WATCHING GOVERNMENT GAS FLAREUP

The simmering dispute between the U.S. oil and gas industries over the future of natural gas as a transportation fuel has flared into the open again.

The American Petroleum Institute released a booklet at its recent annual meeting entitled "Reinventing Energy."

The pamphlet argues that the U.S. is not running out of oil, Americans don't waste oil, they don't need to cut oil use to improve the environment, oil imports aren't at critical levels, and alternative fuels aren't a good substitute for oil.

The latter assertion riled the Natural Gas Vehicle Coalition (NGVC), which exists to promote natural gas as a transportation fuel.

API STANCE

API said compressed natural gas (CNG) and liquefied petroleum gas (LPG) reduce air emissions more than reformulated gasoline, although they may generate slightly higher levels of smog forming nitrogen oxides. Both produce about 25% fewer carbon dioxide emissions than reformulated gasoline.

It observed there are more than 350,000 LPG and more than 30,000 CNG vehicles on U.S. roads, making gas the most used alternative transportation fuel.

But API said because LPG and CNG contain much less energy than gasoline in a given volume, large tanks are required and driving range is reduced.

What's more, although the cost of the fuels is less than gasoline, vehicle costs are higher-as much as $7,500 more for CNG vehicles and $1,000 for LPG vehicles. However, costs should drop with greater production of vehicles.

API said, "Use of CNG or LPG would decrease oil imports. But if large volumes of these fuels were used, much of it would have to be imported.

"The U.S. supply of LPG is limited, and most of that supply is committed to high value uses in the chemical and other industries.

"Natural gas is plentiful. However, if substantially increased volumes were used in transportation, prices of domestic natural gas would rise and fuel providers may seek cheaper for- eign supplies. Much probably would come primarily from Canada and Mexico, and secondarily from the Middle East and Pacific Rim."

API asserted the federal government is pushing alternative vehicles fuels at a great cost to the public when the best course would be a "hands off" approach.

It said, "There is no need for the government to forcibly reduce oil use, and government mandates aren't necessary to advance superior technology, which has traditionally made its way to market without government help."

FRONTAL ATTACK

Warren Mitchell, NGVC chairman, accused API of a frontal attack on the alternative fuels industry.

He said, "This book is brought to you by major companies that import 53% of America's oil. The fact is that natural gas is an economical and environmentally beneficial U.S. alternative to our foreign oil dependency and pollution problems."

But Mitchell did not dispute API's statements, other than to claim natural gas emissions are 61% lower in nitrogen oxides than gasoline.

This gas vs. oil fight is over a vital issue, market share. It won't go away soon.