It’s not that I was bored, rather bothered, finding out why CNG or LPG is such a no-brainer in Europe and seemingly not working well in the US. Above spreadsheet, current as of August 26, 2011, depicts the sorry state for CNG and LPG conversions. The bright spot is that energy, even gasoline, still is dirt cheap in the US. Imagine, if the gallon of gasoline would run you $8.25, how would America look like then (I mean outside the riots on the streets)? So, at a third of that price, the GGE margin to even cheaper energy for cars, such as CNG or LPG, becomes so irrelevant that you may have to drive more than 100,000 miles to recover a single installation or conversion. That break even point is well beyond the horizon of individual consumers, which may drive 20,000 miles per year or less on average. Don’t get me wrong, I am all in favor of CNG because it can be made from renewable resources to 100% and because it creates less GHG per energy output, but the numbers don’t work here in the US, whereas they work in Europe.

To resolve the situation, the importers need to lower the price of the conversion to European levels and the providers of CNG should consider how much more they could sell if the price would actually be pegged to natural gas (the resource) instead of gasoline (the competitor). Of course it would be nice if the EPA would get behind the CARB mission and try to facilitate with DOT the implementation by reducing the regulatory hurdles. But at this time it seems it is between the conversion installer and the vendor of the fuel there is an opportunity missed here.

This entry was posted on Friday, August 26th, 2011 at 13:14 and is filed under Biorefinery, Public Policy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.