Toyota decides to give natural-gas cars another chance

PORTLAND, Ore. -- Toyota will announce today that it is taking a new look at an alternative fuel that it had left behind: compressed natural gas.

And Honda, the only maker now of a CNG-powered car, plans to make twice as many of those environmentally friendly Civics for the U.S. in 2009 as it did last year.

Toyota says it will display a concept version of a CNG-electric hybrid Camry at the Los Angeles Auto Show in November. Though it has made no commitment to production, the unveiling is tied to a burst of renewed interest.

"With this concept, we are confirming our interest in pursuing CNG," says Irv Miller, a vice president for Toyota Motor Sales, the U.S. sales arm. He lauded CNG as cheaper than gasoline, low in emissions and more plentiful than oil. Data presented at a Toyota-sponsored conference here made the case for oil production declining faster than natural gas supplies, pointing to the need to look anew at the fuel.

Toyota is "testing the waters," says John O'Dell, senior editor for Edmunds Green Car Advisor. "They want to be ready" if it looks like CNG will make a comeback.

The announcement comes amid splashy, big-budget ad campaigns that have attempted to move natural gas off the energy back burner. Texas billionaire T. Boone Pickens has touted natural gas and wind power as the centerpieces of his "Pickens Plan" for energy independence. And Chesapeake Energy, one of the nation's largest natural-gas producers, has ads promoting CNG.

Toyota's new look at natural gas "demonstrates there is a great deal of attention at progressive auto manufacturers who are looking at the opportunity to use a clean, abundant, affordable, American fuel," says Chesapeake Senior Vice President Tom Price.

Several automakers, including Toyota, offered CNG-powered vehicles nearly a decade ago but quit when interest flagged. CNG-powered vehicles usually have less range than gas-powered vehicles and less trunk space because of the large fuel tanks.

Also, there currently are only about 1,000 CNG fueling stations nationwide, half available to consumers.

Yet high gasoline prices have spurred enough interest that Honda says its CNG-powered Civic GX has a wait of several months. It plans to make 2,000 next year. The Civic GX costs $25,090, nearly $7,000 more than the gasoline equivalent.

The GX is mostly sold to fleet customers, except in California and New York, where it is sold to consumers. Demand jumped when gasoline prices rose, says spokesman Chris Martin.

He says Honda is supportive of Toyota's renewed interest. "We think it helps acceptance" of natural gas to have more models available from all makers.