The increase in domestic supplies of natural gas has raised new interest in expanding its use in the transportation sector. 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.
As natural gas supplies have increased and prices have dropped, automakers and truck manufacturers have begun taking steps to introduce new vehicle lines fueled by natural gas, principally compressed natural gas (CNG) and liquefied natural gas (LNG). Several factors have contributed to this interest:
- Price differential.
On an energy-equivalent basis, oil has been more expensive than natural gas in recent years. Moreover, while oil prices are set in a global market, natural gas prices are largely determined domestically, and the discovery of large domestic reserves suggests that prices may remain relatively low.
- Environmental preference.
Natural gas, while also a fossil fuel, generally produces lower emissions per vehicle mile than diesel and heavier oil.
- Energy diversity and security.
Increased use of domestic natural gas for transportation may mean that less oil will be imported. The world might be more insulated from global petroleum price volatility if more forms of transportation were based on natural gas.
- Growth potential.
Only 2.9% of natural gas production is currently used in transportation, mainly to move gas through the pipelines, and expanded use of natural gas vehicles would likely lead to increased demand for natural gas.
Although the comparative price advantage of natural gas over gasoline and diesel has shrunk recently as world oil prices have fallen and as domestic natural gas prices have held relatively steady, on an energy-equivalent basis, oil is still about three times as expensive as natural gas.