LNG Makes Low Inroads into Auto Markets, Report Claims
The motor industry appears slow to realize the potential of cheap shale gas to power natural gas vehicles (NGVs), a report from a leading commercial analysts finds.
Lux Research, a US research firm for business, predicts there will be millions more NGVs in world markets by 2020 - but that this is a modest figure compared to what could be possible. The automotive sector appears to be "struggling" to capitalize on cheap gas, much of it from shale deposits, it says. Such gas has transformed the energy picture in the US.
There are around 15 million NGVs on the road across the globe, according to industry estimates, such as National Gas Vehicles America (NGVA).
Lux analysts built a market forecast model to predict NGV sales in the seven key markets that account for 75% of vehicles on the road today: the US, Europe, China, India, Brazil, Russia, and Japan.
Lead author of the report, Shale Takes on Automotive: The Future of Natural Gas Vehicles, is Andrew Soare. His team found that a key influencer of the issue was fuel price, and the differential between cheaper unconventional gas sources and the cost of oil or more expensive energies. However, NGV vehicles come at a higher upfront cost.
"Gas-to-liquid (GTL) efforts are ramping, a range of alternative fuel innovators are scaling processes to convert methane, while natural gas vehicles (NGVs) number over 15 million today, replacing 1.5% of the global vehicle fleet," Soare says in the introduction to the report.
India and China, with the largest populations in the world, are top markets, but have low penetration, at only around 1% in each. In 2015, the two nations will occupy the top two spots of the seven nations surveyed – China with sales of 540,000 and India with sales of 250,000, Soare's report says.