Monday, April 12, 2004

The Other Gas for Cars
Yesterday's NY Times carried an article on celebrities converting their SUVs to run on compressed natural gas (CNG), as a way of reducing the environmental and energy security guilt associated with driving big, heavy cars. It raised several interesting questions about the advantages of natural gas powered vehicles that are available now, compared with hydrogen fuel cell cars that may still be ten years away. These are the kind of questions we should be asking, since any fuel conversion will entail major changes in our infrastructure and primary energy choices.

Other questions that should also be on the table include the following:

Although the Times cites natural gas as a domestically-produced fuel, most analysts including the government's Energy Information Agency anticipate that any growth in US natural gas demand will have to be met through increased imports, because US gas production has stagnated in recent years. This will require construction of a number of LNG (liquefied natural gas) import terminals, a new pipeline from Alaska or Canada, or both. Are incremental gas imports best used for transportation, or as the cleanest fuel for electricity generation?

Compressed natural gas cars are currently cheaper to fuel than their gasoline counterparts, largely because natural gas carries no transportation taxes. If more than a small fraction of the cars on the road converted to natural gas, some alternative means would have to be found for collecting taxes for highway repair and the other items funded by the state and federal fuel taxes. If natural gas for road use were taxed at the same rate as gasoline or diesel, much of its advantage would disappear. Should CNG receive this kind of subsidy because of its environmental benefits?

There's also a practical question about the number of miles an owner would have to travel annually in order to defray the investment in conversion to CNG, even if the fuel retains its road tax exemption. The Times indicated a conversion cost of $10,000, which seems high. Even at $5,000, I suspect that only fleets of high use vehicles, such as taxis, delivery vehicles would find this advantageous, and in fact, it is mostly these kinds of vehicles that have already made this switch.

I'll leave the safety concerns for others to highlight, except to say that I don't personally fancy the idea of driving around with a high-pressure tank in the back of my car, even if it is wrapped in Kevlar and has been dropped off the Empire State Building in tests. I spent enough time in refineries to have a very healthy respect for the amount of mechanical energy stored in a gas at 2000 psi or higher pressure.

At the same time I don't want to dismiss this idea out of hand. It has some merit and may make sense for some consumers, even if it does nothing more than assuage their consciences. And if our government saw enough benefit in this idea to be willing to open up some of the gas fields currently off limits (see my posting of March 11 in archives), then we might actually see domestic natural gas prices come down enough that this could be a real winner.

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