The Role of NGVs in Oil Displacement

Digg This Story

Making inroads in the diesel fuel market will be especially challenging. While there has been some effort to use ethanol as a substitute for diesel fuel, it is expected that ethanol will be used almost exclusively as a gasoline substitute.

Biodiesel can be used when blended in low percentages with petroleum diesel. However, because of engine and production limitations, it is expected that biodiesel could displace no more than 2 or 3 billion gallons of the 50 billion gallons of diesel fuel expected to be used in 2017. This is a real problem because America’s economy is dependent on our commercial fleets, and those fleets are currently dependent on the availability of affordable diesel fuel.

Fortunately, there is an affordable and available diesel substitute for America’s medium- and heavy-duty fleets: natural gas. Today, natural gas vehicles (NGVs) are displacing the equivalent of 200 million gallons of petroleum in the U.S. By 2017 this could grow to 10 billion gallons per year with the proper government support, representing almost one-third of the President’s goal. While significant, even this amount of fuel would represent only 6 percent of the natural gas used in America last year. Moreover, if properly supported, a significant portion of this demand could be fuel produced domestically from biomethane sources such as landfills, animal waste, sewage, crop waste, and cellulosic and non-cellulosic crops.

NGVs offer performance as good, or better, than comparable gasoline or diesel vehicles and are commercially available and in use today. In fact, NGVs are one of the fastest growing alternatives to gasoline and diesel vehicles in the world. In the U.S., the primary NGV strategy has been to pursue the high-fuel-use, urban fleet market – transit and school buses, trash trucks, urban delivery vehicles, port and airport vehicles, and taxis. While these vehicles make up a small percentage of the vehicles on the road, they use a disproportionately large amount of petroleum.

The U.S. Energy Information Agency (EIA) forecasts that, in a business-as-usual scenario, natural gas use in vehicles will double by 2017. This is clearly an underestimate since natural gas use has doubled in just the past two years alone, and growth is expected to continue at least at that pace. But, depending on the level of policy and other support from federal, state, and local governments, growth could be substantially greater...to 3, 5, 7 or even 10 billion gallons per year. The number of diesel fueled vehicles that must switch to natural gas in order to achieve these scenarios is modest, ranging from just 800,000 vehicles for 3 billion gallons of displacement to 2,750,000 vehicles for the 10 billion gallons.

Over the last several years, incentives have helped shift the economics in favor of NGVs. However, growth in NGV use could accelerate substantially if the federal government were to implement policies and programs to encourage that significant growth. This includes extending and expanding federal financial incentives for the purchase and use of NGVs, making NGVs a prominent part of the national oil displacement strategy, raising the priority of NGVs in the programs of federal agencies, and providing incentives for the production and use of biomethane.

Other countries have placed a priority on a vibrant NGV market and the results have been remarkable. With these policy changes, NGVs could make a remarkable impact in the U.S., too.

Rich Kolodziej is president of NGVAmerica, a national organization that encourages the development of a growing and sustainable market for natural gas and hydrogen vehicles.