An electric car hasn’t reached your garage, but a natural gas-fueled vehicle might

The new new thing.
The new new thing.
Image: Bloomberg/Craig Hartle
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Over the past dozen years, there’s been a 23% surge per year in the number of natural gas-fueled vehicles on the road, according to a new report by the International Energy Agency. That suggests natural gas-fueled vehicles may catch on in a way that fuel cells, hydrogen and batteries have failed.

The number of natural gas-propelled vehicles around the world increased to 16.2 million by mid-2012, up from 1.3 million in 2000. India and China’s gas-propelled vehicles totalled 2.7 million vehicles together as of mid-2012, up from 16,000 in 2000. And the International Association of Natural Gas Vehicles (IANGV), a pro-industry group, estimates that there will be 65 million natural gas-fueled vehicles on the road by 2020, a whopping growth rate of 19% per year.

The IEA thinks the IANGV numbers are optimistic, but its analysis suggests that a large-scale shift to natural gas is not impossible. The agency, for instance, forecasts that China’s use of gas in its cars, buses and trucks will more than triple to 39 billion cubic meters (bcm) a year by 2018, from 11 bcm in 2011. It foresees similar growth in the US and Latin America.

Meanwhile, electric vehicles, the latest fashion, may be turning into a cautionary tale about premature technology: Carmakers with early bets on batteries are now looking for novel ways to scrap their electric cars altogether, including offloading them via fire-sale leases. A month after the failure of Israeli battery-station startup Better Place, Tesla’s Elon Musk just embraced its basic strategy in a plan to build a corridor of battery-swapping stations between Los Angeles and San Francisco. Meanwhile, China, which sells a paltry number of electrics, is growing impatient with the pace of its carmakers’ innovations.

Whether gas-propelled vehicles will supplant electrics depend on infrastructure, such as the construction of fueling stops. According to the IEA, it can cost from $400,000 to $1.7 million to build a compressed-natural-gas filling station, and up to $4 million for an liquefied-natural-gas station. By comparison, a gasoline station costs from $50,000 to $150,000.

Yet there is incentive to make the shift: The US would like more ways to reduce its imports of foreign oil. China shares that interest, and is also motivated by the desire to clean up its often-soupy air, says the IEA.

The IEA adds that prejudices about natural gas will fade. One misunderstanding about gas, it says, concerns its flammability. Some imagine that high concentrations of pressurized gas would be seriously dangerous, but the IEA says the truth is the opposite—the ignition temperature of gas is 538 degrees centigrade, and high concentrations of gas “make it less likely for it to ignite.”

That said, to put those numbers in context, natural gas vehicles are still only 1.5% of the total global fleet. Just four countries—Argentina, Brazil, Iran and Pakistan—account for 61% of the total number on the road, or 9.8 million vehicles. It’s still early days.