Natural gas! Almost everything's natural gas! That was my impression while walking through the displays at the Alternative Clean Transportation Expo in early May at the Long Beach Convention Center. Suppliers were offering all sorts of equipment and services connected to this fuel that's so much in the news.
Part of it was the location -- California, whose Clean Air officials have endorsed natural gas by granting money to people who buy trucks and buses with engines that burn the stuff. They support other clean-burning fuels, too, but natural gas seems to be the anointed one.
The Wrightspeed Route turbine-electric hybrid truck that I review in the current Engine Smarts blog was running on compressed natural gas, something Ian Wright, the company's president, noted during my drive. "It could run on other things," he said, "but we chose natural gas for this truck." So it fit right in with this expo. But is all the hype over natural gas accurate?
The oil companies tell us we have vast reserves of gas in the United States, and it would be foolish not to use it. However, does direct use as a motor fuel make sense? The gas itself is cheap, sure. But a heavy truck costs tens of thousands of dollars to equip for natural gas, and filling stations cost hundreds of thousands of dollars, even millions. Who can afford that? Not many, which is why natural gas will continue to be a very small part of the commercial truck scene, according to forecasts I've seen.
Yes, government-sponsored grants and tax rebates reduce the so-called incremental costs of buying a truck that runs on gas or another favored alternative fuel, and sometimes these incentives pay some or all of the cost of setting up filling stations. But incentives come and go as lawmakers bend with political and budgetary winds.
Some argue that incentives are absolutely necessary to spur early adoption. Others now are saying that the fuel's price alone can make a good business case without any incentives. That's been true since natural gas's price has plunged due to massive drilling and production. At $2 or so per diesel-equivalent gallon, natural gas is a big bargain. But this can change, and might if producers cut back, as some are doing, and demand rises, as it will if more electric generating plants switch from coal to gas.
The president of Shell Oil has just predicted that natural gas's price will double in a few years. There is some cushion between the prices of bulk gas and gas sold as motor fuel, but gas destined for trucks must go up if bulk prices do.
Won't that do a number on any truck operator's business case? Won't people with a fleet of highly specialized trucks and tractors be left holding expensive gas bags that now cost more to run than if they had straight diesels? I'm not hoping this happens, just wondering what T. Boone Pickens and the other boosters of natural gas will say if it does.
Meanwhile, wouldn't natural gas be better used as a feedstock for production of fuels that are easier and much less costly to handle and store on a vehicle? Why not let producers make the big investments in special refineries and let Pickens sell his gas to them?
