Cars running on natural gas - not electric hybrids - are the future

A Honda Civic running on natural gas

Natural gas vehicles are the future for the auto industry, not the much hyped electric hybrids. The U.S. has more than enough of shale gas for at least 100 years, and there is plenty of it elsewhere in the world, too. The good news is that the gas can also be used as a cheap transportation fuel: 

As America finds more reserves of natural gas, the auto industry is sure to take notice.

Natural gas got a strong vote of confidence as a future vehicle fuel at the Society of Automotive Analysts Strategic Planning Summit in Southfield, Mich. last week.

New methods of extracting the gas are one of the biggest changes affecting the auto industry in years, General Motors chief economist Mustafa Mohatarem said.

"The U. S. now has a 100-year supply of natural gas," he said. "I'd make a bet it's the next big transportation fuel. The price is so much lower than gasoline -- people will find a way to use it."

The idea got a second from John Casesa, senior managing director of investment banking at Guggenheim Partners. "We're also very high on natural gas," he said. "It's a massive change for the United States, and probably a big deal for the motor industry."

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Natural gas is already a big thing in the commercial truck market. Firms operating big fleets are switching to natural gas vehicles in order to save fuel costs. When car manufacturers are able to offer decently priced passenger cars running on natural gas, they will find buyers, who appreciate the low fuel costs: 

Honda used the cleaner-emissions pitch when its Civic GX came on the U.S. market in 1998, says Brad Johnson, corporate fleet director with Pacific Honda in San Diego. Now, he says, buyers seem more interested in saving at the pump and using a fuel produced in the U.S. Honda is also promoting the fact that CNG vehicles can drive in high-occupancy-vehicle lanes on California freeways.

Even though consumers are slow to adopt natural-gas passenger vehicles, at least a few gas retailers are optimistic that if they build it, drivers will come.

Love's Travel Stops & Country Stores, of Oklahoma City, plans to open 10 retail outlets with CNG pumps this summer, thanks to a partnership with Chesapeake Energy.

And Kwik Trip Inc., an operator of gas stations and convenience stores, opened its first CNG station aimed at passenger-car drivers in La Crosse, Wis., this spring, with plans for several more.

"It's attractive to customers because it's a domestic product, there's a steady supply, and the price is right," says John McHugh, Kwik Trip's communications manager. "If we can offer the consumer a value, we know people will jump on the bandwagon."

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