USA, San Francisco
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| CVEF Chairman, Brian Stokes, welcomes delegates to the San Franciso conference |
CVEF Conference Report – Day One
After more than eight years of intense lobbying from the natural gas vehicle (NGV) industry, the recent successes of the US Energy and Highway Bills, are ‘just the beginning’ for the industry, with much hard work ahead in capitalizing on the Bills and building on the successes with future legislation. This was the recurring message from speakers today at the Clean Vehicle Education Foundation (CVEF) ‘Strategies for Sustainability’ conference in San Francisco. The Bills, which potentially create more than $US1 Billion in incentives for the industry and end users, also create a tremendous workload for stakeholders, with several complex factors still to be resolved.
Stakeholders have welcomed the workload however, recognizing the prospects for the industry both now and in the future. Opening the conference, CVEF Chairman, Brian Stokes, said that the Bills, coupled with record high crude oil prices, create an opportunity for OEMs to reconsider earlier decisions to withdraw NGV product from the market. He said it was up to the NGV industry, however, to help prove demand to the OEMs in order to justify the return to production, citing a prospective order of 300 vehicles for San Francisco city as one example of proactive industry action.
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| Honda says natural gas vehicles are the ‘best’ in the hierarchy of energy choices |
While other light vehicle OEMs have withdrawn from the market, Honda meanwhile has stepped up its NGV profile, most recently with the launch of the Honda Civic GX and ‘Phill’ home refueler to the consumer market in California. The vehicle/infrastructure combination is part of a larger ‘Good, Better, Best, Ultimate’ Hydrogen pathway that Honda has mapped out. Natural gas vehicles hold the ‘Best’ position on the pathway, ahead of hybrids at Better and one step behind Ultimate, which is held by hydrogen fuel cells. Gunnar Lindstrom (Senior Manager, Alternative Fuels Sales & Marketing) of Honda America, told NGV Global that Honda sees commercial viability of hydrogen fuel cell vehicles as being at least 15-20 years away. He also said that, regardless of the fate of fuel cell vehicles, natural gas vehicles will have a significant role in the US transport mix.
Conversions meanwhile are expected to fill the gap in light and medium duty vehicles. Natural Gas Vehicle Coalition (NGVC) legal counsel, Gil Sperling, told conference delegates that the NGVC interpretation of the Bills include converted vehicles in the incentive programs. Heavy duty natural gas vehicles are also expected to increase via a combination of OEM and converted product.
Cost Benefits Improving
Despite large increases in natural gas prices recently, increases in crude pricing and the increased cost of meeting emissions standards for diesel vehicles, are expected to reverse the price disadvantage currently experienced by some heavy duty vehicle owners. Discussing the recently released TIAX report, ‘Comparative Costs of 2010 Heavy-Duty Diesel and Natural Gas Technologies’, Mike Jackson (Sr Director of Transportation Technology, TIAX) outlined the methodology of the study which concluded that, depending on the application, natural gas vehicles have a distinct cost advantage over diesel vehicles so long as crude oil remains above $31 per barrel (See report details here). While natural gas pricing is also subject to fluctuations, the study factored in these fluctuations and conclusions were based on price differentials between the two fuels. Significantly, the study was concluded prior to the Energy and Highway Bill incentives, which will be introduced in the coming years.
Policy & Product
Panel discussions provided some lively interaction in afternoon sessions, one addressing the role of Government policy in developing NGV markets and another addressing the transition from research and development to deployment of natural gas engines for OEMs.
While the government policy discussion didn’t produce any specific recommendations, all panelists agreed that policy must always be developed with a long-term view. The 5-6 year time frame of many of the components of the recent Energy and Highway Bills was generally accepted as a minimum period for a policy to provide certainty, both for industry stakeholders and for vehicle owners to commit to NGVs.
With the deployment panel well represented by heavy vehicle manufacturers, the message was that the changing marketplace is providing food for thought for manufacturers to consider increasing emphasis on natural gas engines. While the often heard ‘show me the orders and we’ll build the trucks’ message was repeated, many who have adopted a ‘wait and see’ position up until now are revisiting this position in anticipation of increasing demand.
Significantly, one OEM representative reluctantly compared the transition of diesel to natural gas engines to the transition from steam to internal combustion engines. While he acknowledged that ‘we are not there yet’ the analogy provided an indication of how seriously natural gas vehicles are now being considered.
The message was clear though, that industry support would be needed to ensure that vehicle and refuelling needs were well coordinated to ensure painless integration for fleet operators.
NGV Global will provide a report on the concluding day of the conference in next week’s issue.
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