NPC Study Emphasizes Significant Opportunities for Natural Gas Vehicles

Washington, D.C. – Developing the market for natural gas vehicles enhances our energy security, our competitiveness, and encourages the expansion of transportation fueling infrastructure and technologic advances. The American Gas Association (AGA) today applauded the release of the National Petroleum Council (NPC) study, Advanced Technology for America’s Transportation Future, which discusses the opportunities and challenges facing future use of natural gas as a transportation fuel. The study’s findings demonstrate a viable spot for both light and heavy-duty natural gas vehicles (NGVs) in both retail and fleet markets.

“NGVs are a proven way to improve air quality, while reducing the United States’ dependence on foreign oil, and we are pleased to see the NPC highlight the many benefits this fuel can bring to the transportation sector,” said AGA President and CEO Dave McCurdy. “The economics are in favor of NGVs, and we should take advantage of the opportunities that exist to help meet America’s transportation needs today.”

In the coming days, the Obama Administration will make a final ruling on fuel economy and greenhouse gas regulations that will guide automakers’ product plans until the middle of the next decade. McCurdy was president and CEO of the Alliance of Automobile Manufacturers and was instrumental in developing the historic agreement to increased mandatory fuel economy to 35.5 miles per gallon for cars and light-duty trucks by model year 2016 and created a blueprint for bringing together government and industry for a common purpose.

The NPC study highlights several factors that demonstrate the positive role natural gas can have in the future. “The potential for a long-term and low-cost domestic supply of natural gas, supported by significant economically recoverable shale gas resources, presents an opportunity for the increased use of natural gas as a transportation fuel, replacing some part of the current requirements for oil in transportation: gasoline in light duty applications and diesel fuel in heavy duty vehicle,” it states.

The study says that conditions already exist that will help ensure that NGVs can be an important part of America’s transportation future. Citing the Energy Information Administration (EIA)’s Annual Energy Outlook 2010, which estimated technically recoverable shale gas resources at 368 trillion cubic feet, it explains, “If this expansion in reserve base evidenced in recent years continues to result in sustainable long term and stable price advantages relative to petroleum fuels, there are economic incentives for increased use of natural gas in the transportation sector. The natural gas fuel price differential advantage over gasoline and diesel is already significant. The EIA suggests that this gap between gasoline/diesel and natural gas may widen further through 2035.”

The low price of natural gas compared to gasoline or diesel can in itself drive greater use of this alternative fuel. With fuel costs making up 40 percent of the total costs of class 8 combination trucks such as tractor trailers and dump trucks, the savings from switching to natural gas are substantial and can offset the initial cost hurdle of a natural gas engine within just a few years of operation.

For more information or to access the study, visit the National Petroleum website.