Learn about the environmental and economic benefits of natural gas vehicles.

Natural gas vehicles (NGVs) can offer an array of economic and environmental benefits to California residents. These may include the economic benefits of a low-cost, domestic fuel, developing a market for green jobs, improving regional air quality, reducing greenhouse gas emissions, reducing our dependence on petroleum and providing a pathway to a hydrogen economy.

Environmental Benefits

Natural gas vehicles can have an immediate and positive impact on the issues of air quality, U.S. energy security and public health. Here are some key benefits of using natural gas as a transportation fuel.

NGVs are Clean

NGVs are some of the cleanest vehicles in commercial production today, and produce only 5-10 percent of the emissions allowable, even by today's most stringent standards. NGVs produce 20-30 percent less greenhouse gases than gasoline- or diesel-powered vehicles.

Overall, natural gas is one of the cleanest burning alternative fuels available today. NGVs can reduce nitrogen oxide (NOx) emissions and reactive hydrocarbons which form ground-level ozone, the principal ingredient of smog, by as much as 95 percent. NGVs can also reduce emissions of carbon dioxide by as much as 30 percent, carbon monoxide (CO) by 85 percent and carcinogenic particulate emissions by 99 percent.

Reducing Greenhouse Gas Emissions

The use of compressed natural gas (CNG) in place of gasoline or diesel can help reduce greenhouse gases.

A 2008 "well to wheels" analysis (pdf)* conducted by TIAX, LLC concludes that natural gas offers up to a 30 percent reduction in greenhouse gas (GHG) emissions for light-duty vehicles, and as much as a 23 percent reduction for medium- to heavy-duty vehicles, when compared with gasoline and diesel. The chart below shows the amount of C02 that has been displaced since 1999 by SoCalGas® customers using vehicles powered by CNG instead of diesel. In 2008 alone, that number was almost 229,000 metric tons of CO2!

Clearly, NGVs present one of the cleanest choices for today and tomorrow.

Biogas: Renewable Reducer of Emissions

Biogas is affordable renewable energy that can also help reduce greenhouse gases. It's already being used successfully in parts of Europe, and has even been put into limited use in NGVs here in California.* We're currently researching how biogas could be utilized and distributed to our customers.

Get more details from NGVAmerica* on sequestering greenhouse gases from landfills, animal waste, sewage and other sources via biomethane production. The U.S. Department of Energy’s Alternate Fuels Data Center also provides an overview of biogas benefits.*

Less Noise and Odor

The sound pressure level of a CNG engine is lower than that of a diesel engine, causing 90 percent less noise1. This makes NGVs an especially good choice in densely populated areas or for vehicles that operate at night. In addition, refueling with compressed natural gas, versus gasoline or diesel, reduces odorant and evaporative emissions.

Low Contamination Risk

CNG won't contaminate ground water. CNG refueling station owners don't have to contend with the threat of leaks from underground tanks, which is a major consideration with liquid fuels.

Pathway to Hydrogen

NGVs represent a proven technology that is available right now. The existing public refueling infrastructure in Southern California is robust and growing all the time.

It's possible that hydrogen may become the primary fuel for transportation in the U.S. at some point in the future, but use of CNG for transportation now helps create a bridge to a hydrogen future. According to the U.S. Department of Energy's National Renewable Energy Lab,* "...advancing gaseous fuel technology today can aid the transition to a future transportation network based on hydrogen fuel cells." Natural gas from existing pipelines is already the leading fuel feedstock in the production of hydrogen.

Economic Benefits

Natural Gas vs. Gasoline and Diesel

Vehicles powered by CNG offer substantial advantages over vehicles powered by gasoline. Historically, CNG has cost significantly less than a gasoline or diesel gallon equivalent at the pump in the SoCalGas service area. 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 Hybrid2

Let's take this $1 per gallon difference and compare 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.

Cost-Effectiveness

SoCalGas, along with the South Coast Air Quality Management District and the California Natural Gas Vehicle Partnership, commissioned TIAX LLC to develop a study, “Comparative Costs of 2010 Heavy-Duty Diesel and Natural Gas Technologies,” which compared 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 grants and incentives may be available from a variety of sources to help with the purchase of NGVs or the construction of CNG fueling stations.

High Performance

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 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 this 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.

America's Natural Gas Alliance (ANGA) has produced this dynamic new video explaining how companies such as AT&T, Verizon and UPS are using CNG to reduce our dependence on foreign oil.*

Growth of the Compressed Natural Gas (CNG) Market

On a global scale, the market for NGVs is enormous. Currently, there are 15 million vehicles in operation worldwide. Here in the U.S., the market for NGVs is still in the early part of the growth curve.

The chart below shows the growth in CNG consumption by customers in the SoCalGas service area from 2009 to 2013.

**Market Growth includes combined volume from both SoCalGas and SDG&E.

Additional Resources

CNG Now

CNG Now!* is an industry advocacy organization that provides up-to-date news on the CNG market, financial incentives information, legislation and more.

NGVAmerica

NGVAmerica is a national organization representing more than 100 companies that are interested in forwarding the advancement of NGVs and supporting infrastructure. NGVAmerica.org* contains an extensive amount of useful information for policymakers* in one convenient location.

NGVAmerica has published a substantial amount of information which may be helpful for policymakers on topics such as:

Sources

1INFORM Report: Greening Garbage Trucks: Trends in Alternative Fuel Use, 2002-2005*

2 Source: Based on a comparison of MPG figures published by American Honda Corporation for the 2009 Honda Insight and the 2009 Honda Civic GX.