Makers Plan Broad Range of NGVs

A consortium of North American energy producers plans to showcase half a dozen natural-gas-powered vehicles, including a BMW 3 SUV and a Ford Mustang coupe, in an effort to drum up interest in use of the fuel in passenger cars.

America's Natural Gas Alliance, a trade group representing more than two dozen North American oil and gas companies, is planning to demonstrate "bi-fuel" versions of popular vehicles retrofitted to run on compressed natural gas, or CNG, and use a conventional gasoline tank to extend their range, according to officials. The group declined to provide further details ahead of its marketing campaign.

The trade group will preview those test vehicles on Tuesday at a Southern California Gas Co. facility in Los Angeles and then launch a broader public-awareness campaign next month, officials said. Converted vehicles from Ford Motor Co., Chrysler Group LLC and four other manufacturers are expected to be part of the Alliance's lineup.

Chrysler, which now offers a natural-gas-powered pickup inspired by the shale-gas boom, said it has no plans to make a passenger-car conversion available. Auto makers have been focusing on battery- and diesel-powered passenger vehicles and have been reluctant to add another energy source. A BMW spokesman said, "We are not currently involved in natural-gas vehicles," and Ford said it isn't involved in the Alliance's project, nor does it plan to produce a conversion kit for Mustang.

These "bi-fuel" vehicles cost thousands of dollars more than gasoline-powered vehicles. Advocates say low natural-gas prices can make up the difference over time. CNG costs between $2.20 and $2.50 a gallon-equivalent, below the average pump price for unleaded gasoline. But conversions aren't cheap: General Motors Co., which began selling a pair of bi-fuel CNG pickups in December, prices them at about $11,000 more than gasoline versions.

The gas-industry group says the demonstration is designed to spur consumer and auto makers' interest in CNG-powered cars at a time when surging gas production has dramatically lowered prices. That has spurred a renewed drive by gas producers and auto makers to make the fuel a more attractive substitute for gasoline.

"We hope the excitement created by these vehicles encourages policy makers to take notice," said Anne Shen Smith, CEO of Southern California Gas.

Some commercial vehicles, including corporate fleets and heavy trucks, are already using or experimenting with natural gas. One advantage for these large-scale users over retail buyers is that they can afford to build and maintain their own refueling stations. While more than 100,000 CNG vehicles are being driven in the U.S., just under 600 stations are open to the public.
Gas producers hope that by showcasing the CNG-retrofitted vehicles they can spark fresh interest. Auto-industry analysts remain skeptical manufacturers will rush into the market, no matter how low natural-gas prices fall.

"You can't dedicate a vehicle to this fuel until you've got natural-gas pumps almost as ubiquitous as gasoline pumps," said Phil Gott, senior director at IHS Automotive.

To help resolve that dearth in natural-gas fueling stations, two leading gas producers have joined forces with home-appliance manufacturers in separate bids to develop affordable refueling equipment that plugs into household gas lines. In December, Encana Corp., North America's third largest natural-gas producer, linked up with Whirlpool Corp. and four U.S. utilities. Similarly, ​ CHK is working with General Electric Co.

Gas company officials say major auto makers are paying close attention to these efforts and are readying conceptual models that may serve as trial balloons for future mass-market vehicles. "You will see over the next year or two, probably less than a year, some concepts of natural-gas [passenger] cars," Eric Marsh, executive president at Encana, said in an interview.

This article was first published by Wall Street Journal.

Home page feature image by Chester Dawson/The Wall Street Journal.

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