GM May Enlarge Scope of Plans to Use Natural Gas
General Motors is weighing a $40-million proposal by California and Texas natural gas interests to sharply expand GM’s planned mass production of trucks that will run on natural gas, industry sources said Tuesday.
A consortium of natural gas producers and utilities, including Southern California Gas, is negotiating with GM to launch 1994 production of four types of truck engines and up to a dozen types of trucks, vans and buses designed to burn natural gas, sources said.
It wasn’t clear how many vehicles would be involved. But if consummated, the plan would suggest an increase in the scope of GM’s interest in compressed natural gas as an alternative fuel for cars and trucks.
GM wouldn’t comment Tuesday on any negotiations with natural gas interests, except to say it doesn’t expect any agreements in the immediate future. But sources in the natural gas industry described the general plan, which was confirmed by an aide to Garry Mauro, Texas land commissioner.
It calls for GM to pay $24 million and the gas industry $16 million to engineer the vehicles and engines to run on natural gas. It would involve all categories of GM vehicles weighing more than 7,000 pounds, sources said.
The 30,000 or so natural gas-powered vehicles now on U.S. roads were converted from gasoline-burning fuel systems and are considered inefficient.
Fueling cars and trucks with natural gas, which burns more cleanly than gasoline, is regarded as one way to meet the tough new clean-air standards being implemented in California and debated in Congress.
The natural gas industry is hoping for major commitments by GM and other auto companies to build natural gas-ready cars in the factory. But the auto makers are reluctant to spend much money on such projects until they know the final shape of a clean-air bill now nearing completion in Congress.
However, GM, the Texas General Land Office and 10 natural gas utilities in California, Texas and Colorado announced in July that the auto maker would begin producing at least 1,000 Sierra pickup trucks in early 1991 that would be designed to run on natural gas. They are intended for sale to fleet customers--including the utilities themselves--that have refueling facilities.
At the time, GM--which has favored methanol and so-called “reformulated” gasoline as solutions to the auto-emissions problem--said the Sierra project was a first step in a natural gas development program. The $40-million proposal is the first indication of what the next steps might be.
The surge in gasoline prices that followed the invasion of Kuwait has provoked additional interest in natural gas as an auto fuel. GM says it has since been deluged with proposals from other natural gas interests.
“We plan to have a contract in place by the first of October,” a natural gas industry executive said Tuesday. “But if it shows up in the (news)paper, it’s very likely that GM would cancel the program. They’re that sensitive about it.”
This executive said GM does not want to lock itself in to the program until it sees the final shape of the clean-air legislation.
However, a GM spokesman said, the clean-air bill has nothing to do with the company’s plans. He said none of the negotiations on natural gas projects will be completed by Oct. 1.
“There’s nothing that imminent, nor would we postpone anything because of the clean-air bill,” said Thomas Klipstine, a spokesman for GM’s truck and bus group.
Asked about the GM negotiations, Jack Smith, the SoCal Gas executive in charge of the company’s effort to peddle natural gas as an auto fuel, said, “I’m absolutely sworn to secrecy.”
