By Ben Lefebvre

Published April 01, 2011
| Dow Jones Newswires
Print Email Share Comments (0)
Text Size
HOUSTON -(Dow Jones)- Apache Corp. (APA: 129.98, -0.94, -0.72%) will provide a compressed natural-gas fuel station at Houston's George Bush Intercontinental Airport to serve the city-owned airport parking shuttle fleet, the company said Friday.

Apache's partnership with Houston continues the company's push to expand the role of CNG-powered vehicles in the U.S. With President Barack Obama pledging to cut U.S. oil imports by a third within the next decade, the country's natural-gas supply will become increasingly important as a fuel for cars and trucks, Apache Chief Executive G. Steven Farris said.

"This isn't rocket science," Farris told Dow Jones. "It's become apparent we have an abundance of natural gas. It's just a good idea for the economy."

Apache said it paid $1.5 million to build the CNG fueling facility. The 30 Ecopark airport shuttle buses annually travel about one million miles and transport about 676,000 people at the airport, according to the Houston Airport System agency.

About half of Apache's worldwide daily output--the equivalent of 385,000 barrels of oil--is natural gas. Recent breakthroughs in technology have allowed oil and gas companies to crack open deeply buried shale formations and unleash vast supplies of energy previously thought unattainable. Farris has said he expects natural-gas prices to stay between $5 and $6 for the next 10 years, which he expects would put a gallon of CNG at about $1.75 less than the cost of a gallon of gasoline.

Apache plans to build seven CNG fueling stations around Houston and west Texas in the next two years, doubling the current amount. It also plans to double the number of CNG vehicles in its own company fleet, to 360, Farris said.

In his March 30 speech on alternative energy, Obama called natural-gas' potential as vehicle fuel "enormous" and asked Congress to pass legislation offering incentives for CNG use.

Adoption of natural-gas vehicles in the consumer market has been slow. Some commercial and municipal fleets have converted to natural gas in recent years, but the fuel only met 3% of the transportation sector's energy demand in 2009, according to the U.S. Energy Information Administration.

North America had about 122,000 vehicles powered by natural gas in 2009, according to the International Association for Natural Gas Vehicles. That lagged far behind Asia, which had nearly six million such vehicles on the road, and Latin America, which had four million, according to IANGV data.

In the U.S., the only consumer-market CNG vehicle is the Honda Civic GX. General Motors Co. (GM: 32.41, +1.38, +4.45%) plans to build natural gas-powered versions of its Chevrolet Express and GMC Savana.

Farris said that a serious industry push could help CNG vehicles reach meaningful market share in the U.S. within two years.

"It's a question of resolve," Farris said.


Buck