CNG conundrum for Oz

Compressed Natural Gas makes a lot of sense in the Australian market, says Honda's Senior Director, Lindsay Smalley. And he should know -- Honda has more than just dabbled with CNG, the gas that suppliers pipe through to your home to cook snags and heat the water for your shower.

Honda USA sells a Civic that runs cleanly on the gas. CNG is an abundant gas, particularly in Australia and Smalley says that the Civic powered by this gas feels just like the petrol version to drive. There's no effective power loss or other degradation of driveability.

Stateside the brand is so committed to rolling out CNG-powered cars that it also offers buyers a home refilling device, which can be installed in your garage, turning it into a domestic service station. You might miss the time spent standing in queue, buying chocolate bars and magazines on impulse while you wait to pay for the fuel you've just pumped into your car -- but for those who don't miss the social interaction of convenience stores, the CNG home refuelling device is ideal. It also lowers running costs and emissions.

"Every country in the world is going to face a need to find an alternative to oil and you don't need to be a PhD to understand that, but there isn't going to be one single solution," Smalley explained to the Carsales Network, outlining the broader benefits of CNG.

"There's going to be alternative fuels used, including LPG, including diesel, petrol, electric, hybrid -- and it just seems to make sense to me that Australia's so rich in natural gas that we'd start to use natural gas as an alternative.

"My understanding is that there's at least a hundred years' reserve of currently found gas in Australia, but the reserve depends on how much we export and how much we use domestically. It's a bit of an elastic number. There's huge volumes [of the gas in reserve].

"If you just look at the huge natural gas industry that Australia has and all the public information on it, there's a lot of energy out there for use."

If CNG is so beneficial in the Australian context, why is it taking so long to establish -- against LPG, for example?

"I think CNG's the chicken-and-egg type situation," Smalley responds.

"What we are seeing is that in the commercial world -- there seems to be quite a big push towards CNG. There are major fuelling stations now -- particularly in Western Australia. All of our heavy truck industry is now moving into that area.

"In Melbourne, about two months ago, the first public CNG filling station was opened -- in Aspendale -- and that means that people can fill their car up with CNG as well as the truck bowsers...

"My understanding is that that network is starting to expand nationally; there's one CNG filling station currently in Canberra, one just outside Sydney... Over time, the use of that fuel will expand -- and the fantastic thing about it is that [it's] virtually emissions-free-type motoring," Smalley opines.

Will Honda join the party, offering Aussie motorists a car to take advantage of this fuel?

"We currently don't have a product available for this market," Smalley answers.

"Honda makes the CNG Civic in left-hand drive only, in the States. But I don't think the issue is specifically Honda... Look at the tremendous amount of interest shown in electric vehicles at the moment. For [a large-scale rollout of electric vehicles] to happen, [there are] huge infrastructure requirements, the issue of using dirty energy to charge your cars, the other issue of total generation capacity in Australia -- would there be enough energy available to charge a huge fleet of electric cars? Who knows?

"So why shouldn't we be looking, strategically, at a range of options -- and not just pick one as the silver bullet for any particular market?"

There has been a view that Australia is well placed to take advantage of the country's suburban off-street parking and 240-Volt national power grid for the rapid take-up of electric vehicles, but Smalley doesn't believe that it's essentially easier to do than tweak existing CNG infrastructure for cars burning that gas.

"My estimate is that CNG would be a lot easier to implement [than the infrastructure for battery/electric vehicles], because CNG's already piped to maybe three and a half million households in Australia. There would be an option for local compression of CNG in the house to fill your car and, to actually set up a network of service stations to use CNG would be quite a small investment compared to having to build new power stations and put in all of the charging systems around the country to do it."

As for Honda, the importer would get behind CNG, but it's waiting for a sign that the government would also back the alternative fuel.

"If we were to see, from a public policy point of view, a serious consideration of CNG for motoring use, then we would explore all options. [But] We haven't had any direct discussion with [the Australian government] on that."

Smalley doesn't see it as Honda's role to promote CNG to the federal government, preferring that task be handled "More through the Federal Chamber of Automotive Industries, rather than manufacturer to government."

"I think one of the big issues there is we really need a voice of industry to look at these large-scale infrastructure directions -- rather than just one manufacturer.

"I understand [the FCAI and the government] have had some discussions on fuel strategy for the future -- a white paper was meant to come out a few months ago on the use of CNG. I'm not sure what the status of that is.

As for the CNG home refuelling device sold in the US, could Honda sell the device in Australia also?

"Highly unlikely," answers Smalley.

"There's a local manufacturer involved in the CNG industry about to launch domestic compression pumps for CNG. They're the same group that has established the public service station..."

How has that gone for Honda in the US? Are significant numbers of CNG Civic buyers taking up the option of the home refuelling device as well?

"It required a significant subsidy from the Californian government to get it into a house, so people have picked up the subsidy and are running with it. It's successful, definitely."

But Smalley admits that the home refuelling device is not selling in massive numbers. "Not a large percentage have gone pure natural gas..." he says.

One possible argument against turning your garage into a service station is that once the homeowner has outlaid money for the device, it locks the homeowner into running CNG-fuelled cars forever.

"But it's also an asset," argues Smalley, mounting what we like to think of as the cable TV proposition -- you may never subscribe, but the connection adds market appeal to your house.

"You could also see it as an asset if you are going to sell your house to have this extra feature in there," says Smalley.

Yet despite that and Honda's relatively long-term experience selling CNG cars in the US, infrastructure -- or lack of it -- continues to stifle sales, even in the green state of California.

Says Smalley: "I think one of the issues with CNG, even in California, there doesn't appear to be the public infrastructure in place -- and it does tend to limit sales a bit because of that."

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