RIP natural-gas cars, doomed by cheap gas and electric cars


UPS natural gas fueling station

UPS natural gas fueling station

Enlarge Photo

Natural gas vehicles were first promoted starting in about 2000 as a way to reduce reliance on imported oil and cut tailpipe emissions.

Their promise appeared to grow near the height of the global financial crisis, when gas prices hovered around $4 per gallon across much of the United States.

The domestic fuel promised to cut carbon-dioxide emissions and cut fuel costs for drivers—at a time when electric cars were essentially nonexistent.

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This left a market primed for natural-gas vehicles, one in which the Clean Energy Fuel Corporation planned to capitalize on the situation.

Once valued at $1.8 billion, Clean Energy foresaw a natural-gas revolution through its efforts to convert millions of trucks, buses, and other commercial vehicles to run on the cheaper, more efficient fuel.

Things change, however, and new drilling techniques led to a U.S. energy boom in which increased domestic production caused oil prices to tumble, making gasoline cheap once again.

2014 Honda Civic Natural Gas

2014 Honda Civic Natural Gas

Enlarge Photo

Now, it's safe to say natural gas as a fuel for everyday vehicles is all but dead, as detailed in an article published Monday by Bloomberg.

Shares of once-booming Clean Energy Corp. are down 90 percent from their peak in 2012 and the road to natural-gas expansion is no longer a clearly defined one.

Natural gas received a double whammy: following the fall in oil and gasoline prices several years ago, electric and plug-in cars started to find their footing.

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Between 2008 and 2015, the number of plug-in cars on U.S. roads almost tripled, and the auto industry at large is preparing to invest vastly more in longer-range, higher-volume plug-in electric cars.

In the meantime, a gallon of diesel fuel cost around $2.55 on average in the United States this year, while a gallon-equivalent of natural gas runs $2.52 on average—hardly a bargain for commercial vehicle operators.

Combined with the substantial investment needed to convert commercial trucks and buses from diesel to liquefied natural gas—a figure that can range from $30,000 to $50,000—the fuel source no longer makes sense for many fleet operators.

2015 Chevrolet Impala Bi-Fuel Natural Gas

2015 Chevrolet Impala Bi-Fuel Natural Gas

Enlarge Photo

The market and industry has largely dictated the future, and more efficient internal-combustion engines and electric cars have provided a clear roadmap

If that's not enough bad news, the cost to build a liquefied natural gas filling station can approach $1.8 million per station.

In contrast, electric cars can be plugged into any household outlet, with Level 2 charging stations available for purchase at a couple-hundred dollar premium.

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The only manufacturer to offer a natural-gas passenger car in the U.S. was Honda: it offered the Civic GX and then the Civic Natural Gas from 2002 through 2015.

Sales never reached more than a few thousand a year, and the company finally threw in the towel for the latest generation of the Civic, saying a lack of fueling infrastructure had convinced the company it could spend those resources better on other aspects of the Civic.

Today, there are roughly 950 natural-gas filling stations throughout the U.S. that are open to the public.

EDITOR'S NOTE: An earlier version of this story said that the U.S. had only 500 publicly accessible natural-gas fueling stations, but as reader "Carney3" points out, the correct number is 950 per the U.S. Department of Energy. We have updated the story and apologize for the error.

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