Operating automobiles on compressed natural gas instead of gasoline is not a new idea. In many of the worlds major cities, buses and taxis have converted to natural gas. The problem has always been the lack of sufficient refuelling stations. Is it a chicken and egg thing? Does there need to be more fulling points before more people convert to natural gas or do more people have to convert first to push companies into building an adequate system of refuelling stations. Personally, I think there has to be more refulling stations first; but I will get to that in a moment. First let’s look at why it is a good idea.
I came across some good data in the investment news letter $treet Authority First let’s look at this graph
As the author of the news letter, Nathan Slaughter, points out
A barrel of oil contains about six times the raw energy content of a thousand cubic feet (Mcf) of natural gas. So all things being equal, with oil prices about $99 per barrel, natural gas should fetch about one-sixth as much, or $16.50 per Mcf.
But thanks to horizontal drilling and fracking technologies, the United States is now awash in accessible, cleaner-burning natural-gas resources. And the resulting flood of natural gas has created a surplus, causing prices to collapse.
Right now, natural gas prices are currently languishing at $3.80 per Mcf. Multiply by six, and you see that it costs less than $25 to get an equivalent amount of energy from natural gas as you get from a barrel of oil. So on an energy-equivalent basis, natural gas is roughly one-fourth the cost of oil.
So, although at today’s price of natural gas, the equivalent of a gallon of gasoline would be about 75% cheaper, the gas producers are feeling a squeeze on their profits and some companies are cutting back on drilling and development of natural gas until demand brings prices up to the point where it makes economic sense to continue expanding production.
Surely there is a price for natural gas that would satisfy both the consumers and the producers. Instead of reducing vehicle full cost 75% maybe it would be 50 or 40 or 30% cheaper for the consumer. Still good.
The benefits to our nation would be many. If there were a nation-wide system of refuelling and most car and trucks and buses were converted to run on natural gas. all vehicle users would save on fuel cost and thus have more disposable income to spend or save. The environment, especially in the big cities that suffer from smog, would benefit from near zero pollution from burning natural gas. The transportation element in the cost of all products would go down. Oil consumption in the United States would drop dramatically and we could stop sending so many of our dollars to unfriendly nations in the Middle-East and South America. US oil producers could become exporters and we would benefit by reducing our trade imbalance.
But how to get the supply, including refuelling stations, and demand to meet? Current in some major cities fleet owners of cars and buses are converting to natural gas. This is demand pushing supply and it is progressing very slowly. I personally would like to see the suppliers pushing demand. In an ideal free market system the suppliers (Big Gas and Big Oil are essentially the same players) would put on massive promotional campaigns on the benefits of converting to natural gas. They should put up their risk capital to install refuelling stations ahead of demand; starting with the major cities and then eventually along the Interstate highways and eventually through out all of America. They may even need to set up low-cost financing to incentivize people to make the change. The last thing we should want is for our nanny state central government to get into the act of subsidizing the producers and the consumers. in this age of crony capitalism, I would be surprised if Big Gas/Big Oil are aren’t waiting for government to step-in. I am surprised that some politician isn’t already promoting such an idea.
Converting to natural gas should be a win-win for everybody. Will it happen? I don’t know.
Well, that’s what I’m thinking. What are your thoughts?
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Asylum Watch 
Sounds excellent to me. We started out without gas stations, and private enterprise figured out a way to do it, onward with this concept ast well. Last night T Boone Pickens made the remark the he has drilled over 3000 wells with fracking without one problem.
It seems so obvious. Why is no one talking about this?
Off topic– looks like Obamacare just had a bad day at the Supreme Court. MSNBC thinks its going down.
It sounds like the government is arguing out of both sides of it’s mouth. I’ll be praying until the final decision comes down.
I’m pretty sure that demand for refueling stations will have to lead the way. Building infrastructure is too costly and too big a risk to do it on the come.
That’s one of the problems with Obama’s electric car fantasy, particularly combined with his latest EPA coal fired electricity kill-off. In typical Democrat fashion, he seems to think that everything will appear magically, at no cost and with no impact (no lack of resources to make batteries or environmental impact from the mining, no problems with supplying power to recharge and no impact on the grid, no changes needed in infrastructure, and, best of all, no cost to the poor and middle class who are stuck driving older, non-electric, non-hybrid cars).
For all of their “natural” credentials and their Darwinian outlook, leftists seem to miss the fact that economics works organically. Things grow at their own pace and things adapt to the changes. Sometimes it’s fast, sometimes it’s slow. If you try to force it, you’ve got problems. This is even more true when an entity from the outside, like the federal government, tries to force changes.
I’d love to see natural gas powered vehicles, and I’m sure they’re coming. It’ll be interesting to see how the market works out the refueling issue. The market WILL work it out.
By the way… apparently, the EPA is now moving more strongly against fracking. http://hotair.com/archives/2012/03/27/epa-to-kill-new-coal-fired-plants-through-first-ever-greenhouse-gas-regulations/
Thanks for the link to the Hot Air article, Pat. that is very discouraging.
My dad was talking about this the other day. He seems pretty stoked about the future of natural gas in a lot of applications, including cars. We have so much of the stuff it makes a lot of sense to use it.
I’m hoping with you; this needs to happen…sooner, rather than later.
This could be a game changer, KS.
Though natural gas would work and its plentiful right now, I think hydrogen is the best long-term solution for replacing gasoline in internal combustion engines.
And its a permanent solution.
Hydrogen is the cleanest fuel of all. Its only byproduct is water. There is no R&D needed, the technology for it has been around for about 100 years. Its already used in Scandinavian cars and there are hydrogen fueling stations even being being built in the U.S… government funded in California, of course. LOL!!!
Retrofitting cars for hydrogen is probably the same cost as natural gas. The only problem, and its not much of one, is that the infrastruture for natural gas delivery is more developed than anything for hydrogen… but you could easily adapt what exists to hydrogen.
Interesting, AZ. I wasn’t aware that the technology had advanced so far. Do you have any data on the cost competitiveness of hydrogen a fuel?
Just a question… I love the hydrogen technology. However, hydrogen needs to be created. My understanding (and this could be wrong) is that you don’t drill for hydrogen, you basically have to separate hydrogen from oxygen to get the hydrogen, and it takes a lot of energy to do that… Though it can be done with nuclear fairly readily. So, my question is, where do we get the hydrogen to utilize it as a source of fuel? And, if my understanding is correct (we have to get it from water-H20-and then utilize it as a fuel which converts it back to H2O) what’s the cost?
You seem to know more about this than I do and instead of doing a bunch of research today, I’m just picking your brain.
It seems like a great idea, but the problem is that Obama isn’t really interested in bringing down the cost of energy. He is only interested in curbing our driving habits to control us, and helping his green enrgy friends make a few bucks.
This can and should be done by the private sector alone, Steve. And, Obama…well, he can go to hell!
I couldn’t agree with you more!
I don’t know it takes to make a station friendly to dispensing natural gas. Could current gasoline stations be retooled – even one or to pumps (or whatever is used for natural gas dispensing)? I remember Willie Nelson opened some Ethanol stations, and I think they were a part of traditional “filling stations” (remember when they were called “filling stations?”).
Yes, I do remember, Maggie, when we spoke of “filling stations”. It should not be that difficult to adapt current gas stations to facilitate natural gas refuelling points.
If a retrofit isn’t that difficult, the natural gas “guys” should get busy.
Haven’t you heard? Natural gas is a “fossil fuel” and that means it is pure evil. We are going to have solar driven airplanes and wind driven coffee pots. We can put pedal cars on the list, too, just like the ones we had when we were little bitty tykes. During the coming ice age, we can all buy cross country skis to get ourselves to work. I, personally, am thinking of how I can hang glide to the grocery store, but I’m not high enough up yet to swoop in with my handmade recyclable grocery bags. And the lift to get home is tough while carrying that extra weight. Still working on that. We could turn the roads into rivers and paddle boat our way. Beep beep…beep beep !!
Not to worry, Cheryl. When Obama finishes creating his world of pink unicorns, all will be well.
Does this mean algae is no longer in the equation?
Well, I suppose that socialist pond scum is always an option.
Out here some of our cars have a gas capacity along with a normal petrol tank, a sort of old hybrid if you will. My understanding is that the cars can’t get as much mileage from gas as they can from petrol, but because it’s much cheaper it helps. I don’t know of any cars that run only on gas though.
Yes, it is dollar cost per mile that is important rather than miles per unit of fuel.
Great idea but it will never happen under the “hands off business, no regulation” and anyone suggesting it is a socialist. ideology that is touted here (eg. “I suppose that socialist pond scum is always an option”).
The problem is that many of you don’t understand how business works. As long as gasoline supplies are such that petroleum companies can keep profits at or above today’s levels, there is no incentive or reason to invest in natural gas infrastructure. Companies are there to maximize stockholder value and nothing else. They cannot do that while at the same time look out for our national interests or future. So if government is forbidden to do it, then it will never get done.
Tom, it may be you that doesn’t understand how business works. Oil and gas cpmpanies are there, as you say, to maximize shareholder value. So, what makes you think that they couldn’t make the same or much more profits by encouraging the conversion of convention power plants and most of our transportation system to using natural gas. Do you think that here would still not be a world market for their oil? Of course there would be. There is no reason the US can not be an oil exporting nation and the same is true for coal.