US natural gas vehicles industry faces ‘chicken-or-egg’ dilemma

19 March 2013 21:43  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--The US transportation sector has the opportunity to adopt a widespread movement with natural gas vehicles, but all of the stakeholders are waiting for someone else to make a big move, a consultant said on Tuesday.

“A classic chicken-or-egg dilemma has prevented a large-scale industry transformation to natural gas fuels from occurring," said Tim Fitzgibbon, a consultant with McKinsey & Co., during the American Fuel & Petrochemical Manufacturer (AFPM) annual meeting.

Original equipment manufacturers will only ramp up production processes to meet guaranteed demand, Fitzgibbon said.

Meanwhile, fleet owners will only deploy additional natural gas trucks in coordination with proven infrastructure and will only increase demand if scale economics decrease costs, he said.

Additionally, infrastructure providers will only build fuelling stations along routes with proven demand, Fitzgibbon said.

“Given the current trends, there was no acceleration of penetration in the [natural gas vehicles] industry,” he said.

The AFPM annual meeting ends on Tuesday.

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By: Tracy Dang
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