Natural gas making a comeback?

I noticed Gwyn Morgan singing the praises of natural gas as a transportation fuel in another section of the newspaper. Oil billionaire T. Boone Pickens has been Cheerleader-in-Chief for the cause but, of course, he’s flogging stock in his company Clean Energy Fuels. Morgan, who was brilliant at EnCana, is only advocating the stuff, I presume, out of pure enlightenment.

Nevertheless, natural gas is the transportation fuel with a great future behind it. Remember when gasoline prices spiked in the early 1980s and suddenly taxi-cabs and airport limos and even private cars were converting to CNG (compressed natural gas) as fast as they could. That rush of enthusiasm resulted in more than 20,000 of them on Canadian roads and about 220 service stations to fill them up. Now there’s next to nothing left.

Shell Canada, which tediously touts its “environmental” concerns at every possible opportunity, announced just ahead of the Morgan piece that it is closing down all its CNG pumps at Canadian gas stations. Sure it’s a clean fuel. but there’s not enough money in it to interest Shell. Natural gas vehicles with their environmental benefits have stalled out in Canada even though, with the recent run-up in gasoline pricing, natural gas is now 40 per cent cheaper to use than gasoline.

But as Shell bails out, there are signs that a natural gas comeback could be in the cards.

Chrysler announced last week that it will start selling CNG vehicles by 2017; majority-owner Fiat leads the league in CNG car sales in Europe. Honda has been quietly selling about 2,000 CNG-powered Civic s a year in three U.S. states (not available in Canada) and next year will offer them in all 50 states.

CNG-powered cars are a lot cheaper than electric cars with their expensive lithium-ion batteries. Sure, the tank for compressed gas takes up nearly the whole trunk but it’s dead easy to make an internal combustion engine run on the stuff. Trucks are better than cars since there’s lots of room for that tank. Also when trucks return to base each night you can fill them up without going anywhere near a Shell station. Vancouver-based Westport Innovations does a great job of converting diesels to CNG and has switched over plenty of delivery trucks and city buses. Natural gas was a flop the last time out but that doesn’t mean it won’t have a share of our multi-fuel future.

Car-sharing a hit on Wall Street

IPO means Initial Public Offering, or if you prefer, Is Often over-Priced. Zipcar went public last week and you may reach your own conclusion.

Sharing cars is a great idea as it cuts down on the total number of vehicles on the road and the Internet makes collaborative consumption a cinch. With Zipcar, you book online and wave your chip card at the car you’ve selected and it opens right up. I find its prices expensive compared with your average Rent-a-Wreck or other supplier, but with Zipcar every vehicle has a cutesy name and how “new age” is that.

Anyway, Zipcar Inc., which has been around for 10 years and is the largest car-sharing company in North America, last week sold $174.3-million (U.S.) in stock, surpassing even its broker’s expectations.

The company has never made a dime but owns and operates an 8,000-vehicle fleet for members in 50 cities in the United States, Canada and the United Kingdom and on many college campuses. What it has is “first-mover advantage” and it has created a market from the ground up.

The idea has also caught on with some community and neighbourhood groups who are doing car-sharing on a co-operative basis. The rental car giants have also tested the waters with Hertz launching Connect by Hertz in three or four major cities. They leave the cars in parking garages rather than rental offices and offer Zipcar-like online booking and rentals by the hour.

Zipcar (ticker symbol: ZIP, Nasdaq) expected to sell 8.3 million shares at $14 to $16 a share. Instead, it sold 9.7 million shares at $18 each. When the shares opened on the first day they began trading at $29 or 61 per cent higher than the IPO price, making huge profits for insiders. Shares closed the day at $28. When I last looked, they were just above $27.

I have no idea how the stock will fare but the big launch shows that the idea of cars as a service as an alternative to car ownership is making waves.

(Source: http://www.theglobeandmail.com/globe-drive/green-driving/news-and-notes/natural-gas-making-a-comeback/article1996847/)