U.S. drivers look to what's in Argentina's tank: natural gas

U.S. drivers look to what's in Argentina's tank: natural gas
Some cars in Argentina run on natural gas
By Tyler Bridges | McClatchy Newspapers
9/8/08

BUENOS AIRES, Argentina " Jorge Noguero pulled his black-and-yellow taxi up to the Shell fueling pump and then watched as an attendant attached a thin tube to his engine to fill his tank " with natural gas.

"I get a good performance, and it's 70 percent cheaper than gasoline," Noguero said, explaining why he converted his taxi to use natural gas.

More vehicles run on natural gas in Argentina than anywhere else in the world, and that success is attracting a burst of interest from the U.S., where a big push is under way to convert buses, taxis and cars to natural gas.

Representatives of American companies are flocking to Argentina to buy natural-gas compressors, conversion kits and fuel tanks to sell in the U.S., said Alessandro Carlo, president of Tomasetto Achille, a major Argentine maker of these products, based in Buenos Aires.

Others from the U.S. are heading south to gain technical know-how.

"We have someone visiting from the U.S. every week," Carlo said. "We're the pioneers."

Many drivers in the U.S. are clamoring to fill up with natural gas because it's about $1.50 cheaper a gallon on average than gasoline, according to industry figures.

Others favor natural gas because it produces about 20 percent fewer greenhouse emissions. And some see natural gas as a way to reduce U.S. dependency on imported oil.

Texas oilman T. Boone Pickens is receiving attention for his plan to have a third of American vehicles using natural gas in 10 years.

In the meantime, Honda Motor Co. is doubling production of the only passenger car sold in the U.S. that runs on natural gas " but only to 2,000 vehicles.

"There has never been a time in the United States where everything lined up for the growth of natural-gas vehicles like now," said Rich Kolodziej, the Washington-based president of the International Association of Natural Gas Vehicles.

Galileo, also based in Buenos Aires, is one of the major Argentine producers cashing in on the favorable circumstances.

"We're dedicating our efforts now to sell to the U.S.," said Fausto Maranca, Galileo's president. "We see a lot of Americans at trade expositions in South America. We're more advanced than the United States' companies."

Argentina's success began with a decision by the government in the early 1980s to keep natural-gas prices artificially low " something the U.S. is unlikely to try.

The Argentine government also made it easier for service stations to install the equipment needed to fuel vehicles and created a special program for several hundred taxis in Buenos Aires to convert to natural gas.

The U.S. seems to be moving in this direction, albeit slowly. Bills in Congress would create incentives to encourage consumers to buy more natural gas-driven cars, for service-station owners to install natural-gas pumps and for manufacturers to build more natural-gas cars.

"You have to make it clear that it's a long-term policy, that the price will be cheaper for the long term," said Sylvie D'Apote, a Rio-based associate director for Cambridge Energy Research Associates, a private consulting company.

Argentina's government made the push in favor of natural gas because the country had an abundance of the fuel while diesel supplies were dwindling.

As Buenos Aires taxi drivers spread word of the savings by using natural gas, car owners began to convert their vehicles. This prompted service stations to begin making the investment to offer natural gas.

Today, about 1.7 million vehicles run on natural gas in Argentina, or about 15 percent of all Argentine vehicles.

By contrast, less than 1 percent of vehicles in the U.S. run on natural gas.

Other countries worldwide are converting to natural gas at a much faster rate, led by Pakistan and Brazil. In South America, Bolivia, Venezuela and Peru are also making major pushes.

"It's worked out great," said Silvestre Prado, a Lima taxi driver. He paid $1,500 to convert his car and figures that he'll recoup the investment in 18 months through fuel savings.

There are drawbacks: The cylindrical tank that holds the natural gas takes up about half his trunk. Prado has to stop to fill his tank with natural gas every 70 miles, or about twice as often as when he uses gasoline.

Like other converted vehicles, his taxi contains a switch below the dashboard that allows him to fuel it with gasoline if natural gas is unavailable, as happened during a brief spell a year ago.

Mauro Nieto is owner of Movil Gas, a Buenos Aires car shop that converts vehicles to natural gas. Nieto said he converts about four vehicles per day.

"We have a lot of work now," Nieto said.

So do Argentine equipment makers. Tomasetto Achille sells the conversion kits in 35 countries around the world.

"Argentina is the world laboratory for natural gas," Carlo said.
-----------------------------------------------------

More from McClatchy:
U.S. natural-gas production surges
http://www.mcclatchydc.com/economics/story/48978.html