Tesla + Cheap Oil Killed Natural Gas Dreams

Natural Gas can't compete with Tesla

SEP 4 2017 BY STEVEN LOVEDAY 57

Tesla Model 3

Tesla Model 3

Natural gas as a vehicle fuel was one of the first seemingly foolproof and viable ideas to rid U.S. dependency on oil in place of the plentiful, renewable, and cleaner resource.

Natural gas gained attention and appeal, especially in 2008, when oil prices jumped to record highs. Ideas of utilizing it for all government and heavy-duty trucks were proposed to the Obama administration and it looked as though there was forward movement. Many automakers began making a handful of natural gas models, but interest faded quickly. This is not much different than what we are seeing today surrounding hydrogen fuel cell vehicles (FCVs).

Tesla

The Tesla Model S And X

So, what happened? Why not jump to this fuel source and get the infrastructure in place? If it’s cleaner, cheaper, and readily available, one would think that it would be a go.

There are many answers to these questions as there are regarding FCVs. Some are obvious, while some require a much more long-winded explanation. In the end, however, aside from the fact that oil prices plummeted, Tesla and the electric car revolution is the primary reason.

According to Bloomberg, Tesla’s ~455,000 Model 3 reservations is over 20 times the number of natural gas vehicles that were on U.S. roads in 2015. Not to mention all of the cars Tesla has already sold in the U.S. and every other competing EV out there – which numbers just under 600,000 through August of 2017 (see full list of all sales made in the Us by month and model here).

If anyone were to assume that EVs may suffer the same fate as natural gas, we are clearly already way ahead of the curve. Now, as for FCVs, there are many marked parallels to that of natural gas vehicles.

Clean Energy Fuels CEO, Andrew Littlefair, told Bloomberg he’s not sure America is prepared for the widespread adoption of passenger natural gas vehicles. The infrastructure just isn’t there and no one is willing to make it happen. However, he did add:

“There are a lot of reasons it would make sense to look at that again, but I don’t know that I’m ready to say that’s going to happen.”

Tesla Superchargers

Tesla vehicles Supercharging

Tesla is forever expanding its proprietary Supercharger network, along with continually adding destination chargers.  The company has actually gone so far as to say there may be future potential for sharing it with other automakers. This is not unlike Tesla open-sourcing its patents. The Silicon Valley automaker is ready and willing to do whatever it takes to assure the widespread adoption of pure-electric vehicles, which also means the infrastructure to go with it.  For the other OEMs, they rely on a hodgepodge of individual and charging network providers, but under a couple common DC fast charging standards (CCS & CHAdeMO).

Today, natural gas costs about the same as the diesel-gallon-equivalent. However, beyond having almost no infrastructure, the vehicles themselves cost astronomically more. Electric vehicles admittedly cost more than their ICE counterparts, but not very much more, and when factoring in savings at the pump and almost zero maintenance, the gap is closing. Bloomberg New Energy Finance analyst, Salim Morsy, shared:

“Gasoline and diesel are undoubtedly the cheapest in total cost of ownership, but as technology improves and batteries get cheaper,”  the number of electric cars will at least double.

Since 2008, the number of EVs in the U.S. has exploded, and Tesla is now manufacturing its third model since 2012 (the Tesla Model 3) and just about every other major automaker has some sort of plug-in offering, and is working on all-electric models for the near future.

Natural gas will likely never catch on, especially as a passenger car fuel. The success of FCVs is still to be seen, but companies have slowed interest, infrastructure is just about non-existent, the vehicles or expensive, and EVs are simply significantly more practical and efficient. Once battery costs drop just a bit more, which is inevitable, the electric car will have significantly cheaper overall lifetime ownership costs than any other vehicle choice. Once we see a larger decrease in battery costs — with which comes longer range — EVs may be cheaper than gas cars at the point of purchase.

Source: Bloomberg

Categories: Tesla

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57 Comments on "Tesla + Cheap Oil Killed Natural Gas Dreams"

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I haven’t even read all of the article yet, and I can say with confidence that this is complete BS! Natrual gas as a fuel for cars, trucks and buses has been proposed and around for over 40 years and it has never caught on primarily because of the requirement for large heavy fuel tanks to hold the fuel at high pressure. Nothing to do with EVs. NG does not eliminate the issue of CO2 greenhouse gas either.

Exactly. It has found use in fleets with certain driving patterns, but as a general fuel it just isn’t very good. It has made more sense in some countries where gasoline and diesel are heavily taxed, and this is OK because it improves air quality a lot (especially against diesel). But even in those countries, use is typically limited to fleets, taxis, and the like.

In Argentina I run CNG since 2002 on my car, my new car also has CNG. The kit costs 1100usd installed and you get the ROI in less than a year if you drive like me. The cost per km is 1/4 the cost of running on fuel. 200km of range but there are fuel station all across the country, I think there is no place in the country I can’t reach. Every single taxi runs on CNG here

Iran and Pakistan are similar. Iran especially has made a giant push into NGV, making the logical conclusion they get all the nat gas they can handle coming out of the ground with oil drilling and they can export the oil more easily than they can export gas.

If I understand correctly, VW makes a large number of dual fuel natural gas or gasoline (or ethanol as it were) that can flip over to gasoline if necessary and have 1 tank of CNG and one gas. These are used in various countries.

Nat gas is a very clever solution in a free market. unfortunately big regulations and subsidies cartels oppose it behind closed doors and only regulate for very costly solutions like batteries and deficient charging infrastructure with 3 to 4 different charging incompatible protocols.

I, too, suspect that lobbying by Big Oil is part of the reason we haven’t replaced diesel with natural gas, for our trucking industry if nothing else. Sure, Big Oil sells the natural gas too, but the cost for diesel is higher, and so their profits are higher on that.

If it were not for Big Oil’s opposition, there might well have been a real push by the federal government to mandate that all truck stops larger than a certain size would have to offer at least one pump dispensing natural gas. That would be quite similar to how a government mandate provided the necessary first step to replacing leaded gasoline with unleaded at gas stations.

I think that there’s revisionism and wishful thinking.

It’s simply a combination of wealth, status quo and cost. Diesel and gasoline infrastructure are already in place (and in some places in the USA there’s currently no piped natural gas available), the cost savings don’t have the same utility value in the USA compared to countries with less wealth and lower cost of living and without economies of scale natural gas trucking fleets won’t see any significant cost savings. That’s _after_ fracking emerged to allow natural gas prices to diverge from petroleum.

Now, thanks to hybrids, plug-in hybrids and BEVs, it’ll be really hard to get the investment required to establish CNG as a major fuel. Even in countries like Argentina where CNG vehicles are popular, they’re still a small percentage of the fleet (15% for Argentina).

To add to the difficulty of promotion of CNG, falling costs in batteries and renewable electricity points policy-makers to supporting battery-based transportation and the use of NG in electricity.

You nailed it. Here’s a pretty good article (parts 1 and 2 are also good):
http://www.ccjdigital.com/natural-gas-fighting-for-marketshare-against-cheap-diesel-other-alternatives/

“Big oil” conspiracies are ironic in this case, since the #1 proponent of NG trucking in the US was the famous and very well-connection oilman T. Boone Pickens.

Trucks are using CNG, Picken’s Clean Energy is one of the companies providing it at truck stops.

I was always curious why propane hasn’t taken off as fuel. It’s in liquid form at about 100 PSI in room temperature, and natural boil would work fine. Colder than -40F could have a heater that boil the liquid. Infrastructure is your local K-mart in a pinch (5 gallon) or some gas stations (hundreds of gallons).

It’s frequently used for indoor combustion vehicles. Basically that means forklifts and Zambonis.

It works pretty well. Maybe it isn’t plentiful enough to replace gasoline?

I think you are right. Current production seem to be just on by-product basis, which requires large storage tanks for on/off nature of such production. Unfortunately, I don’t think there’s any research into making it directly, either from fossil fuel or using renewables.

It’s a shame, though. As a range extender, propane is far more effective than H FC. It’s even better than gasoline since it doesn’t go stale over time like gasoline, and doesn’t emit nearly as much poison.

Personally, I’ll be converting my riding mower and generator to run on propane when I get less lazy.

Yeah, the problem there is volume. There just isn’t enough propane production to replace either gasoline or diesel. Otherwise, propane would work just fine as a replacement for diesel, or perhaps even both gasoline and diesel.

Propane or LPG has taken off as car fuel in some parts of the world – Italy, Netherlands, much of Eastern Europe.

Conversion kit, tank and maintenance costs extra money though, and takes space in trunk. The savings are not that great without driving a lot of miles and some favorite LPG taxation compared to gasoline.

LPG is liquid and only couple of hundred PSI (vs 3600 PSI for CNG). Why would it take trunk space instead of replacing the gas tank?

As for maintenance, it seems there’d be less with propane. There’s no oil contamination due to clean burning, no fuel pump, high “octane” rating, no need for catalytic converter, etc. If the vehicle was not made for propane, I can see the additional cost for conversion, but why would the maintenance would be more?

In 1973, I bought a new GMC Jimmy i.e. Chevy Blazer) for $4k, and had it converted to LPG-only for $1k. Kept it 17 years, never had to change oil (but it needed a quart of low-ash oil every 3K miles) & you could read a newspaper through the oil– talk about clean! It passed the 1975 CA smog regs without cat-conv, but lost 10% on MPG due to less BTU/gal. Only had 200 mi range, but tank replaced the gas tank Great car experience.

Thanks for sharing! Your experience is kind of what I thought. Lower MPG is probably the biggest drawback in terms of marketing. But given that LPG is cheaper per gallon than gasoline, cost is probably similar.

It’s unfortunate that there aren’t Volt/i3 running on LPG. I think that’s better fuel than gasoline since the engine doesn’t have to run for many people. It’d also be disincentive to “fuel up” and always run the engine since propane isn’t as readily available as gasoline.

DME can be used like LPG, it can be produced in what ever quantities the market wants.

I think you’re dealing with both the pressure and fairly low energy density. The more C atoms per molecule, the more energy density. Three Cs is not a lot compared to more complex hydrocarbons that are liquids at room temperature.

Couple of hundred PSI is no big deal as you can see from dozens of propane tanks at Walmart. Energy density is less than gasoline, but even if it’s half for same tank size, you’re talking easily over 200 miles. As a range extender for ~100 miles EV, combined could give over 300 miles, plenty for most people.

But as mentioned by others, there’s a lack of supply if adopted wider.

Propane is heavier than air, where NatGas is lighter. That makes propane much more dangerous since you can be standing in a pool of it and not realize until you ignite it.

Gasoline is heavier than air, yet we seem to distribute that without problems.

OH man you’re disputing this point? Small leaks in a Natural Gas system are inconsequential, whereas small propane leaks will blow up a house.

OH man, you have no idea that propane is used in almost all rural homes and farms and indoor vehicles? My house is powered by propane, so are all my neighbors. No one’s blown up.

Propane forklifts and others are used indoors, yet they haven’t blown up the factory.

If anything, small leak in 3600 PSI CNG tank will blow up much worse than propane tank.

I bet where the Fork Lifts are stored – they have gas detectors near the floor.

Thanks, but I’ll take my info from the National Fire Protection Association, since about every other year around here there is a house explosion – and 19 times out of 20 the house had no methane but did have LPG.

Gasoline is a liquid but will dispurse if a gas.

Propane (or LPG) after leaking is no longer a liquid, but a gas but the key difference is it will not dispurse.

Only a dim bulb would compare liquid gasoline to leaking LPG vaporized gas.

There are plenty of natural gas trucks and buses in operation in the world. Some 24 millions vehicles of all kinds last year. It isn’t going to replace all diesel and gasoline engines any times soon, and CNG for cars is almost dead in the US specifically, but “never caught on” is a bit of stretch. For some applications heavy tank isn’t a showstopper, and vehicles return to base for refueling every night anyway.

Tesla and loony Musk worshipers have nothing to do with it.

Well, I had a CNG Honda in New Zealand in 1981 & several more over ensuing years. Gas tanks are heavier than petrol/diesel ones, yes but CNG/LPG has been successful in NZ & OZ for decades. Truth is the USA has always been under the boots of Big Oil & resistant to new ideas- until that man Musk!

Or you could go with CNG biogas like we do in Sweden. You can often choose between 50% mix of biogas and natural gas or 100% biogas Which is completely Co2 neutral. Just whit natualgas alone you get a 35% Co2 and a lot less Nox, its not prefect but my VW Golf can get 350km on CNG and also have a full tank of gas.

HUH?

Did I miss something. When was the big push for lots of NG in cars.?

Trucks yes. Power plants yes. Cars no.

Remember the Pickens plan? Oil tycoon T Boone Pickens wanted to blanket the Midwest with wind turbines to free up the natural gas for automotive use. Sounded like a good plan, but never really got traction for some reason.

His plan targeted more specifically long haul trucks. His argument is that trucks use 2 million barrels per day of oil all by themselves. His company Clean Energy Fuels has in fact increased substantially the use of CNG and LNG trucks and laid down a great deal of infrastructure including at interstate truck stops. Has his natural gas superhighway come into full realization? No, but it has come a very long way. Now in garbage trucks and buses and vehicles like that diesel is losing massive market share. Yes we discuss the EV and hybrid aspects here on this site but these vehicles partly due to Pickens have really shifted wholesale away from diesel to natural gas more so than electric. Now as electric becomes more viably priced the competition seems to be intensifying.

Interestingly the same thing that would launch EV higher would do the same for LNG/CNG. A $50/barrel import tax on oil would get both formats over the hump.

Tom is right. The Pickens Plan was to replace diesel, not gasoline, with natural gas. Or at least, the plan was to start with heavy trucks and natural gas. Dunno where T. Boone Pickens envisioned his plan going eventually.

The first post in this discussion, by Roy H, says that the reason natural gas never caught on for passenger cars is because of a requirement for heavy high-pressure fuel tanks. But assuming that’s true, it’s not much of a barrier for heavy trucks.

There are also far fewer truck stops than gas stations. It just makes sense all around to start with heavy trucks. Cars can come later… or hopefully not at all, since hopefully we’ll see gasmobiles replaced by plug-in EVs!

Yeah, he almost single handedly dropped wind turbine prices 30%. He backed out of his 1 – 2 GW wind farm in west Texas and left GE with a boatload of turbines to dump on the market. They had already pocked the deposit money on the turbines.

I saw his plan as backwards the wind for 100% electricity and CNG as 100% transport.

What makes more sense is 100% electric transport. Wind as the major grid electricity, since it is easy to scale and high availability/predictability at night when electric cars need to recharge. Rooftop solar to reduce grid infrastructure requirements and peak shave against HVAC use. Natural Gas to fill the troughs with 100% availability. And a sprinkle of battery storage to balance between them.

But costs will have to drive the solution, because cheap almost always wins in the energy world.

Since when is natural gas renewable? Yes, if you use biomass to generate the methane it kind of is, but we don’t have enough biomass to convert much of our transportation needs. It inevitably will fall back on paleo carbon to meet our needs.

Energy Wind in Europe is using CO2 from a water treatment plant with H2 using wind power to make methane for the natural gas pipes.

There are 25 million NGVs Worldwide and it’s neither dead nor dying.
As usual China is the #1 with 5 million vehicles followed by Iran with 4 million and India a tad above 3 million. What is best about these vehicles is they are high mileage vehicles like Buses, Trucks which displace lot of Diesel.

http://www.iangv.org/current-ngv-stats/

First of all, Oil prices crashed from $120 to $50 because of this 25 million NGVs, another 25 million LPG vehicles, 50 million Flex-fuel vehicles, 10 million Hybrids, 2 million Plugins.

And all these AFV’s continue to grow creating more pain for Oil.

If NG is dead in USA, it does not mean it’s dead worldwide.

There are over 1 billion motor vehicles around the world. The number of vehicles is growing rapidly. If there are 25 million NG vehicles it’s not making any significant dent.

The mileage for CNG vehicles tend to be much higher than for your regular petrol vehicle (taxis e.g.)

Actually Natgas is used in Transport indirectly.

Natgas is used in drilling rigs in the place of Diesel.
Natgas is used as refinery furnace fuel instead of usual LPG.
Natgas is also used as feedstock / diluent to blend with fuel oil to produce more motor fuels.

But all this natgas is clubbed and represented as oil instead of natgas.

Besides lot of Methanol (1 carbon alcohol) is blended with gasoline as M15 / M85 and used in China.

https://www.eia.gov/todayinenergy/detail.php?id=30072

Nat gas is biggest electricity generating source in CA. That makes it power lots of EV that use public electricity, such as DCFC and those without home solar.

While I agree about passenger cars, I don’t agree in general with the final conclusion.

There are natural gas tankers (ships) and locomotives now. We have natural gas buses. And I think we’ll see natural gas semi tractors too, at least in some areas.

Natural gas will continue to increase because it’s cleaner than Diesel. And with fracking it’s cost-effective too.

But yes, natural gas passenger cars like the Civic GX are done for. They, like flex-fuel ethanol (E85) vehicles are on the way out. Both were driving partially by incentives and with those gone there isn’t a lot of reason left for them.

As another note, remember when it used to seem so wild that Brazil used alcohol in their cars? That seemed less strange, then even tame. Now it seems retro.

Anyone want to tell the story of Biodiesel too? Is it over, because of the excesses of VW or simply because it never made much sense anyway?

Germany is starting to Produce more biogas (cng) and in Sweden there is alot of goverment/taxi cars that is CNG. 100% biogas is on the rise and quite alot of different cars to choose from here in sweden at least. VW dont allow biodiesel but, Citroen and peugeot does.

Re biodiesel: There is a basic economic problem with biofuels, as any EROI (Energy Return On Investment) analysis will show. Ideally, nature should provide all the energy in a fuel; human endeavor and industry should have to provide none of it. Of course, in the real world, that ideal can’t be reached. But in the early days, petroleum was so easy and cheap to find that the EROI on gasoline was about 100:1. That is, 99% of the energy in gasoline was provided by Mother Nature, with man having to supply only 1%. Even after that initial glut ran out, gasoline had an EROI of about 20:1. These days, with the easy to drill oil mostly gone, and more expensive extraction/refining methods necessary for such sources as tar sands, the average EROI has fallen to about 10:1, at least for gasoline and diesel produced in the USA. (The infographic linked below puts “conventional oil” at 16:1; presumably that’s for light sweet crude only.) But that’s still considerably better than biodiesel. The infographic linked below puts “biodiesel from soy” at 5.5:1, and biodiesel from other sources is reported to be little if any better than bottom-of-the-barrel corn ethanol, which that same… Read more »

The EROEI for Biodiesel which is 5.5 : 1 will remain the same or increase, but for Oil, it will keep shrinking as we start drilling deeper and deeper.

BTW for Ethanol its 2.7 : 1 and that’s why the Ethanol production is increasing rapidly.
Its averaging 1 million b/d which is very high.

https://www.eia.gov/dnav/pet/pet_pnp_wprode_s1_w.htm

Anyway we are not going to wait that longer as the electric transport accelerates.

HPR bio synthetic diesel from Neste can be used 100% without modifications.

That’s a very simplified view. There’s more to producing fuels for vehicles than energy required. The kind of energy required and where it comes from (sun or diesel?) is more important.

In the end, it’s the technological/economical decision, not EROI.

Keep track of all the energy used to survey, explore, drill, pump, pipe, transport and refine oil. The energy and capital required are significant.

http://www.lngworldshipping.com/news/view,mapping-the-worlds-lngfuelled-fleet_45473.htm

There are 88 LNG powered ships worldwide with many more on order.

Yup. In fact the majority of new cruise ships built after 2022 will be LNG powered. The freight industry is moving in that direction too.

The article claims: “Why not jump to this fuel source and get the infrastructure in place? If it’s cleaner, cheaper, and readily available, one would think that it would be a go. “…aside from the fact that oil prices plummeted, Tesla and the electric car revolution is the primary reason.” The primary reason? At best this is a whopping overstatement. It may be that Tesla kicking off the EV revolution with the Roadster in 2008 was a tiny contributing factor to the failure of natural gas to displace gasoline and diesel, but it certainly wasn’t the primary reason, by a very wide margin. T. Boone Pickens proposed his “Pickens Plan” to use natural gas to replace diesel for heavy trucks back in 2008. That made lots of sense then, and it makes lots of sense now. Even with the price of diesel falling to $2.50 per gallon (the exact price one month ago), using natural gas to fuel our trucking fleets would be far cheaper. That would benefit almost everyone, for two reasons: 1. Using a cheaper fuel would bring down shipping prices, which would bring down the price of everything that’s shipped by truck. The overall effect would be… Read more »

GM today sells “Dual Fuel” Silverados, as well as Impalas, and also a Natural Gas only TRAX.

Years ago, I would have strongly consided them for my garage had there been a decent, inexpensive reliable 3600 psi compressor for home refueling.

The chemical industry is working on ANG (Adaptive Natural Gas) vehicles that use activated charcoal storage tanks to store a larger volume of Fuel at much lower (900 PSI pressures). If successful, this will allow many more tank shapes conforming to the existing vehicle real estate, and should greatly improve the range of the vehicle; as well as much cheaper, reliable home compression..

Time will tell as to availability and cost.

Lots of older V8 American cars run on LPG over in the UK,There are quite a few Ford F-150 trucks using LPG in our classic car club. It’s around half the price of petrol (I fueled up this morning here and the price for a UK gallon was £5.26 / $6.81)

If only they’d stop trying to push “clean” hydrogen fuel cells (powered by H2 made from CH4, of course) and just run that natural gas directly in a fuel cell.
Skip the middle man and the greenwashing. You can have your fuel cell if you really want, without losing half of the energy by converting it back and forth to H2.

It would have been more honest, but what people wanted to hear was that there was a way to maintain their current usage of vehicles (i.e. a trip to a fuel station every week or so) that could eventually be gotten to avoid carbon completely. The car and oil companies wanted to stall, and that “eventually” was the magic word.

I remember in the 1990’s there was talks of natural gas powered cars. But based of off of the information I have seen over the years I really don’t think the natural gas companies were that trilled about selling natural gas or due to the huge demand from power and other sources the natural gas companies felt there was no need toe promote natural gas powered cars.

tesla kills nothing. The amount of cars that they sold is insignificant.