SLOW RISE SEEN FOR NATURAL GAS AS U.S. MOTOR FUEL

Natural gas has a better shot at the U.S. transportation fuel market than ever before, in part because it now has "sponsorship." But it still won't make significant inroads into that market without government help, at least in the beginning. That's the analysis provided by natural gas vehicle advocate Boone Pickens late last month at the Houston Club's Distinguished Speaker Series luncheon. "Electric cars don't have a chance," he said.

April 5, 1993

2 min read

Natural gas has a better shot at the U.S. transportation fuel market than ever before, in part because it now has "sponsorship."

But it still won't make significant inroads into that market without government help, at least in the beginning. That's the analysis provided by natural gas vehicle advocate Boone Pickens late last month at the Houston Club's Distinguished Speaker Series luncheon.

"Electric cars don't have a chance," he said.

Today's "sponsors" of natural gas include the Clean Air Act amendments of 1990, the Energy Policy Act of 1992, and President Bill Clinton, said Pickens, who is chairman of the Natural Gas Vehicle Coalition and chairman of Mesa Inc., Dallas.

The CAA amendments require use of "clean fuels" in fleets, and the Energy Policy Act requires use of alternative transportation fuels, including natural gas. Clinton has often endorsed increased use of natural gas to meet environmental goals.

CONVERSION HURDLE

Natural gas will not need a subsidy to compete in the vehicle fuel market, Pickens said, but it will need government help such as a tax incentive to encourage engine conversion.

The cost of conversion is one hurdle that must be cleared before natural gas vehicles can expand beyond the fleet market.

Pickens pegs the conversion cost at about $2,500 today. The cost of a home refueling unit is also about $2,500. To pay back these costs, a vehicle has to be driven many more miles than the average private car.

Pickens said lower fuel costs and reduced maintenance expense make natural gas pay out for high mileage fleet vehicles.

Projections of how quickly the market will develop vary widely. If manufacturers expanded programs to build natural gas vehicles and the refueling network continued to grow, the market would develop faster.

"It's not a question of if but when" large numbers of U.S. cars and trucks will be converted to natural gas, Pickens told the group. He estimated there are 600 natural gas refueling stations in the U.S., and three or four stations are being added each week.