Natural gas costs less than gasoline and diesel
Vehicles powered by Compressed Natural Gas (CNG) offer substantial advantages over vehicles powered by gasoline. CNG usually costs significantly less than a gasoline or diesel gallon equivalent at the pump in the Southern California Gas Company's (SoCalGas) service area. In 2009, prices at the 10 SoCalGas CNG stations remained around $2 per gasoline gallon equivalent or "GGE." This is around $1 per gallon less than gasoline. The U.S. Department of Energy's Energy Information Administration* tracks historical pricing for gasoline as well as diesel.
Sources: Gasoline prices acquired from annual average of U.S. Government Energy Information Administration's Weekly California Regular Reformulated Retail gasoline prices. Diesel prices acquired from annual average of U.S. Government Energy Information Administration's Monthly California No. 2 Diesel Retail Sales. CNG prices acquired from annual average of SoCalGas monthly public CNG station prices.
Lower annual fuel cost than a gasoline hybrid 1
Let's take this $1 per gallon difference and compare driving a hybrid to an NGV both driving 15,000 miles per year. Based on an average 41 MPG, the hybrid car would burn almost 366 gallons of gasoline per year. Multiplied by $3 per gallon, the total annual fuel cost would be $1,097. Based on an average 28 MPG, the NGV would burn almost 536 gasoline gallon equivalent gallons of CNG per year. Multiplied by $2 per gallon, the total annual fuel cost would be only $1,071. If you drive more than 15,000 miles per year or if the gasoline and CNG price gap continues to increase, the savings with CNG would be greater.
Natural gas and hydrogen
Natural gas and the natural gas infrastructure could play a major role in the production of hydrogen as a transportation fuel.
TIAX LLC developed a thorough cost comparison report* (pdf) comparing 2010 year heavy-duty commercial diesel and natural gas vehicles. The financial model predicts that the break-even points for CNG for a refuse hauler, transit bus, and short haul heavy-duty truck are $22 barrel, $31 per barrel, and $28 per barrel of crude oil, respectively, in 2010 world oil prices. The world oil price per barrel* has been above $40 in most weeks since early 2005.
Significant co-funding opportunities may be available from a variety of sources to assist consumers with the purchase of NGVs or the construction of CNG fueling stations.
NGVs often deliver similar horsepower ratings to their diesel and gasoline-powered counterparts. Premium gasoline is 91 octane. Natural gas has an octane rating of approximately 130. This higher octane allows for increased engine compression and combustion efficiency. Because of the clean burning attributes of natural gas, NGVs generally have longer engine life compared to most gasoline-powered vehicles.
Secure, domestic fuel supply
Since almost all natural gas currently consumed in the U.S. is also produced in North America, NGVs help reduce our dependence on foreign oil. One prominent natural gas advocate elaborates on the impact of foreign oil in his 2009 interview* with Fortune.
In 2008, NGVs in the SoCalGas service territory displaced more than 70 million gallons of gasoline. Thanks to new exploration and production technologies, natural gas reserves in the U.S. have increased tremendously in recent years. A 2009 article* in The Wall Street Journal discussed the existence of a 100 year supply in the United States.
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1 Source: Based on a comparison of MPG figures published by American Honda Corporation for the 2009 Honda Insight and the 2009 Honda Civic GX.