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Ted Simpson and his new natural gas powered Honda Civic GX at CNG filling station on April 19, 2011. Higher gasoline prices are building demand for vehicles that run on compressed natural gas, a fuel that can sell for as little as a third the price of gasoline. (Ricardo DeAratanha/Los Angeles Times/MCT)
Tuesday, May 17, 2011

Natural gas gains as fuel prices rise

LOS ANGELES – With the future of gasoline prices uncertain, cars and trucks that run on compressed natural gas – fuel that’s about half the cost of gasoline – are getting another look.

Los Angeles commercial real estate broker Ted Simpson recently snapped up a Honda that runs on CNG, which in the U.S. has been better known for powering public transit buses and delivery trucks.

“I did not want to be hostage to what I believe will be rapidly escalating oil and gasoline prices,” said Simpson, who drives hundreds of miles a week, covering a territory that ranges from San Diego in the south to Santa Barbara in the north.

He’s been able to fill up his vehicle for about $2.25 a gallon. CNG costs about $2.10 to $2.70 at Southern California filling stations.

Simpson said his Civic GX has another advantage: Natural gas vehicles, which are less polluting than conventional gasoline autos, are eligible for California carpool lane permits through January 2015.

But while demand is rising, there just aren’t many vehicles to choose from, so a growing number of consumers are purchasing Ford’s old CNG Crown Victoria and looking at retrofitting used natural gas cars, creating an aftermarket for such autos.

For the moment, Honda is the only major automaker selling natural gas passenger cars in the U.S.

Honda, which makes the CNG-powered Civic GX in Indiana, has sold a record number so far this year. Although the volume was small – 643 – it was almost triple the number sold during the same period a year earlier, and the company expects to run out of the cars this summer as it gets ready to sell a larger, redesigned version this fall.

The current version gets the equivalent of 24 miles per gallon in city driving and 36 mpg on the highway. The next-generation vehicle is expected to have better fuel economy.

Honda wants to double annual production to at least 2,000 and maybe more, depending on parts availability from earthquake-stricken Japan. The cars list for $25,490 and are sold at 139 dealers in 33 states.

Honda plans to certify more dealers to service and sell the cars this year, pushing it into more regions where there are natural gas filling stations, Honda spokesman Eric Rosenberg said.

Simpson and drivers such as Wilson Avalos, who traded in a Toyota Prius hybrid for a CNG Civic last month, didn’t have a lot of choice. Avalos bought the Civic so he can use carpool lanes for the 500 miles he drives weekly as a sales representative.

Many consumers also install home filling stations in their garages, connecting a natural gas pump to their existing gas piping. That slices the cost of the fuel to about $1.43 a gallon.

But the pump is expensive, about $6,000 for the device and installation, minus a $1,000 federal tax credit for the purchase of a natural gas vehicle home refueling system.

Ford Motor Co. Chief Executive Alan Mulally said natural gas technology hasn’t caught on domestically because automakers find it too difficult to make a cost-competitive passenger car with the type of trunk space and interior that consumers expect. Compressed gas storage takes more room in a car than conventional gasoline tanks.

“For big trucks going back and forth across the U.S. it makes a lot of sense, but it is tough to package for autos,” especially smaller cars, Mulally said.

Although they don’t currently sell natural gas passenger cars, General Motors Co. and Ford have CNG offerings in truck and cargo van segments.

Chrysler Group said recently that it planned to develop natural gas vehicles for the U.S. market.

Distributed by McClatchy-Tribune Information Services.