Email of the day (1&2)
Comment of the Day

July 25 2011

Commentary by Eoin Treacy

Email of the day (1&2)

on natural gas powered vehicles:
"It may be possible at some point in the future to connect it to one's own domestic gas supply, but it would need approval from the supplier and more importantly a powerful compressor to convert the gas into a liquid.

"When we fill up our natural gas powered VW Touran, the pump pressure is 200bar and we load up with 20kg, which fills 4 small bottles under the car.

"The price at the pump is much higher than we pay domestically, but I very much doubt the gas utilities will allow retail customers to play with connections to their network i.e. safety. For political reasons I doubt approval would be given. If it would become possible to fill up at home, it would significantly cut government's tax revenue from petrol taxes as everybody would switch to this very cheap energy source.

"In addition, natural gas powered cars are cheaper to run as the price of natural gas at the pumps is measurably lower than that for petrol and diesel, but 20Kg is approximately the equivalent of 6 gallons of petrol i.e. the usable range on Germany's autobahns is less than 200Km. So before we set off, we always plan our filling up spots, as the supply network is still very patchy in Germany. In Italy and France it is virtually non existent as they prefer the cheaper & heavier than air "camping gas" solution. Hope this helps."


"In Australia most if not all taxis run on Natural Gas (as we also have local supplies). In the early 00s many people in outer suburbs who drove a lot converted their petrol vehicles to natural gas also, to gain pricing benefits ( and of course a cleaner burn)... Typically a natural gas fuelled car will run 200,000 kms before you even consider scrapping it.

"In the video the loss of space in the boot/trunk is highlighted, and this is also a problem with the vehicles we have here. This suggests to me that the car companies continue to view this configuration as an experiment, rather than a core product, for surely they would address this issue otherwise.

"When we consider the long, slow, comfortable journeys that are undertaken by the 'grey nomads' (senior citizens 'on the road'), who, as we know, are a growing proportion of the polity, this type of vehicle, assuming rational NtGas pricing and taxation, should become a growth product. So some brave manufacturer will bring out a 'category killer' design in due course - but we haven't seen it yet!"

Eoin Treacy's view Thank you both for these informative emails contributed in the spirit Empowerment Through Knowledge. An attendee at the talk I gave to the Canadian Society of Technical Analysts in Vancouver earlier this month told me how the VW Touran CNG vehicle is also available in Brazil where it runs on gasoline, ethanol or CNG.

A 15-litre scuba diving bottle can hold compressed air up to around 200 bars. Compressed natural gas fuel tanks for a car are therefore not under much more pressure than that. However, as the review posted on Friday pointed out, home refuelling takes approximately six hours. Compressors also tend to be quite noisy which may be an additional concern.

When gas is transported over long distances it is held as a liquid at atmospheric pressure but cooled to very low temperatures. The CNG one puts in one's car is still a gas. LPG (butane/propane) comes as a liquid. This explanation on Yahoo answers may be of interest.

Home refuelling is definitely an option in the USA. This pdf from Eon argues that German customers are more interested in having a public filling station than a home based solution.

At present natural gas vehicles are treated favourably by the tax authorities because they offer a lower cost alternative to oil and are less polluting. Voters have been sympathetic to the green lobby so this favourable treatment is likely to continue for a while longer. However, we cannot rule out the possibility that higher taxes will be levied on the fuel at some point in the future.

I commented on the price of natural gas in Melbourne on return from Australia in Comment of the Day on May 13th and agree that it offers an attractive prospect for private transport.

Natural gas infrastructure development remains on a long-term growth trajectory for all the reasons discussed previously. Clean Energy Fuels Corp, 40% owned by T.Boone Pickens, rallied impressively from the $12 area two weeks ago and a sustained move below that level would be required to question scope for some additional upside.

Fiat Industrial is developing a CNG freight vehicle in conjunction with Chrysler. The former's share rallied impressively from the July 11th low and has now broken the progression of lower highs. The medium-term upside can be given the benefit of the doubt provided it finds support above €8 on a pullback. (Also see Comment of the Day on February 11th.

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