June 14, 2011. The Green Piece Column.
Hybrids, plug-ins, battery electrics, biofuels and fuel cells – there are so many alternative fuelling options emerging for the vehicles of tomorrow that it’s difficult to keep track. Indeed one fuelling option that appears to have been lost in the shuffle is that of natural gas.
That was until both the Massachusetts Institute of Technology (MIT) and the International Energy Agency (IEA) chose to shine the spotlight on natural gas as a potential source of fuel for the vehicles of tomorrow in two separate reports released last week (see article). So are we entering a golden age of gas, or will it continue to be little more than a bit-part player in the green car race?
Why natural gas vehicles?
The main advantage of natural gas vehicles is their low CO2 emissions when compared to petrol and diesel vehicles. Thanks to the lower carbon/hydrogen ratio of methane, for example, CO2 emissions from the combustion of natural gas are around 75 per cent lower than those of petrol for a given amount of energy production. On a lifecycle basis this percentage is reduced because the greenhouse gas emissions in production and distribution are greater for natural gas than oil products; but overall, the advantage is significant.
However, according to the MIT report, only 0.15 per cent of natural gas is currently used as a vehicle transportation fuel and it makes up only around one per cent of the vehicle parc. Indeed the IEA notes that natural gas vehicles account for less than one per cent of total world road fuel consumption; and less than one per cent of total world gas demand.
Do natural gas vehicles have potential?
The MIT believes that significant penetration of natural gas vehicles could have massive potential both in terms of their environmental benefits and in helping the US (the focus of its study) enjoy energy security. It believes that about two Tcf of natural gas per year – which is less than 10 per cent of current US consumption – could replace about one million bpd of oil – around five per cent of the country’s annual consumption.
Similarly, the IEA cites a number of benefits with natural gas vehicles including fuel cost savings and reduced greenhouse gas emissions. It even suggests that compressed natural gas (CNG) vehicles may emit less CO2 per kilometre (km) than both electric and plug-in hybrid vehicles depending on the fuels used to produce the electricity. For example, in 2020 it predicts that CNG vehicles will emit less CO2 per km than plug-ins in many regions, assuming 10 per cent of the vehicle kilometres of plug-in hybrid vehicles are electrically driven. However, they would emit twice as much CO2 per km in the European Union because of the low carbon density of electricity generation in that region.
In particular, the CNG market segments offer an attractive payback in the near term for heavy duty vehicles and fleet vehicles such as taxis and government vehicles. However, for light passenger vehicles, their high incremental costs would lead to higher payback times for the average driver and so significant penetration is unlikely.
However, where the MIT believes natural gas vehicles could have more success is if it is converted into room temperature liquid fuels that can be stored at atmospheric pressure. In this regard, methanol is the leader because it has been produced for a long period at an industrial scale and has the lowest cost and lowest greenhouse gas emissions.
So what are the drawbacks?
The main barrier to success for natural gas vehicles is the lack of refuelling infrastructure as well as the higher purchase price or conversion cost.
As such, the IEA does not see natural gas as a viable alternative to petrol and diesel in North America. Instead it believes the most likely source of growth is in developing areas such as Asia and Latin America.
Similarly, the MIT would like to see a comparative study of natural gas derived diesel, petrol and methanol; as well as natural gas derived ethanol, mixed alcohol and DME with a cost analysis and a look into the infrastructure requirements and environmental issues to determine whether it is worthwhile.
Our verdict – Priorities elsewhere
Natural gas, like all alternative fuels, is worthy of investigation as we determine how light commercial vehicles will be fuelled going forward. However, electricity from renewable sources appears to offer both a cheaper and more environmentally friendly solution.
Of course natural gas will have a role to play, particularly for public and private fleets for which infrastructure would be easier to deploy. In fact, the IEA suggests there may be as many as 70million natural gas vehicles in the world fleet in 2035 because of a combination of government policies and lower wholesale gas prices.
However, for passenger cars it’s important that the right alternative fuelling method is found and that serious investment is focused in this area to ease the transition from petrol and diesel and to boost consumer confidence. As such it seems natural gas vehicles have already lost the battle to electrification and are unlikely to emerge as anything more than a niche market alternative.
By Faye Sunderland.
