Commentary - CNG Is Here Now, Its Cheap, We Own It, But No One Seems To Care In DC

With today's release of the NADA report on dismal Q4 2012 EV sales, it might be worth remembering this editorial originally written in January 2011, regarding the viablity of Compressed Natural Gas (CNG) and its price advantages when applied to commercial/POVs.

Since today's average price per gallon (PPG) price of $3.523 for regular, $3.681 for mid-grade, $3.830 for premium, $3.975 for diesel, $3.189 for E85, and $4.197 as an E85 MPG/BTU adjusted price continues to climb (as of Feb 4, 2013), one can only believe that Obama's fossil-fuels policy must be nothing more than the cash cow boondoggle of the Century (higher prices mean more taxes - ja?). But, on the other hand, he 'could' suddenly decide to amaze and delight us all by figuring out that drilling for and developing our domestic natural gas infrastructure might just might be a 'good idea' on behalf of the average consumer.

'Course, I ain't gonna hold my breath; since as the old saying goes, 'Shooting skeet on the range with a Photoshop pop-gun, ain't nearly the same fun as shooting fish in a barrel with a Gatling gun.'

Commentary by Rick Carlton

With gasoline point of sale prices averaging $3 per gallon nationally, and with spot oil costs remaining between $88 - $93 per barrel (based on 1/7/2011 Bloomberg energy metrics) the question becomes, at what point do we get serious about alternative fuels?

Granted, there's considerable hoopla about electric power these days, but EVs are not practical solutions for the average consumer. There is no nationally-recognized charging infrastructure on the horizon, nor are EVs logical in terms of cost or utility for the typical buyer. For example, at the top of the electric consumer mountain the Tesla stands alone at an MSRP of $140,000. For that price, you get loads of style and blazing speed, just as long as you only want to go fast for 200 miles. At that point, the Tesla's elegant automobile 'du art turns into a monument to the hubris of technology.

On the other hand, there are other more affordable options, including the Think City, Phoenix Light Truck or Aptera Typ-1, where MSRPs are a bit more reasonable ranging from $27,000 to $45,000, but these vehicles provide their own challenges in the form of even more limited ranges of 100 to 130 miles. Then, once these vehicles are fully discharged, in order to re-energize them it takes an average of 7 hours. So, unless you live in a highly-urban area, where the goal is to go a mile or so and back for a gallon of milk, (averaging $2.65 nationally by the way), you are going to be spending a lot of time plugging in and out. Finally, there is a "gotcha" operating cost in the mix, since regularly charging your EV on the local electric grid, will ultimately come back to haunt the consumer downstream based on higher localized electric utility costs.

However, although it is obvious that there's no such thing as a free lunch, there are more reasonably priced and readily-available solutions to the dual issues of cost and energy security in this country. Perhaps the most important of all of these opportunities, is a national commitment to the development of compressed natural gas (CNG) solutions for consumer cars.

For example, according to Q4 2010 prices, the base cost of a gasoline gallon equivalent (gge) of CNG is $0.85, where the national average of a gallon of refined gasoline is currently $2.97 for 87 Octane. Obviously the cost variance is clear, but additional development cost economies can be easily leveraged by the CNG industry's long-history with the conversion of gasoline to Liquid Natural Gas (LNG), or Liquid Propane Gas (LPG) engines for fleet vehicle use.

Further, the EPA is already embedded within the gas industry, and any cost burdens are already included as part of daily gge averages, so any follow-in regulatory price impacts will be limited to some degree. Finally, there is the fact that the North American continent harbors perhaps the greatest concentration of natural gas in the world, so supply will be plentiful and domestically controlled for the foreseeable future. All in all then, the question comes down to "why haven't we done something about this?" Frankly, 'tis a puzzlement. However, along with the already-proven cost efficiencies of CNG offered by the fleet vehicle industry, there are several well-known energy evangelists trying to dent the illogic of the "electric-first" auto solution now, including Boone Pickens, although to date CNG's value still needs more marketing/promotion push. Nonetheless, all one really needs to do is to take a long, honest look at the economic burden necessary to develop "whole-cloth" national high-rate electric car production, and perhaps the differences between the hiss of CNG, versus the buzz of electric power will become more obvious.