Alt Fuels Watch: CNG Catches Fire - Saleswise - in One Southern California City
By John O'Dell May 8, 2009
By John O'Dell, Senior Editor
Is compressed natural gas catching on?
Could T. Boone Pickens -- the oil billionaire who has spent tens of millions of his own dollars promoting natural gas as a transportation fuel and alternative to gasoline -- be on to something?
(Yes, he owns a lot of natural gas and has a vested interest in selling it. That doesn't mean he can't be right.)
Will Honda end up having a last laugh as its limited-production CGN-burning Civic GX -the only factory-built compressed natural gas car still being made -- becomes the car du jour of the trendy set?
It's early days yet, but from the signs and portents department here's one CNG success story from the heart of Southern California that might hold a clue.
The City of Riverside, which owns and operates its own CNG fueling station to serve a municipal fleet of about 100 natural gas vehicles -- from trash trucks to a trio of pre-2005 Chevrolet Cavalier economy cars built by GM as bi-fuel vehicles (natural gas or gasoline) -- says business has boomed in the past year, ever since gasoline prices in the state rose to more than $4 per gallon last summer.
A lot of the additional CNG fuel being pumped at the station is for the city's increasingly large natural gas fleet as well as for the local school district's 41 CNG buses, a trash company's eight CNG refuse trucks and the natural gas vehicles for a number of other public agency fleets.
But fully a third of the nearly 70,000 gallons (actually, gasoline-gallon equivalents, which is how the pumps measure the gas) pumped monthly now is purchased by private customers.
They range from taxi owners to everyday commuters who use CNG vehicles in order to save money on fuel and, in many cases, gain access the region's carpool lanes, which permit single-occupant CNG cars under a state initiative promoting use of the very low-emissions fuel.
Overall, CNG sales at the city's single station are up about 60 percent from 2007 and 16 percent from a year ago, according to figures provided by the city's fleet operations office.
Price is the main reason, according to fleet operations manager Martin Bowman, who said he designed the five-year-old station to handle the city's needs as it weans its fleet from petroleum to other, cleaner fuels.
CNG is the only alternative fuel offered at the station now, but the city has a few electric vehicles and a handful that run on liquid petroleum gas, or LPG.
CNG at retail pumps around Southern California typically sells for about 50 cents a gallon less than gasoline, but price variations can be greater at government agencies' pumps because most pass on to their customers a 50-cents-a-gallon federal rebate that retail CNG suppliers usually keep and use for expansion.
Riverside sells its CNG for considerably less than gasoline -- the present price is $1.269 a gasoline-gallon equivalent, versus the regional average of $2.36 for a gallon of regular unleaded gas. Gas hit a high of $4.61 a gallon in the city last June, when the increase in CNG sales to private vehicle owners began in earnest.
Diesel fuel, which is what most buses and trash trucks use if they're not burning CNG or another alternative fuel, is averaging $2.38 a gallon in Riverside and got as high as $5.51 a gallon last summer.
Gas and diesel prices have been a lot lower since the recession cut into demand, but Riverside Public Utilities spokesman Austin Carter told Green Car Advisor that while traffic growth at the city's CNG pump has flattened, it hasn't diminished.
Even if gas prices don't climb as high or as rapidly as they did last summer, the city expects to see continued increases in CNG use in part because of California's groundbreaking low-carbon fuels standard that makes natural gas one of four preferred alternative fuels in the state's battle to reduce greenhouse gas emissions.
And if gas prices do soar again?
Utilities agency spokesman Carter said that would only create more demand for natural gas.
"We see a surprising upswing in calls asking about converting cars and trucks to CNG whenever gas prices go up," he said.
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(Disclaimer: Edmunds.com owns a CNG-powered Honda Civic GX as part of its long-term fleet and we use a home-based fueling unit for most of our refueling needs.)
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