North America lags in gas-driven vehicles

Nov. 29, 2012 at 2:40 PM
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BOULDER, Colo., Nov. 29 (UPI) -- Despite advances in finding new energy sources, including shale oil and natural gas, North America is trailing in natural gas as an alternative vehicle fuel, conclusions of a study indicate

North America's vastness and the difficulty of distributing natural gas refueling stops across the territory of both Canada and the United States is a major hurdle.

But a general tardiness in adopting or switching to natural gas as an alternative to diesel or gasoline is also playing a part in North America's expected underperformance in this area.

Asia's emerging economies, in contrast, are embracing natural gas as the next ecologically friendly fuel for driving new vehicles.

The global market for light-duty natural gas vehicles, which produce fewer greenhouse gas emissions than conventional gasoline engines and which run on fuel that is much cheaper than gasoline, varies significantly from region to region.

Markets in Europe and Latin America struggle with developing refueling infrastructures fast enough to meet the needs of both consumers and fleets, the adoption of NGVs is still growing rapidly.

The Asia Pacific region is quickly becoming the world's largest market for NGVs, thanks to strong growth in markets including China, India and Thailand, Pike Research reports.

Aside from the lack of refueling stations, the report blames an "absence of government incentives for purchasers and low consumer awareness of NGVs."

The two factors "will keep the North American market to just a fraction of the total world market," says the report.

Although North American sales of NGVs are set to grow at "a healthy" 10.2 percent compound annual growth rate from 2012-19, annual sales in the region will reach only 37,000 by the end of that period.

That is just more than 1 percent of the world market, which is expected to reach 3.2 million in annual sales in that year, the study said.

"Sales of NGVs will grow strongly in the next several years in North America but the market is starting from a very small base of about 16,000 vehicles a year," senior research analyst Dave Hurst said.

The lack of a refueling networks and government incentives is to blame for the lack of growth, research indicates.

As in Europe and parts of Asia Pacific, the growing infrastructure for NGVs in North America remains focused on servicing fleet customers, a trend also seen in Europe and parts of Asia. However, NGVs present an opportunity in both passenger car and light-duty truck markets, the report says.

Pike Research specializes in clean technology markets and in July joined Navigant's global Energy Practice.

Meanwhile, Chesapeake Energy subsidiary Peake Fuel Solutions revealed what it says is a cost-saving diesel natural gas conversion kit for heavy-duty trucks.

It said the conversion kit will help heavy-duty truck operators save up to 30 percent on their fuel costs.

DNG allows trucks to run on a mixture of diesel and up to 70 percent clean, affordable, abundant, American natural gas. When compressed natural gas or liquefied natural gas fuels aren't available, trucks retain the ability to run on 100 percent diesel.

"The trucking industry is the backbone of our nation's economy, and Peake Fuel Solutions' DNG technology can help the industry slash its biggest cost -- fuel," said Kent Wilkinson, Chesapeake's vice president for natural gas ventures.

Chesapeake Energy Corp., which has headquarters in Oklahoma City, is the second-largest producer of natural gas in the United States.

As shale production in the United States continues at a rapid pace, 77 percent of U.S. oil and gas chief financial officers expect the domestic supply of oil to increase in 2013, says the 2013 BDO Energy Outlook Survey.

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