Here’s the basic premise of this article –
In terms of energy equivalence, 1 Barrel of Gasoline = 6 MCF of Compressed Natural Gas.
Cost of 1 Barrel of Gasoline = ~ $100
Cost of 6 MCF of CNG = $2.5 * 6 = ~ $15 (!!!)
So CNG costs less than 1/6th of Gasoline to produce the same energy!
(These costs are approximate, but you get the picture)
Granted the difference at the pump is not that much. A gallon equivalent of CNG costs a little less than half of Gasoline, but this is likely to move in only 1 direction – CNG prices at the pump will continue to go down, as more efficient supply and distribution channels are established, and Gasoline will continue to move upwards, potentially widening the difference to a multiple of 4 or more!
The point is that Natural Gas is going to be a very compelling alternative to not only Gasoline, but also Gas-Electric hybrids.
Today only 1 automaker has a (non-commercial) CNG car on the roads – Honda, with their Civic. And they’ve had it for over 10 years. Few automakers are investing in this technology to have their own CNG models in the foreseeable future.
This reminds me of Toyota in 1996, when it starting investing in the electric-gas hybrid technology before anyone else, and we’ve seen where they’ve come in terms of complete market domination in that segment.
That’s not to say that the CNG Civic does not have its flaws, but so did the first generation Prius in 1998. Natural Gas refueling stations are few and far between, but that’s starting to change. And the additional cost of the technology will go down as volumes go up.
The question is – is Honda set to have the last laugh?
Data sourced from www.CarPredictor.com and Google Finance.