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Jul 30, 2012

Examining the Case for Natural Gas in Transportation Part 1: Passenger Vehicles

 

CNGAs far back as the 1973 Arab oil embargo, natural gas has been considered as a transportation fuel—and understandably so since it burns cleaner than oil. A recent boom in domestic production offers tantalizingly low prices and the potential to ease U.S. dependence on foreign oil.

However, like any alternative fuel, natural gas does not offer a “one-fuel-fits-all” solution. The value proposition of natural gas vehicles varies widely by application. Fleets with high utilization and poor gas mileage, for example, glean near-term value from the switch to natural gas. But the picture for non-fleet passenger vehicles—the source for the majority of U.S. transportation energy use—is considerably more complex.

These complexities become particularly apparent when you compare natural gas to another alternative fuel option garnering even more attention, investment, and criticism: electricity. With limited money to invest, how do the two really stack up?

Upfront Price and Payback

Natural gas vehicles (NGVs) and electric vehicles (EVs) are more expensive than standard vehicles. Although Chrysler plans to release a natural gas passenger vehicle, the only currently available passenger NGV is a Honda Civic that runs on compressed natural gas. With a price premium of roughly $10,000 compared to a standard Civic, the payback period is over 10 years.

Compare that to the Nissan Leaf’s payback period of 9.5 years after a $7500 federal tax credit. Granted, if the same tax credit were extended to NGVs, their payback period would shorten to about six years, but it probably matters little as the average buyer does not consider fuel savings beyond a three-year payback to begin with.

Greenhouse Gas Reduction Potential

NGVs emit about 18 percent less carbon dioxide than their gasoline counterparts on a pump-to-wheels basis. But work by Cornell professor Robert Howarth suggests much of this advantage may be eroded by leakage during extraction and pipeline transport of compressed natural gas (well-to-pump), particularly for shale gas.

Because methane is 20 times more potent than CO2 as a greenhouse gas over a 100-year period, even small amounts of leakage can quickly offset the advantages of cleaner combustion. The controversy about the well-to-pump greenhouse gas intensity of methane continues, but consider this: combustion-fueled vehicles (whether natural gas or gasoline) only convert about 20 percent of fuel energy to power the wheels. In contrast, EVs convert over 60 percent of the electrical energy from the grid to power the wheels.

That grid electricity can be produced from natural gas power plants, resulting in 50 percent better well-to-wheels efficiency (and 42 percent fewer greenhouse gases) than burning the natural gas directly in the vehicle. In the long run, RMI research shows that all EVs could operate completely emissions-free by 2050 consuming only renewable electricity.

Range and Fueling Infrastructure

“Range anxiety” is a commonly cited barrier for EV adoption. Most NGVs currently have better range than EVs, but still face a range challenge as natural gas occupies considerably more space than gasoline. The CNG Honda Civic, for this reason, has about half the trunk space of a standard Civic and range is limited to about 220 miles.

The biggest reason for range anxiety, however, stems from a scarcity of refueling opportunities. Both NGVs and EVs require additional infrastructure investment for speedy refueling/recharging. While EVs can be charged at home from existing outlets—albeit slowly—NGVs require a fueling station capable of pressurizing the gas. More importantly, electricity is everywhere, whereas only 56 percent of U.S. homes have gas lines to begin with.

Long-Term Implications

A long-term perspective reveals additional economic considerations. Lithium ion batteries, the key driver of EV powertrain cost, appear to be descending a steep learning curve that could lead to ~$3-4000 EV price reductions within as few as 3 years. In contrast, NGV powertrains are built from relatively well-established combustion technology that is unlikely to come down the cost curve as quickly.

From a fuel perspective, if infrastructure is built to serve more NGVs, natural gas prices will of course rise with increased demand. The electricity sector here lends a useful analog: natural gas prices have risen 70 percent in the last three months due in part to increased demand from power plants switching to natural gas from coal. In fact, natural gas has consistently exhibited wild volatility for over two decades.

While electricity prices have steadily risen historically, they have exhibited much lower volatility than natural gas prices due in large part to the plethora of sources from which electricity can be generated. In that sense, EVs are fuel agnostic. Investing in EV infrastructure will allow our transportation system to get the most from cheap, domestic natural gas while it remains cheap (via efficient natural-gas-generated electricity) while hedging against future volatility and paving the way for a completely fossil-fuel-free system. If that system includes two-way charging, all those EVs could provide storage capacity to the grid, thus helping enable cost-effective and reliable renewable electricity.

This is the first of a two-part series on Natural Gas In Transportation. Part II will examine the natural gas value proposition for fleet vehicles, including taxi cabs, heavy and medium trucks, and busses.

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Join the Discussion


Showing 1-10 of 12 comments

August 2, 2012

Even further arguments for natural gas conversion to electricity could be made with the introduction of private/public funded electric driven public transportation. Since electric trams and buses are even more efficient then EV's without suffering from the angst issue, the use of electric trains, diesel/electric trains, electric trams, electric subways and electric buses fits into the existing infrastructure including the move to use the Natural Gas electric plants over coal.


August 2, 2012

Thanks for a very thoughtful article. There is another way to look at the problem. It may be the case that your statements about efficiency are not helpful to the average American. The overall efficiency of natural gas power plants in 2005 was 43%, and that of coal fired plants was 33%. This will not change much because advances in materials that enable the slight increases in efficiency at higher temperatures and pressures are being offset by the decreases in efficiencies brought about by emission controls. Now the US average electrical transmission losses result in an additional loss of 6.5% (EIA 2007). Thus, the electricity we receive from the grid that has been produced using natural gas, for example, is .43*.935 = 40% efficient. The electrical efficiency of coal produced electricity is .33*.935 = 31%.
Thus, if we use it in a electrical vehicle of 60% efficiency, our well-to-wheel (WTW) efficiency is .4*.6 = 24% for natural gas produced electricity, and .31*.6 = 18.6% for coal produced electricity. In reality, with the uncertainty between individual situations, lets just say we are experiencing the same degree of inefficiency.

Since the main purpose of this comment is to spur discussion, let me propose that there is a better answer. That is the use of alcohols in spark ignited internal combustion engines (SI-ICE). The EPA, MIT and Lotus Vehicles have all independently shown that either ethanol or methanol can attain 40-42% efficiency in an SI-ICE. This is almost twice the average American vehicle efficiency and equal to, or greater than, the efficiency of a diesel engine.

Now the production of methanol from natural gas is currently between 65 and 70% efficient. Thus, using 40% vehicle efficiency and 65% methanol efficiency we would have a WTW efficiency of .4*.65 = 26%. Again in the same range, BUT with a big difference. It is estimated that it would require $100 more to make a vehicle run on methanol (vs. the $10,000- $15,000 for natural gas or electric vehicles). And, we would incur much lower infrastructure costs, and with larger gas tanks in the vehicles, no inherent range limitations. Further methanol can be made from any organic wastes.

Ethanol is currently more expensive, but if cellulosic ethanol production comes online it may be equally competitive, and could be used with no additional modifications. A final note, if methanol is made from natural gas using concentrated solar energy it is almost a 100% efficient process (thanks to the sun’s input).


August 2, 2012

Another EV advantage over all internal combustion vehicles: NO exhaust. While CNG or LNG vehicles produce less noxious exhaust than gas or diesel, it's still very significant in cities.


August 2, 2012

Almost anything, is better than importing oil from countries that are opposed to our way of life. Alternative energy sources must be developed as quickly as possible, Natural gas costs less, but converting or buying more expensive vehicles make for a longer cost to break even.

Converting coal fired power plants to use Gas is probably, the best near term policy.
Lithium batteries pose a problem because most of it is in China. Problems exist, but looking back to the effort the U.S. was able to bear to win WW II, it seems trivial by comparison. Great effort in lives and treasure were spent in that endeavor. Much of our natural resources were used up then too.

It seems the fossil fuel companies want to run out of everything before any effort is put into alternatives. THERE IS NOT ENOUGH TIME FOR THAT!


August 3, 2012

1. The additional cost for our 1998 Civic GX, over the standard Civic, was $4,500, NOT $10,000. I have not checked a current window sticker yet, but I know that the NGV does not cost $10K more than a comparable Civic.

2. Honda Civic NGVs emit about 30 percent less carbon dioxide, not 18%. The 18% figure may be true for all NGVs in the study, but not for the Honda

3. The CNG Honda range is NOT limited to about 220 miles. 220 miles is the LOWEST range that we have experienced and only from total city driving. We consistently reach 270 to 290 miles per tank when we have a driving mix of both city and highway (the only way that 220 miles is a legitimate range figure is if the driver is always using fast fill stations and only driving in the city. Our range was 160 to 240 miles when we exclusively used fast fill commercial station.

4. Yes, natural gas is not everywhere, but for the person who has a home refueling unit (like Phill), that owner will experience the same joy as an EV owner who wakes up to find a full "tank". With a range of just under 300 miles for our Civic GX, finding a station is NOT a major concern, unless this is the only vehicle for a family. We have not had problems finding CNG refueling stations in northern CA, however, traveling north to Oregon would not be a possibility with a current lack of stations between Redding and Medford.

5. Natural gas pricing volatility is much less than the volatility of gasoline pricing. It has been much steadier over the past 15 years of our experience with our Honda Civic GX.


In spite of all the positives we have experienced with our 1998 Honda Civic GX, we will be replacing it with an EV. We are not happy with Honda's super conservative expiration limit of only 15 years on their Type 4 CNG cylinders. These cylinders are designed and manufactured to a level of quality which could deliver 1,000,000 miles without defects, but Honda chose to make their expiration dependent only upon the calendar. The stress of the accumulated number of fast fills is certainly a greater indicator of CNG cylinder durability than simple age, plus spending over $7K to replace a cylinder on a 15 year old car (when the actual cylinder cost from the manufacturer is well under half that amount) detracts from the owner experience much more than the "potential" of having to replace an EV's battery pack in the same number of years.


August 16, 2012

Lets stop drilling for more "Natural Gas" and make pipeline usable Gas from Renewable Sources! It costs over $4 Million to drill and connect a natural gas well. instead put up a large solar facility or multiple wind generating units and use the electricity produced to breakdown local water into Hydrogen Gas. Locate the various facilities far from cities where land is cheap and pump the Hydrogen gas into nearby gas pipelines so it can be transported and stored in the "Natural Gas" distribution system for use by electric generating plants, industry and over half the homes in the USA. (Because Hydrogen is a constituent of "Natural" gas it will mix and requires no modification in the equipment to transport, store, meter, and use. It is difficult to make solid renewable fuel to replace coal, but changing Coal fueled to Gas is do-able! Also the wind farms can grow cows, or sheep and goats etc.


August 16, 2012

I understand that liquefying NG (LNG) overcomes most of the range issue and is practical for long distance heavy vehicles.


August 16, 2012

Why use fuel cells in a car, they are heavy, and you have to carry high pressure tanks for the car, and batteries to produce starting-out acceleration. And your still driving with an electric motor and batteries too. Skip the duplication, lower the price of the car by simplifying. just motor, batteries and a control box. use fuel cells to produce the power to recharge where a high power grid connection is not available. like 50 miles out of the city. Each part of the technology has a best use in the transportation picture and not just one has to do everything, use what works BEST ! Design other things for the wrest, in the places they are best. this world has never been "One size fits all." But, we have always proven there always "ALTERNATIVES" and we must use the best. Not always the most profitable today, but better someday.


August 16, 2012

To Bill Wentworth:
Thanks for raising an interesting point about Liquid Natural Gas (LNG). Its costlier than CNG but 2.4 times less bulky and thus more practical from a volume perspective. It does have disadvantages though: it must be maintained at -261 degrees F in vacuum-insulated tanks and methane boil off can become a problem for low utilization vehicles--the more down time, the more boil off. LNG also creates a ground-hugging layer of super cold but highly flammable gas if released. Infrastructure is scarce for LNG as compared to CNG, and the cost of the needed infrastructure is higher for LNG. -Greg Rucks, RMI Consultant


September 22, 2012

I bought my Honda Civic GX in 2001 and it has been the perfect commuter car LA. I paid about $5k more than the LX but I'm sure that I have recovered the added cost. I can currently fill the tank at the city lot in Riverside for $1.20 / gge. The real value is access to HOV lanes - saving over an hour on rush hour commutes into LA.

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