most trucks use liquefied natural gas, this new infrastructure will still help build some CNG fueling capacity for smaller vehicles.  But the big fish here is big trucks, which represent a much larger market for natural gas because of the vast quantities of fuel these trucks use.

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