Transportation's Role in Reducing U.S. Greenhouse Gas Emissions ...

Transportation’s Role in Reducing U.S. Greenhouse Gas Emissions: Volume 2
Incremental costs for CNG LDVs range from approximately $3,000 to $6,000 for original
equipment manufacturer (OEM) vehicles (NGA, no date), to approximately $15,000 for
conversion of an existing gasoline vehicle (NGVA, 2009). Much of the costs to the vehicle
owner may be defrayed through tax credits, however. This analysis assumes the use of
dedicated OEM vehicles in the medium to long term. In this timeframe, OEM vehicle costs
would likely decrease under higher production volume scenarios (NGA, no date).
Accordingly, the lower value of $3,000 is assumed for the 2030 assessment.
Table 2.5 summarizes the incremental costs, savings, and emission reduction benefits
associated with CNG use as an alternative to gasoline LDVs in 2030, with an estimated
cost-effectiveness of -$132/tonne. One estimate was identified in the literature regarding
potential cost-effectiveness of CNG vehicles in the medium term (McKinsey, 2009, page
100), at approximately -$50/tonne. These negative cost per tonne values are likely the
result of large fuel savings assumed in these analyses.
Table 2.5 CNG per Vehicle Cost and Cost-Effectiveness Ranges by Time
Period
Year
Incremental
Vehicle
Cost MPGGE a
Lifetime
Gasoline
Saved
(Gallons)
Discounted
Fuel
Savings b
Net
Discounted
Cost/Savings
Average GHG
Reduction
(Tonnes/Year)
Dollars/
Tonne –
Calculated
2030 $3,000 28 6,500 $4,460 -$1,460 0.7 -$132 to -$50
a Equal to AEO 2030 conventional gasoline vehicle.
b Using pretax AEO gasoline and CNG gge price projections for 2030 (long-term) of $3.43 and $2.36,
respectively.
Cobenefits
Natural gas, as either LNG or CNG, is clean-burning and emits somewhat lower levels of
particulate matter and ozone precursors compared to gasoline or diesel light-duty
vehicles. The GREET model estimates life-cycle reductions for dedicated CNG LDVs
relative to conventional gasoline vehicles, as shown in Table 2.6. The differentials may
vary, however, depending upon the gasoline vehicle emissions control technology.
$4,500 for the necessary slow-fill equipment (CRS, 2008). This analysis assumes exclusive use of
fast-fill retail stations.
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