Alternative Energy Exploration Team, Knox Western

26 October 2010

Usage of Natural Gas is Likely to Increase in Auto Industry

Executive Summary:
The U.S. auto industry is likely to continue their switch to natural gas in the next 24 to 36
months. As new legislation from Congress as well as state governments regulating emissions,
auto companies will increasingly migrate to cleaner cars powered by natural gas.. Also, natural
gas vehicles will likely continue to increase in numbers due to the U.S. ambition of less
dependency on foreign oil. With a abundance natural gas, the U.S. now has an opportunity to do
so.

Discussion:

The low cost of natural gas and greener

emissions is grabbing the attention of
companies that consist of fleets of vehicles.1
Recently AT&T as well as Verizon
announced that they will be switching their
fleet from regular gas to natural gas.2
AT&T’s ten-year deal will replace 15,000
gasoline-powered vehicles to natural gas
powered.3 Verizon introduced 300 new
natural gas powered vans aiding in their
mission to reduce the companies carbon foot
print.4 As the world goes green, companies
all over the U.S. are transferring their
vehicles from gasoline to natural gas.5 This graph refers to the amount heavy
trucks powered by natural gas increases
Two of the major markets for natural gas are over time Source:
the garbage truck companies and transit http://tinyurl.com/2bcv54c
buses. Today transit busses account for 66%
of all natural gas powered vehicles operating in the U.S. while garbage trucks account for 26%.6
Cities are transferring their fleets to natural gas to save cost over a period of time as well as
keeping the air clean.7 The time will come where there will be a boom for personally owned
vehicles to switch to natural gas; however the infrastructure is not there yet.8 “We’re listening to
our fleet customers and dealers about offering options that help them achieve their business
objectives,” said Brian Small, general manager of GM’s fleet and commercial operations, in a
release.9

A proposal under state Rep. Stan Saylor (R-York), the House Republican Policy Committee
chairman, illustrates a transition of the state's 16,000 vehicle feet to run on natural gas instead of
gasoline, while also providing tax breaks for private businesses to do the same with their
vehicles. As noted by Rep. Saylor on the topic of natural gas in vehicles “We have a lot of
trucking companies that are based out of Pennsylvania, so this is an opportunity for that to
happen. We will be working with the federal government in their programs to provide those
incentives."10

Analytic Confidence
Source Reliability: High
Analytic Confidence: The analyst's confidence is in the high range. The analyst's knowledge
base on this topic is moderate though the sources are very reliable with virtually no
conflictions between them.
1
http://www.pittsburghlive.com/x/pittsburghtrib/news/s_700571.html
2
http://www.tulsaworld.com/news/article.aspx?subjectid=298&articleid=20100810_298_0_ATTInc582515
3
http://www.tulsaworld.com/news/article.aspx?subjectid=298&articleid=20100810_298_0_ATTInc582515
4
http://www.fiercetelecom.com/press_releases/verizon-shifting-gears-greener-truck-fleet-through-contract-riverside-
county-company
5
http://www.shorelineareanews.com/2010/07/garbage-companies-switching-to-natural.html
6
http://www.investingdaily.com/tes/17859/investing-in-natural-gas-vehicles.html
7
http://www.pittsburghlive.com/x/pittsburghtrib/news/s_700571.html
8
http://www.investingdaily.com/tes/17859/investing-in-natural-gas-vehicles.html
9
http://www.dailymarkets.com/stock/2010/07/02/emergent-natural-gas-market-improves-us-fleet-vehicles/
10
http://www.paindependent.com/todays_news/detail/house-republicans-plan-55-million-stimulus-for-natural-gas-demand