On Wednesday, the National Petroleum Council (NPC) issued an extensive (1,300+ page) report on the future of transportation fuels, which focuses mostly on on-road motor vehicles through 2050. Over 300 transportation and environmental experts worked on the report.
Many of the report’s findings and analysis suggest that NGVs will play a much larger role in the coming years. NPC reports that, “natural gas fueled vehicles could play a significant role in both LD and HD fleets if the cost differential between natural gas and oil persists and natural gas vehicle (NGV) costs significantly decrease through increased production scale.” The NPC emphasizes that the figures included in the report are not projections or forecasts but represent scenarios of potential future market penetration. Given those caveats, under the report’s aggressive case, NGVs capture as much as 50 percent market share of the light-duty market, upwards of 35 percent of the class 3–6 truck market, and almost 50 percent of the class 7–8 truck market by 2050. These figures represent the upper bounds presented in the study and are predicated on high oil prices and technological advancements. Light-duty vehicle sales percentages for natural gas vehicles include significant variability, gaining a low of 17 percent of new sales in 2020 and 19 percent in 2050, to a high of 68 percent in 2020 and 60 percent in 2050.
The NPC report includes a separate chapter devoted exclusively to natural gas with a discussion of the current state of technology and the necessary developments that must take place in the coming years to achieve the levels of market penetration presented in the study. One of the key factors repeatedly highlighted in the report that favors natural gas is its presumed low-cost and excellent economics relative to gasoline and diesel fuel in the time frames evaluated. The future scenarios presented in the report also assume aggressive advancements in technology and substantial transition hurdles are overcome. In the case of NGVs, this means that automakers make necessary investments in developing light-duty (LD) and heavy-duty (HD) natural gas engines and vehicle systems, and that natural gas engines benefit from and adapt to technological advancements being made with gasoline and diesel engines. It also means that substantial investments in natural gas fueling infrastructure are made. Under the aggressive case, mass production of natural gas vehicles in both LD and HD applications leads to economies of scale, lower priced vehicles, and improved overall economics, making natural gas vehicles much more economically attractive.
Some of the other key insights or findings regarding NGVs:
- The potential for a long-term and low-cost domestic supply of natural gas, driven by economically recoverable shale gas resources, may provide an economic driver for the increased use of natural gas for transportation.
- There is an opportunity for LD and HD natural gas vehicles to become attractive to both retail and fleet consumers.
- There are few technological barriers to market entry and expansion for either LD or HD natural gas vehicles. Technological developments can be used to extend the performance and economics of NGVs through improved fuel economy and lower cost.
- When all fuel-vehicle systems compete (“All In”), CNGVs have the highest share of any alternative fuel-vehicle system with a share similar to that of conventional ICEs. CNGVs have a fuel cost advantage that results in lower operating costs and a higher share except under the Low Oil Price case assumptions.
- Build-out of infrastructure is critical to support the increased use of natural gas. Infrastructure build-out for HD vehicles is more cost effective than the development of wide-scale retail infrastructure.
- It appears that the price premium associated with natural gas trucks can close substantially, especially if fuel storage were optimized.
- In the integrated analysis, alternative fuels accounted for 20 percent to 90 percent of the LD plus MD/HD energy demand in 2050. In most cases, natural gas is the largest contributor to alternative energy demand, followed by biofuels.
- The use of RNG (renewable natural gas) leverages the existing natural gas network to distribute or deliver a renewable fuel. RNG can offer significant greenhouse gas (GHG) reductions when compared to diesel, gasoline, and fossil natural gas.
Another important finding is that the scenarios are not dependent on “disruptive” improvements but rather on “aggressive” improvements. An example of a disruptive improvement discussed in the report for NGVs would be the development of technology that allows for the storage of natural gas at higher densities and lower pressure. The advantage of such systems for NGVs would be lower costs, increased storage densities, and therefore, increased driving range, improving the overall advantages of natural gas relative to other fuels. Such developments would allow for even more pronounced market advancements for the technologies evaluated.
To view the full report and accompany analysis, go to http://www.npc.org/FTF-80112.html. The Natural Gas Vehicle section of the report is a well researched and balanced assessment of the state and future of NGVs and should be required reading for all interested in the NGV market (http://www.npc.org/FTF-report-080112/Natural_Gas_Analysis-080112.pdf). For more information, contact Jeff Clarke at 202.824.7364 or jclarke@NGVAmerica.org.