Could Natural Gas Dominate Global Transportation Soon?

What are the prospects of natural gas offering a viable alternative to oil as a transportation fuel?
Sure, natural gas already exists in the transportation sector. Compressed natural gas (CNG) is used in some parts of the world to fuel cars and trucks. But that only exists on a large scale in countries that have laid out specific government policies (like subsidies or regulated prices) to promote the fuel, either with the intention of cleaning up air pollution in big cities or reducing burdensome levels of gasoline and diesel imports. Countries like Iran, Pakistan, Argentina, and Brazil are the leaders in the number of natural gas vehicles on the road. Iran and Pakistan in particular account for nearly two-fifths of the total number of natural gas vehicles across the globe.
Elsewhere, CNG vehicles are just a niche product. In the United States, for example, natural gas is used in municipal buses or in corporate vehicle fleets. Natural gas can burn cleaner – in terms of both particulate emissions and carbon emissions – and reduce the cost of fuel. Still, CNG is not widely used, even in a country that has had extraordinary cheap shale gas for almost a decade.
One of the big constraints is the lack of refueling infrastructure – i.e. gas stations for vehicles to fill up. The problem is one of the chicken and the egg. Consumers are not going to buy CNG vehicles if they do not live near a CNG refueling station. But no one is going to build a CNG refueling station if there are no drivers with CNG cars. The US Congress considered legislation a few years ago to support natural gas vehicles, but it was not passed.

This post was published at FinancialSense on 06/05/2015.