Honda cars and Questar natural gas getting into high gear

Implications: Clifford Krauss reported in the August 30 issue of the New York Times that drivers in Utah pay the equivalent of 87 cents/gallon for transportation fuel. Utah is the first state in the U.S. with broad consumer interest in compressed natural gas (CNG) cars but Oklahoma is catching up. Drivers search for used (CNG) cars at auctions and on the internet. Fuel stations in Utah are running low on pressure. The rush to (CNG) began when gasoline reached $3.25/gallon. The Civic GX is the only (CNG) vehicle made by a major manufacturer (Honda). Advocates see the switch as a sign that natural gas could become the transportation fuel of the future. Questar Gas, a public utility, has 21 filling stations around the state and also operates compressed natural gas pumps open to the public. Questar estimates that there are 6,000 (CNG) vehicles in the state with several hundred more added each month. Questar began using this fuel in company vehicles in the 1980s.

Analysis:  Questar Corporation began its career with the humble name of Mountain Fuel Supply Company. It had several lines of business in its early years including the manufacture of bricks but discontinued them as it concentrated on its oil and gas business. The company was an early pioneer in the development of tight gas sands in the Rocky Mountain region. Today it has proved natural gas reserves approaching 2 trillion cubic feet with excellent exploratory prospects in the Uinta basin in Utah, the Haynesville shale play in northwest Louisiana, the Bakken shale in North Dakota, the Woodford shale in Western Oklahoma and importantly, the Pinedale Anticline in Wyoming. Honda Motors has a functioning CNG vehicle with research and development costs behind it. It can ramp up production to meet demand which looks to grow fast. This trend calls into question the vast sums that General motors, Ford, Chrysler and others are dedicating to hybrids and all-electric vehicles. The cost difference between a Honda Civic GX and the forthcoming Chevrolet Volt has to be of the order of several thousand dollars. What happens if the spread of CNG vehicles is so fast that the still-experimental Volt never gets a chance? Industrial revolutions have a way of rapidly overtaking obsolete economic models which could certainly include the internal combustion engine powered by liquid fuels.