Cleantech Market Intelligence
In the United States, the NGV Games Have Begun
Natural gas vehicles (NGVs) in the United States are often considered the low-hanging fruit of clean transportation. The engine technology has been in use since the 1970’s, and has been around longer than that. The fuel has been inexpensive for most of the last decade, and since the United States became a net importer of oil in 1997-1998, natural gas has been positioned as a domestic energy source. Despite these advantages, the NGV market has progressed in fits and starts for many years for a variety of reasons, only really getting the spotlight again since gas and diesel prices started reaching sustained high levels in 2007 and 2008. The low-hanging fruit is finally starting to get plucked in greater numbers.
When I last worked on a comprehensive analysis of the NGV market in late 2010 and early 2011, the market was seeing strong investment on both the infrastructure side and the vehicle side. In the light duty vehicle market, both Ford and GM announced factory programs (of sorts) with vehicles that could be ordered from dealers. Honda’s venerable Civic GX was soldiering on in a handful of key states. And the EPA had just embarked on a much needed revamp of the certification process for NGV engines – something that promised to reduce paperwork and costs.
The medium duty market was essentially owned by converters of Ford trucks at the time, in large part because GM had just dumped their GMC MD truck lines as part of its cost-cutting strategy. The heavy duty truck market was relegated to stop-and-go type vehicles (i.e., refuse trucks and transit buses) and was still relatively small. The seeds for NGV growth were planted, but the sprouts were still very young. That year, I forecasted total NGV sales of 15,636 vehicles for 2012.
A year later, and those sprouts are forming real growth. As I report in my most recent NGV report, “Light Duty Natural Gas Vehicles,” the EPA’s new certification process is now in effect and the excitement on the light duty side is almost palpable. Chrysler has launched a factory-built truck, a first for U.S. manufacturers, the RAM CNG pickup. Ford and GM have expanded their product lines to include pickups, vans, and, in Ford’s case, the small van, Transit Connect. Even Honda has made the Civic GX available nationwide.
On the heavier vehicles, a new 12-liter engine from Cummins Westport has the market buzzing with anticipation. Liquid natural gas is seen as an increasingly viable option for heavy-duty long haul trucks and Navistar, Volvo, and Daimler Trucks all have conversions either available or coming soon. This year is looking much stronger and I’ve increased my forecast to just over 20,000 vehicles sold by the end of 2012.
The infrastructure side feels like a tightly wound spring waiting to be sprung. Fleets are adding infrastructure where the costs can be covered by vehicles, but many remain on the fence. Meanwhile, GE, Shell, and of course Clean Energy Fuels have new investments in NGV infrastructure that make the next couple years look more interesting than the last few. In perhaps the most intriguing development, the home refueling appliance is back, making home CNG refueling a possibility again.
In the old chicken-and-egg conundrum between vehicle availability and refueling station infrastructure, it looks to me like the vehicles are now leading the infrastructure, which is working hard to catch up.