Report: Natural gas vehicles may be 2 percent of market in 2025 - Clarksburg, Morgantown: News, Sports, Weather

Report: Natural gas vehicles may be 2 percent of market in 2025

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At the most optimistic level of adoption of natural gas vehicles, they would make up just 2 percent of the market for natural gas in 2025.

The report "Driving on Natural Gas: Fuel Price and Demand Scenarios for Natural Gas Vehicles to 2025," released April 11 by the American Clean Skies Foundation, used three scenarios to calculate potential natural gas demand and price impacts attributable to natural gas vehicles, or NGVs.

"We found that the estimated level of natural gas demand from NGVs, even under the most optimistic scenario, accounted for only about 2 percent of the overall market by 2025," said ACSF CEO and report co-author Gregory C. Staple. "And the incremental rise in (natural gas) prices for this high growth scenario was only approximately 25 cents per (million British thermal units), or 5 percent."

All factors considered, that would raise the price of natural gas to about $5.74/million British thermal units, up from the mid-$3/mmBtu range now. Figures are in 2011 dollars.

Retail prices for compressed natural gas, or CNG, and liquefied natural gas, or LNG, would remain attractive compared to diesel and gasoline even if natural gas prices increase significantly, the report's authors found.

Currently, about 20 percent of the retail CNG price is attributable to the raw natural gas cost. Even if natural gas prices were to double from $4/MMBtu to $8/MMBtu — higher than the $5.74 projected in the analysis — the commodity component of retail CNG prices would be only about 40 percent, and CNG would cost about $2.20 per gallon of gasoline equivalent.

The use of natural gas vehicles is expected to grow slowly enough for supply and infrastructure to just about keep pace with demand, Staple said.

ACSF's optimistic growth scenario included high adoption rates of both light duty and heavy duty NGVs.

 In this scenario, the transportation sector's natural gas demand grew from 57 billion cubic feet, or Bcf, in 2013 to 711 Bcf in 2025, which amounts to roughly 2.3 percent of total demand that year.

The scenario estimated roughly 2.4 million NGVs on the road by 2025, of which 480,000 are heavy duty trucks. The effect on 2025 natural gas prices across the scenarios ranged from an additional 3 cents to 27 cents per million British thermal units.

Currently, 93 percent of country's transportation fuel is petroleum-based, the organization said in its media release, leaving the economy susceptible to oil price shocks. In the report's highest NGV growth scenario, more than 180 million barrels of petroleum fuels are displaced by natural gas in 2025 and almost 1 billion barrels of oil consumption are avoided cumulatively from 2013 to 2025.

The analysis should give consumers, regulators and political leaders confidence that a plausible transition to NGVs can achieve energy security objectives while having minimal impact on natural gas prices and competition for the fuel, said report co-author Patrick Bean.

ACSF retained Navigant Consulting, Inc. to partner in the scenario development and to conduct some of the analysis. The report includes data tables with assumptions and results.