Interview with Richard Kolodziej (International Association for NGV)

   Richard Kolodziej, president of the International Association for Natural Gas Vehicles (IANGV) and NGVAmerica, referred to such strong support is having the natural gas and gas vehicles industry in the United States during the last time.


How would passage of the NAT GAS (New Alternative Transportation to Give Americans Solutions) bill impact U.S. gas vehicles market?


   The impact would be huge. The Nat Gas Act would extend and expand the existing federal natural gas financial incentives. Even without the incentives, NGVs are less expensive to operate. But, as we all know, they are more expensive to buy. Especially in these tough economic times, many fleets and individual consumers can’t afford to invest in vehicles that have a multi-year payback – even if it makes sense in the longer term. By providing incentives to buy NGVs, use the fuel and install NGV fueling infrastructure, the Nat Gas Act would significantly change the economics of NGVs and substantially accelerate the growth of the market.


What are the implications of AT&T decision to implement the largest CNG vehicle conversion plan in U.S. history? Is there another company planning initiatives of this magnitude at local level?


   There are hundreds of fleet in the U.S. operating NGVs, no fleet has moved this far this fast.  The AT&T decision to convert up to 8.000 vehicles to natural gas over the next five years is a milestone. AT&T is a very well-known and respected company. Their decision to switch this many vehicles to NGVs in this big way sends a signal to all of America’s fleets that NGVs are a “here-and-know” technology that makes sense -- environmentally and economically. When the price of gasoline and diesel fuel hit record highs in 2008, all NGV companies were swamped with calls from fleets and individuals about converting their vehicles. Once the price slid back 40 percent, some of the pressure to act went away. But big fleet operators realized that the very economic viability of their companies was threatened at those high prices, and that petroleum prices will certainly return to those levels once the world recession ends. So they have been using this period of relatively low gasoline and diesel prices to carefully evaluate NGVs. The AT&T decision has helped to remove concerns of many of these companies.

   AT&T has also sent a signal to the OEMs that there is real market demand for NGVs. Right now, while Europeans have the choice of many light- and medium-duty OEM-built NGVs, for America customers there is only one – the Honda Civic GX, a small dedicated sedan. The AT&T decision may accelerate plans by other OEMs to begin offering factory-built NGVs in the US.


How do you analyze the growing support that natural gas is receiving from politicians and oilmen in your country?


   There are two issues here. One is support for natural gas and the other is support for NGVs. Both are the strongest in memory. As to natural gas, historically, it was perceived that the U.S. natural gas supply was limited and declining. That myth has been dispelled by recent reports that America’s natural gas base is truly huge, and the economically recoverable portion of that resource base is, in fact, growing. A big factor in that has been the ability to produce natural gas from gas shale. Geologists have known about America’s massive gas shale deposits for decades. But it was discounted because there was no way to separate the gas from the rock economically. The technology has now been developed to do that. As a result, the economically recoverable natural gas resource base in the U.S. is now estimated at over 100 years. And that doesn’t even take into account America’s vast offshore methane hydrate deposits. Once the technology to produce those deposits economically is developed (and it will), America will have hundreds of years gas supply. A second factor in the growing support for natural gas is concern over climate change. Eventually, there will be economic technologies that produce zero net greenhouse gases. In the meantime (and it may be a long time), substituting natural gas for coal and oil is the best solution, and policy-makers are increasingly coming to understand that.

   As to why we are seeing growing support for NGVs, I think that it is human nature to look for simple, inexpensive solutions to complex problems. In the transportation area, there have been many such “promised” solutions over the last 30 years. First it was methanol, then electric vehicles, then corn ethanol, then hybrid electric vehicle. Now we have plug-in hybrids and, eventually, hydrogen. All these “magic” solutions have had one thing in common. Before they became commercially available, all you heard were the promises about how wonderful they would be once they made it to the marketplace. Once they actually got here, not all the promises were fulfilled and, worse, disadvantages, which were rarely mentioned, became evident. So, some of these technologies, like methanol vehicles, disappeared altogether. Others have only had niche impacts. Public and private decision-makers are now very wary of panacea technologies that are just “over the horizon”. They want solutions that work now.  NGVs is a solution that works right now. We have economic benefits, oil displacement benefits, greenhouse gas benefits and urban pollution benefits. And we are available now. A second large factor in the recent public support for NGVs has been the public education campaigns undertaken by T. Boone Pickens and Chesapeake Energy. I can’t over-emphasize how these advertising and PR efforts have raised the awareness of NGVs in the minds of decision-makers and the public. Once people know about NGVs, they like what they hear.


What would be the biggest advantages and difficulties for NGV growth in the United States?


   As I just mentioned, the advantages are foreign oil displacement, greenhouse gas reduction, and urban pollution reduction. About 85 percent of the natural gas used in the U.S. is produced here, while most of the rest is produced in Canada. Importantly, the U.S. Energy Information Administration forecasts that, by 2030, 98 percent of gas used in the U.S. will be produced in the U.S.  So, NGVs offer the best solution to displace foreign oil – which is a national goal. As to greenhouse gases, a recent study by the California Air Resources Board conclude that, on a well-to-wheels basis, NGVs produce 22 percent less greenhouse gases than diesel fuel and 29 percent less than gasoline. The study further concluded that powering NGVs with biomethane produced from landfill gas, sewage, animal waste and crop waste was one the most effective greenhouse gas reduction strategies for transportation. Finally, there are the urban pollution benefits of NGVs, which are very well known. And, all of these benefits come from a technology that saves users money over the life of the vehicle.

   As to difficulties, there are a few. One is fueling infrastructure. America is a big country with about 180.000 gasoline and diesel stations. There are only about 1.400 NGVs stations. That is why the industry’s focus has been on high fuel-use urban vehicles – especially vehicles that return to the same location every day (return-to-home vehicles) or drive primarily between two locations (point-to-point vehicles). Our growth strategy is to develop NGV “hubs” within cities starting with the return-to-home vehicles. Then add more and more public stations within those hubs. And, finally, to begin connecting those cities with fueling spokes along the highways that connect them. In this way, we are growing the infrastructure in a profitable way.

   Another difficulty is the lack of OEM offerings in the light- and medium-duty markets. In buses and heavy-duty trucks, there are many OEMs making NGVs. But, as I mentioned, our only OEM offering for light- and medium-duty applications is the Honda Civic GX. Our conversion companies are making excellent, reliable equipment, and there always will be a large role for conversions. But without OEM NGVs, growth in the light- and medium-duty markets will not be as fast as it could be. I strongly believe that over the next few years America will see more OEM offering – possibly led by the new Chrysler-Fiat company.


What are the NGVAmerica’s main challenges for this new NGV phase?


   Well … like all NGV trade associations around the world, we have many more ideas and plans that money to pay for them, so growing membership is critical. Fortunately, we are seeing growth – especially among two key stakeholder groups, namely, gas utilities and gas producers.  NGVAmerica (or the NGV Coalition as it was known then) was formed in 1988 by gas utilities who realized that, if the NGV market were to grow, there needed to be an organization representing all NGV stakeholder groups. However, in the 1990s and the early years of this decade, many gas utilities backed away from support of NGVs. But now there is a renewed interest by utilities in the market, and a number of utilities have rejoined NGVAmerica. As to producers, because of the way the natural gas industry evolved in the U.S., gas producers historically were not involved with growing the market for gas. That is now changing. The independent gas producers (the majors are still not involved with supporting NGVs) are now taking a much more active role in promoting natural gas to the end-user – especially for NGVs.  Some of these producers are now members, and we expect many more within the next six months.

   A second major challenge is sales. As I mentioned, there has been a huge leap in interest in NGVs by fleets and individuals. NGVAmerica is helping further grow this interest, but there must be someone locally to actually make the sale and service those customers. In many parts of the U.S., those people don’t exist. Therefore, one of NGVAmerica’s main challenges is the work with our existing and potential members companies to get more local “feet on the street”. In other words, more trained NGV sales people.

   A third challenge is federal legislation. NGVAmerica has been very successful this year in getting a number of pieces of federal legislation introduced (like the NAT GAS Act). While these are great achievements, they won’t have any impact unless and until they are passed into law by Congress and signed by the President. We must continue work to ensure that that happens.


As President of the International Association for Natural Gas Vehicles (IANGV), how have you balanced your workload with that of being NGVAmerica President? Do you think that your appointment has served to attract U.S. attention to gas vehicles?


   While the two roles are complementary, they are two very different jobs. During this year, I will have made six international trips on behalf of IANGV to speak to NGV conferences from Nigeria to Colombia to Madrid to Korea. There also always are many political and administrative issues that arise and must be addressed. And, as the global NGV industry is evolving, so is IANGV.  There are tasks that only can be effectively done by a global organization like IANGV.  Representing the world NGV industry at the United Nations is one example. But there are many important tasks that can only be done at the regional and national level. One of my goals as IANGV President is to double the number of countries that have national NGV associations, and to improve the coordination of all issues among those national and regional associations and IANGV. Fortunately, I have Brett Jarman as IANGV’s Executive Director. Brett is energetic, innovative and tireless. He actually does most of the work, and makes my IANGV role much easier.

   As to impact of my IANGV role to growing the U.S. NGV market, it has been very helpful. There are over 10 million NGVs on the world’s roads, but that fact is not known at all in the U.S. My IANGV presidency has given me the opportunity to brag about what the rest of the world is doing, and to emphasize policies and programs from other countries that could be implemented here. The growth in NGV use worldwide is a great story, and I think that has had a real impact as I carry that message to America’s decision makers.