Auto Energy Alternatives Down the Road

Supply precedes demand for compressed natural gas. GOING WITHOUT GASOLINE

BUYING a gasoline-fueled automobile before there were gas stations was one of those supply-will-follow-demand acts of faith. Today, supply is preceding demand when it comes to natural gas. For the equivalent of 60 to 70 cents a gallon, compressed natural gas (CNG) can be pumped at street-corner service stations in a growing number of urban locations.

Advocates of CNG-fueled vehicles believe that widespread industry and consumer demand for the clean-burning, inexpensive, auto fuel is just around the corner - especially with the increase in tough clean-air laws and the Iraqi reminder of the United States' precarious dependence on foreign oil.

``No one is demanding this,'' says Norman L. Bryan, vice president of Pacific Gas and Electric Company (PG&E), which last month opened the second of its seven planned compressed natural gas (CNG) refueling stations. But as state and federal clean air laws grow tougher, officials at the northern California utility - as well as a growing number of other CNG-fuel marketers in the United States - are positioning their companies for what they expect to be a strong demand for the low-cost, clean-burning CNG.

Only 13 public natural-gas vehicle refueling stations existed in the US in 1986, American Gas Association data show. But in urban areas, it is getting much easier for single vehicles, or fleet vehicles of companies not willing or able to invest in their own refueling stations, to drive up to a pump and fill their CNG cylinders from a high-pressure (3,000 pounds per square inch) hose.

More than 50 public stations (there are 300 private stations) were operating last year, and over a dozen more have opened this year. Most are run by state utilities.

But this month, San Diego Gas and Electric announced a joint venture in CNG refueling stations with Unical oil company. A private Denver company, Natural Fuels Corporation, operates two private refueling stations, including one with a 10-bay garage for converting vehicles to CNG and servicing them, and also supplies two Amoco service stations with natural gas.

``This is a very bold step,'' says Steve Plotkin, senior associate in energy at the Office of Technology Assessment, the analytical arm of Congress. ``They're doing this more for symbolic reasons than commercial for the moment ... but the moment could last 50 years.''

The market for CNG, which is the same fossil fuel pumped through pipes to homes for cooking and heating, remains largely an environmental dream, he says. (Vehicles powered by CNG produce 90 percent less carbon monoxide and 65 percent less ozone-forming pollutants.)

Mr. Plotkin points out that there are only about 30,000 natural-gas vehicles in the US (Italy, by comparison, has 300,000). Vehicles are not mass-produced for CNG fuel, he says, and the cost of converting them for dual gasoline/natural gas use is cost-efficient only for vehicles used for ``extremely high'' mileage. And a tank of CNG provides only about 200 miles of driving.

CNG advocates admit that the market will have to be painstakingly built.

``We're biting the bullet and putting in stations before demand in order to generate it,'' says Paul Nelson, vice president of Natural Fuels Corporation. The company expects to have a dozen street-corner service stations in operation in Colorado by the end of 1991. It is targeting commercial vehicles from ``the florist to the IBM fleet cars ... [organizations] which can't afford or don't want to build their own facility. By doing it, we begin mainstreaming the consumer,'' he says.

Pacific Gas and Electric officials ``saw enough factors in the market to sustain the use of compressed natural gas'' in automobiles, PG&E's Mr. Bryan says. The company's service-station project was launched in earnest last January when it became clear that the federal government intends to legislate ambitious clean-fuel vehicle mandates aimed at reducing urban smog and ozone pollution.

The Gulf crisis, too, after a decade of plentiful and cheap petroleum, has reminded Americans of the need for alternative fuels. After Iraq's invasion of Kuwait, Natural Fuels' Mr. Nelson says, calls tripled from consumers interested in converting their cars to CNG. (The process costs about $2,000 and simply adds natural-gas cylinders in the rear of the car. A second fuel line is connected to the engine's existing combustion system through regulated mixer equipment.)

To help boost the demand for CNG, a consortium of natural-gas industry companies - including Natural Fuels, PG&E, and San Diego Gas and Electric - has put up $1 million for General Motors Corporation to design and produce 1,000 natural-gas-burning trucks next year.

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