The Natural Gas Option

As I noted in last Friday's posting, two recent scientific studies have severely undermined the environmental rationale for conventional biofuels, including corn ethanol. But if corn ethanol no longer looks attractive as a combined solution for our energy security and climate woes, where should we turn for a better alternative? As odd as it might sound to promote a fossil fuel, rather than another form of renewable energy, our lack of focus on natural gas as a transportation fuel seems equally surprising and illogical to me. It might not be the long-term answer to our complex needs, but making greater use of natural gas in vehicles could provide a broad range of benefits, with fewer drawbacks than some of the alternatives we are pushing now.

In addition to the natural gas-fueled buses that are becoming commonplace in big cities, cars running on compressed natural gas (CNG) are already on the road, including CNG taxis and fleet vehicles. For consumers, Honda sells a natural-gas version of its popular Civic model, which can refuel either at home or at commercial CNG stations, of which there are about 850 nationwide. Although the EPA estimates that the equivalent fuel economy of the Civic GX is about the same as a gasoline-powered four-cylinder Civic, its calculated annual fuel cost comes in $658 lower. Unfortunately, it would take just over ten years to pay out the car's higher sticker price, relative to a comparably-equipped gasoline model. If demand for CNG vehicles took off, their cost premium should come down dramatically, since the technology involved is much less intricate than a hybrid's.

There are good reasons to compare CNG to ethanol. Much of the energy required to produce corn ethanol comes from natural gas, in the form of ammonia-based fertilizer and process heat generation. And unlike corn ethanol, CNG consumes virtually no petroleum in its manufacture or distribution. Even before the latest studies cast doubt on ethanol's greenhouse gas reduction credentials, the emissions from a CNG-powered car looked lower than those of one running on E-85, when viewed on a full "well-to-wheels" basis, coming in at around 25% less than conventional gasoline and even a bit lower than diesel. Emissions of traditional pollutants are low enough to qualify the Honda GX as a partial-zero-emission vehicle under California's strict regulations.

While both fuels face obstacles to wider distribution, CNG's might be easier to overcome. Ethanol's big problem is its incompatibility with pipelines, forcing producers to ship it long distances by rail, before being blended into gasoline at the distribution terminal nearest the retail site. Natural gas has no long-distance pipeline issues, aside from some regional bottlenecks, but faces something of a "last-mile" problem: compressing it and putting it into a retail dispenser. That still looks simpler than digging up tens out thousands of service stations to put in E-85 tanks, because station owners don't wish to forego diesel or unleaded premium sales to add a low-volume new product.

Whenever you add a new category of demand without changing existing supply, prices tend to go up, and that's certainly one risk of shifting some of our transportation energy burden onto natural gas. However, gas used in transportation represents such a tiny fraction of current consumption that it could increase by a factor of ten without causing major ripples. The US still has significant untapped natural gas resources, and global production is rising steadily. The bigger risk is that high oil prices will spill over to natural gas and shrink the latter's cost advantage, which is currently close to a 50% discount on energy content.

CNG isn't a silver bullet, any more than anything else is. However, it's an excellent alternative that's available now. It unambiguously improves greenhouse gas emissions compared to gasoline, and it enhances US energy security by diversifying our energy imports away from OPEC. Given those attributes, it's a mystery why it was virtually ignored in the 2007 Clean Energy Bill.