The Auto Industry's Natural Gas Response

A natural gas surplus and its cleaner burning properties are not enough to nudge the auto industry to take another step toward building vehicles running on natural gas. The report from IHS Cambridge Energy Research Associates and the gas surplus together aren't going to persuade them to reconsider investing in natural gas. "Fueling North America's Energy Future: The Unconventional Natural Gas Revolution and the Carbon Agenda" report (PDF) states:

"Shale gas accounted for only 1 percent of US natural gas supply in 2000; today it is 20 percent. By 2035 it could be 50 percent. Shale gas and other forms of unconventional natural gas would underpin a significant increase in US natural gas consumption—and could allow the electric power industry to almost double its use of natural gas, from 19 billion cubic feet (Bcf) per day at present to 35 Bcf per day by 2035."

Here are some of the key findings from the report:

• North America's oilfield production of natural gas supply is enough to support the current consumption level for 100-plus years.
• Expect shale gas to grow more than 50 percent of the supply portfolio by 2030.
• Homegrown natural gas can lower dependency on foreign oil.

It's understandable that the auto industry didn't have much faith in natural gas considering we had a low supply of natural gas just a few years ago. Nonetheless, some automakers invested in the natural gas market and saw poor results. Because of this experience, automakers think natural gas is not a game changer and is better for those in niches.

What's more is that American auto companies may resist change because it's pricey to build an infrastructure that can make natural gas vehicles. According to several resources, a car running on natural gas costs $10,000 more than traditional gasoline vehicles. Furthermore, it costs four times more to deliver natural gas than it does for gasoline and diesel stations. One reason is that natural gas stations take up more space. To boot, cars running on natural gas lose some roominess because the natural gas tank is also larger.

Since studies report there's plenty of natural gas to support us for years to come, we need to seek out a compromise that lets us make the most of natural gas. And at the same time, use that time to search for other power resources and build them before natural gas runs out.