GM Will Build Natural Gas Vans -- Finally, Some Competition for T. Boone Pickens

By Jim Motavalli | May 19, 2010

Only one carmaker, Honda, offers a factory-made natural gas car (the Civic GX) on the American market. The still-small field is dominated by conversions, but General Motors announced Wednesday that it will be offering compressed natural gas (CNG) versions of its Chevrolet Express and GMC Savana full-sized vans later this year.

It’s about time T. Boone Pickens had some competition. There’s clearly a business case to be made, with tougher pollution standards, for commercializing CNG vehicles.

The larger-than-life Pickens is known for his Pickens Plan, which advocates the use of wind to generate electricity, and natural gas for road vehicles. It’s not as well known that, aside from owning Clean Energy (CLNE), the leading North American provider of natural gas (CNG and LNG) for transportation, he’s also a major provider of converted Ford CNG vehicles through Clean Energy’s BAF Technologies subsidiary.

Clean Energy acquired BAF, which is based in Dallas, last October. BAF describes itself as “the leading provider of natural gas vehicle systems and conversions in the United States.” It converts the full-sized Ford (F) Crown Victoria, and also a number of Ford commercial vehicles, including F-150 pickups, E-350 vans, and the kind of airport shuttles regularly seen at LAX and elsewhere.

Dan Whitten, a spokesman for America’s Natural Gas Alliance, said, “GM sees a market here. CNG vehicles have a lot of potential in the marketplace. As cities have to come into compliance with clean air regulations, they are cutting down their emission of particulate matter and ozone by switching to natural gas vehicles.”

I’ve interviewed Pickens twice, and in the most recent encounter in January he made plain that his interest had shifted from converting passenger cars (the original aim of the Pickens Plan) to targeting large trucks. “We have to target the heavy-duty vehicles, which is where you can get the volume,” he told me, adding that he was holding meetings with large trucking companies to try and get them to convert to natural gas.

Pickens is a major booster of H.R. 1835, which offers both new and stronger tax credits for people and companies that buy natural gas vehicles. It would also require that 50 percent of new federal vehicles bought before the end of 2014 be CNG or LNG capable.

The natural gas industry, of course, was ecstatic about CNG Chevys. Taylor Shimn, a spokesman for major natural gas supplier Chesapeake Energy (CHK) told me in an interview, “The GM announcement was pretty significant. Now American businesses have access to vehicles that are not dependent on foreign oil. We see significant growth in this sector.”

There are perhaps a dozen companies around the country producing aftermarket natural gas vehicles, mostly commercial. According to Dean Sloane, managing director of one such company — Clean Vehicle Solutions — GM’s strategy will likely be to offer natural gas options at the dealer level, but then farm the actual work off to companies like his. “These are not huge runs of vehicles, so that strategy makes perfect sense,” he said. “I think that’s the approach the OEMs will use in the near period of time.”

Photo: Flickr/Thruhike