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Congressional Research Service (CRS)

 

Natural Gas for Cars and Trucks: Options and Challenges

Bill Canis, Specialist in Industrial Organization and Business

Robert Pirog, Specialist in Energy Economics

Brent D. Yacobucci, Section Research Manager

November 19, 2014

http://fas.org/sgp/crs/misc/R43791.pdf

[full-text, 27 pages]

 

Summary

The increase in domestic supplies of natural gas has raised new interest in expanding its use in the

transportation sector. This report considers issues related to wider use of natural gas as a fuel in

passenger cars and commercial vehicles.

 

The attractiveness of natural gas as a vehicle fuel is premised in large part on its low price (on an

energy-equivalent basis) compared to gasoline and diesel fuel. When prices for gasoline and

diesel are relatively low or natural gas prices are relatively high, natural-gas-based fuels lose

much of their price advantage. While natural gas has other benefits—such as producing lower

emissions than gasoline and diesel and protecting users of transportation fuels from the volatility

of the international oil market—it is largely the cost advantage, if any, that will determine the

future attractiveness of natural gas vehicles.

 

There are a number of technology pathways that could lead to greater use of natural gas in

transportation. Some require pressurized systems to use natural gas in a gaseous state, and others

convert natural gas to a liquid. Two of the most widely discussed options use compressed natural

gas (CNG) and liquefied natural gas (LNG). Other technological approaches use liquefied

petroleum gas (LPG), propane, and hydrogen. In addition, natural gas can be used to generate

electricity to power electric vehicles.

 

Increasing the use of natural gas to fuel vehicles would require creation of an extensive

nationwide refueling infrastructure. Although a small number of CNG vehicles have been on U.S.

roads for more than 20 years, CNG use has been limited to vehicles that return to a central garage

for refueling each day, such as refuse trucks, short-haul trucks, and city buses. LNG, on the other

hand, requires large insulated tanks to keep the liquefied gas at a very low temperature and is

therefore seen as more suitable for long-haul trucks. In both cases, the limited availability of

refueling stations has limited the distances and routes these vehicles may travel.

 

Congress has taken a strong interest in spurring production and use of natural gas vehicles.

Legislation has been introduced on a wide range of proposals that would equalize the tax

treatment of LNG and diesel fuels, provide tax credits for natural gas vehicles and refueling

equipment, require the production of vehicles that could run on several different fuels (such as

gasoline and CNG), increase federal research and development on natural gas vehicle tank and

fuel line technologies, and revise vehicle emission regulations to encourage manufacturers to

produce more CNG passenger cars.

 

Legislation pending in the 113th Congress includes proposals that would extend expired tax

credits for refueling property and fuel cell vehicles (S. 2260), authorize the use of energy savings

performance contracts to support the use of natural gas and electric vehicles (S. 761), and require

the U.S. Postal Service to study the feasibility of using natural gas and propane in long-haul

trucks (S. 1486)

 

Contents

Introduction ...................................................................................................................................... 1

Change in U.S. Natural Gas Supply ................................................................................................ 1

Vehicle Technologies Using Natural Gas......................................................................................... 3

Compressed Natural Gas ........................................................................................................... 3

Liquefied Natural Gas ............................................................................................................... 5

Methanol .................................................................................................................................... 6

Propane Autogas ........................................................................................................................ 7

Other Natural Gas Fuels ............................................................................................................ 8

Natural-Gas-Based Electricity ................................................................................................... 9

Prospects for Growth ..................................................................................................................... 10

Refueling Network .................................................................................................................. 10

Cars and CNG ................................................................................................................... 10

Trucks and LNG ................................................................................................................ 11

Methanol ........................................................................................................................... 13

Propane Autogas ................................................................................................................ 13

Hydrogen Fuel Cell Vehicles ............................................................................................. 14

Electric Vehicles ................................................................................................................ 14

Vehicle Conversions ................................................................................................................ 14

Emissions and Fuel Economy ........................................................................................................ 15

Air Emissions .......................................................................................................................... 15

Fuel Economy and Greenhouse Gas Standards ....................................................................... 16

Existing Federal and State Programs ............................................................................................. 17

Federal Programs ..................................................................................................................... 17

Energy Policy Act of 1992 ................................................................................................ 17

Advanced Technology Vehicle Manufacturing Program ................................................... 17

CMAQ ............................................................................................................................... 17

ARPA-E ............................................................................................................................. 18

Clean Cities Program ........................................................................................................ 18

State Programs ......................................................................................................................... 18

Congressional Involvement ........................................................................................................... 19

Tax Policy ................................................................................................................................ 20

Other Federal Legislation ........................................................................................................ 21

 

Figures

Figure 1. U.S. Natural Gas Production ............................................................................................ 2

Figure 2. Retail Diesel and Natural Gas Price Trends ..................................................................... 3

Figure 3. Cross-Section of a CNG Vehicle ...................................................................................... 4

Figure 4. CNG Refueling Stations ................................................................................................. 11

Figure 5. LNG Refueling Stations ................................................................................................. 13

 

Tables

Table 1. Tax Provisions Affecting Natural Gas Vehicles ............................................................... 21

 

Contacts

Author Contact Information........................................................................................................... 23

Acknowledgments ......................................................................................................................... 23

 

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