ENERGY HUNT; 11,000 cars now run on a new fuel: compressed natural gas

"Fill'er up with CNG." That is a motorist's refrain at some petrol stations in New Zealand, which is trying out an alternative fuel for cars -- compressed natural gas (CNG).

Some 60 independent petrol stations have been selling CNG for the past year. And now Caltex, a subsidiary of Texaco and Standard Oil of California, is planning to spend $23 million to pump the fuel at 50 or 60 of its 600 outlets. Caltex's managing director, William C. Dunning, expects that at least 200 cars a day will be serviced by 1983, most fitted with both CNG and conventional gasoline tanks.

There are good reasons for New Zealanders to buy CNG. It sells for about 32 cents a liter ($1.23 a gallon), compared with 58 cents a liter ($2.23 a gallon) for gasoline. And automobiles get twice the distance on pollution- free CNG, Mr. Dunning says. "Drivers can expect a reduction in maintenance costs," he adds, "since it extends the life of the spark plugs and is easier on the engine." He also says CNG is safer than gasoline.

Despite these advantages, New Zealanders have been slow to switch to the fuel. Prof. Ray Meyer, dean of engineering at the University of Auckland, points out that until recently there were limits as to the extent of the gas distribution, which inhibited conversions.

"It's been sort of a chicken and egg situation," says Dunning. Gasoline retailers have been hesitant to invest in compressor pumps and other equipment until demand for CNG increased. New Zealanders, meanwhile, have balked at investing $1,200 for CNG equipment for their cars, because they haven't been sure the fuel would be available.

Many of the 60 stations that sold CNG hid it in the back of the station instead of pumping it out front with other gas. Large fleet operators (such as cab companies) have shown the greatest interest in CNG, largely because the government provides a 25 percent cash grant to convert. In addition, the operators can write off the remaining 75 percent of their investment cost in the first year of operation.In the case of individuals, the government gives a $200 cash rebate to compensate for an import tax on the equipment.

According to Energy Minister Birch, about 1,000 cars a month are converting to CNG. The governmnet's goal is to convert 150,000 cars by 1985. About 11,000 cars now burn CNG.