Who killed the natural gas car?

GM EV1

From 1996 to 1999, General Motors invested and developed the EV1, the first mass-produced and purpose-designed electric vehicle by a major automaker.

The EV1 was inspired in part by the eventual California Air Resources Board (“CARB”) 1990 rule that each of the U.S.’s seven largest carmakers would be required to make 2% of its fleet emission-free by 1998, 5% by 2001, and 10% by 2003, in order to continue to sell cars in California. However, long story short, GM determined that the EV1 was not economically feasible.  Subsequently, GM and an alliance of automakers litigated the CARB zero emission regulation which resulting in a rewrite of the regulation that permitted the automakers to avoid zero-emission objectives and produce other low emission vehicles like natural gas vehicles (“NGV”), and hybrid cars. The EV1 program was scrapped along with most of the EV1 cars which were repossessed. The majority were crushed and a few were distributed to museums under the agreement they would never be driven.

The EV1 story inspired the 2006 documentary film “Who Killed the Electric Car?” which explores the development, limited commercialization, and scrapping of the Ev1 program. The film explores the various reasons why the program was scrapped, and looks at various parties that might have “killed” the program.

The bottom line – and hindsight – is that GM and other U.S. automakers failed to recognize the opportunity in front of them. They scrapped the EV1, missed the hybrid opportunity (which Toyota and others captured) and never really pushed a NGV. Instead GM started producing the Hummer for American consumers. And even now with the abundance of natural gas in North America, and increasing pressures to reduce carbon emissions, U.S. automakers are reluctant to support NGVs.

While many in and out of the natural gas industry are looking to natural gas as a viable “bridge fuel” that can provide lower carbon energy for electric power generation and transportation, the automakers are not biting. And despite natural gas vehicles being produced and marketed worldwide by all major manufacturers, U.S. manufacturers doubt a natural gas car is feasible in North America. Their primary reason is convenience. There are simply not enough natural gas filling stations to make NGV attractive to the average consumer. That may have been true once upon a time. Today compress natural gas (“CNG”) are more abundant and growing on at a steady pace with aggressive expansion by companies like Clean Energy which have a strong presence in densely populated states like California.

So why is it that U.S. automakers can produce and market a natural gas vehicle in internationally but not in the U.S. or Canada? North American auto makers do provide NGV for commercial fleet customers. Its an easier decision for many of these customers as they have central filling stations on their own sites. U.S. automakers continue to see NGVs a niche market in North America. In fact in last at the 2010 CERA Week Conference natural gas and its opportunity as a bridge fuel to reduce emissions and reduce dependence on foreign oil, automakers were noticeably quiet.

John Viera, Director of Sustainability & Environmental Policy at Ford Motor Company told the CERA Week conference; “We see natural gas vehicles remaining a niche market.” And that may be true unless consumers are prepared to be more active in their filling practices. Something that will be very difficult to change.

Jeffrey Jacobs, vice president of Chevron Technology Ventures, said natural gas-powered cars made sense in some regions. Mr. Jacobs is quoted: “Natural gas is not a good fit. We don’t see a significant penetration beyond that we have now.”

Auto-makers in North America focusing on squeezing more efficiency out of internal combustion engines, for example by reducing vehicle weigh, or moving toward zero- or near-zero emission electric or hydrogen cars.

So who killed the natural gas car? Well, its not dead. Its just being quietly used by commercial fleet owners that see the many advantages that natural gas offers in fuel efficiency, lower fuel costs and lower carbon emissions. And this market has the opportunity to expand usage with more commercial fleets, government (municipal, provincial, state) fleets, 18-wheelers, etc using more natural gas. If this happens, would fuel providers make natural gas more available in order to compete and service these customers? You bet. In time – and with more filling stations – perhaps the average consumer would recognize the improved convenience of natural gas. (Its also worth noting some of the advancements – mostly outside North America – being made with home filling stations. In Canada, natural gas runs to nearly every house and building in the country).

Cheverolet Astra

And the natural gas car is certainly not dead outside of North America. Those countries  that have implemented policies that have encourage alternative fuels have established robust distribution systems. A good example is Brazil, who recognized the energy value of their abundant sugar cane resources. Still in the works, Brazil now has a robust distribution network for alternative fuels – including natural gas. North America needs to recognize the value of abundant natural gas being unlocked from shale deposits and encourage this energy source to be used more. Brazil has ~1.6 million natural gas cars on the road compared to only 150,000 in the U.S. It is also worth noting that  GM do Brasil introduced the MultiPower engine in August 2004 which was capable of using CNG, alcohol and gasoline as fuel, and it was used in the Chevrolet Astra 2.0 model 2005, aimed at the taxi market.

Its not about convenience. Its about savings. Unfortunately, consumers usually don’t change their status quo until it becomes too expensive. When oil shot to $145 / barrel in 2008, SUV and other gas guzzling vehicle sales fell. There was a new surge in hybrid sales, and manufacturers started marketing fuel efficiencies. So it can happen. With increasing oil prices, and continued pressure to reduce carbon emissions, it is possible for a natural gas vehicle market to emerge in North America.