Even oil rich Iran recognizes the importance and potential of CNG

by Marc J. Rauch

The auto channel
For years, some of us in California have laughed whenever we see trucks full of tomatoes heading south on the interstate freeways, because within minutes we inevitably see another truck loaded with tomatoes heading north. You would think that the practical thing to do would be to just leave the tomatoes farmed in the south for those living in So Cal, and to leave those tomatoes farmed in the north for the northerners.
Perhaps there are good reasons for this shell game; maybe the tomatoes ripen better in the hot sun of a long I-5 ride. Maybe it's a way to jack-up the price of the produce by claiming higher transportation costs. Whatever, no one seems to know or have an answer.

There's a similar shell game going on in America with oil and CNG (compressed natural gas) that no one in a responsible position seems to be willing or able to explain. On the one side, you have Iran, the number two OPEC oil producer, becoming the number one growing CNG market in the world; and on the other you have the United States, the world's largest user of gasoline with huge proven reserves of natural gas, virtually ignoring this cheaper domestic resource as an engine fuel.
According to information revealed at the 2nd CNG Conference and Exhibition on CNG and Related Industries, held July 26th and 27th in Tehran, Iran, there are now about 1.5 mm natural gas vehicles on the road in Iran (total population estimate of 74 mm). Comparatively, there are about 9 mm NGV (natural gas vehicles) in use around the world. Of the approximate 1 mm new vehicles sold in Iran in their last calendar year, nearly one-half are either fully natural gas powered or bi-fuel capable. There are currently close to 900 CNG filling stations in Iran. Incidentally, the promotional slogan for the Iranian trade event was "CNG is the clean and green fuel of choice."

Conversely, in America (pop. est. 305 mm), we have only about 125,000 natural gas vehicles on the road, with roughly 1,200 CNG filling facilities across the country. The only automaker selling new CNG cars in the US is Honda, and they produce a little more than 1,000 Civic GX per year.
If we had the same relative market penetration as Iran, we would have about 6 mm clean(er) burning cost-efficient CNG vehicles on the road today. If we sold the same proportion of new NGVs that Iran does we would have 20 to 30 mm on the road by 2015. Keep in mind that President Obama's great dream is to have just 1 mm electric vehicles on the road by 2015.

Remarkably, tiny Sweden, with a population of about 9.2 mm, is now selling 700 new NGVs per year for use on their roads. That's not too much less than the entire Honda US output. In Thailand, General Motors' local Chevrolet unit sold 1,060 CNG Optras in June 2009 alone (out of a total Optra sales output for June of 1,653 cars).
Meanwhile, in Europe, Fiat recently announced that six of their models will be available in CNG-powered versions. Stories of CNG success and acceptance like these can be found around the world.

So what's the deal with Iran and CNG
There are several reasons for the high reliance and acceptance of CNG in Iran, even though they are so oil rich. Primarily, these are concerns over domestic security and economic well-being. While they have no shortage of the raw black goop, they have very few oil refineries. Consequently, Iran has to import the finished fuels from Europe and other countries, and pay for it in foreign currency.
In an amazing turn-about-is-fair-play scenario, Iran could actually get cut off from much needed engine fuel if the rest of the world ever decided to take Iran's anti-social behaviour seriously. CNG production doesn't require the same refining capabilities, so they can be energy self-sufficient while concentrating on their next biggest export to the world, global terrorism.

UN-made in America
The United States shares the same energy related security and economic issues that concern Iran, but from the reverse perspective.In addition we have a more heightened concern over environmental issues. However, where Iran sought a present visible solution, we went off in an entirely different direction, in fact no direction, and with blindfolds on.
Within the last decade the three America car companies all made CNG vehicles for sale in the US. Several foreign brands also sold CNG models in this country.

An unfortunate change in government regulations de-incentivized GM, Ford, Chrysler and the others from continuing to do so and instead made it more profitable for them to make and sell large gasoline-guzzlers. CNG-powered vehicles didn't just drop off the table-of-discussion here in America, it was erased from Detroit's collective memory bank... even though each of the Detroit Three continue (to this day) to produce and sell CNG vehicles in other parts of the world.
Toyota further confused the issue earlier this year when they announced that they would be unveiling a concept CNG car for the American market at the 2009 DetroitAuto Show.

Astute investigative reporters, such as Edwin Black*, were quick to ask Toyota why they would be presenting only a concept CNG car, versus a production model, since they have already had considerable experience in producing and selling CNG vehicles around the world and in America. I seem to recall Edwin asking Toyota, "What more is there to prove?"
It's clear that many Americans want and need larger passenger vehicles, and because of the price tag of SUVs, et al, it is more profitable for automakers to build them. What's not so clear is why someone(s) in Detroit or Washington never had the vision to pair up SUVs, for example, with CNG power.

A CNG V-8 engine is as capable of moving a bloated Cadillac Escalade or Hummer down the highway at 80 MPH as a gasoline V-8. However it does so cheaper and with less harmful emissions.
As I opined in a recent editorial about what the apparent success of the "Cash For Clunkers" program demonstrates; just imagine how successful the program would be if instead of the government spending billions to incentivize the upgrade of fuel-inefficient vehicles to only marginally better fuel efficient vehicles, consumers had the opportunity to move up to much more cost effective and efficient cars and trucks.

Is CNG being swept aside by the tide of electric hysteria?
A few colleagues have suggested that the reason for Detroit and Washington's reluctance to re-introduce CNG-powered vehicles in America is because they don't want to let anything get in the way of "the electrification of America's roadways."
The problem with this hypothesis is two-fold: Firstly, this electric-vision didn't stop the Detroit Three from making and selling CNG vehicles in the rest of the world.

Second, and even more important, unless there are some big surprises about to be revealed regarding pure-electric vehicle introductions, we may be waiting a long time for an electric rescue. I've heard disappointingly long predictions from a variety of sources during the last year or so, including Ford.
Moreover, just recently PriceWaterhouseCoopers issued their analysis of an electric future and they concluded that we could be two decades away from electric passenger vehicles playing any significant role in solving our energy, transportation and environmental problems. Even if the prediction is wrong by one decade, it too long to wait and we could put a heck of a lot of CNG vehicles on the road between now and then.

In his report on the Iranian CNG expo, Brett Jarman (Executive Director of the International Association for Natural Gas Vehicles), wrote one of the most insightful comments I've ever heard regarding the reluctance to accept any alternative fuel: "Lack of infrastructure is often touted as a 'reason' not to pursue natural gas as a transport fuel yet... (this) is merely an excuse; that lack of infrastructure is solved simply by putting mechanisms in place that allow it to be created."
There's no new technology that has to be invented to put CNG to work in theUS. There's nothing that hasn't already been tested and proved. For everyday that we delay in utilizing the most available tool we have to end foreign oil addiction and oil-sponsored terrorism, we take one step closer to potential disaster.

* In "The Plan: How to Save America When the Oil Stops-or the Day Before," Edwin Black reveals startling details about the production, pricing and manipulation of the world's oil market as well as a plan for how America should prepare for and respond to an oil catastrophe.
For more information about Edwin Black and the book visit www.planforoilcrisis.com.