During those five years, new technology unlocked vast reserves of natural gas in deep rock formations, creating a glut that has depressed prices. Compressed natural gas — or CNG — now costs between $1.79 to $3.49 per gallon in the U.S. depending on the location, compared with an average of $3.74 for gasoline and $4.12 for diesel, according to Clean Energy, which operates natural gas fueling stations, and AAA.
It's even cheaper for corporate or government buyers, who may pay as little as 80 cents per gallon for their natural gas, according to CNG Now, an industry lobbying group. In the U.S., CNG is sold in units that have the energy equivalent of a gallon of gasoline.
No one is quite sure how many natural gas vehicles are on the road. Honda and Chrysler are the only companies that make CNG-ready vehicles in their own factories. Ford and GM make vans and trucks that are prepped to run on CNG, or on a combination of gasoline and CNG, but rely on outside companies to add about $10,000 worth of equipment, including the natural gas tank. Some drivers convert their cars and trucks on their own.
GE is trying to develop a $500 home fueling station, and the federal government could encourage sales with tax credits, as it has done with its $7,500 electric vehicle credit. Some states are already giving tax credits.