GM says natural-gas Chevrolet Impala on the way

General Motors said it will sell a version of the Chevrolet Impala sedan with the ability to switch between gasoline and natural gas, part of the automaker's plan for taking advantage of a U.S. drilling boom that has made natural gas a more viable fuel for cars.

The dual-fuel Impala, to be announced today by CEO Dan Akerson at a conference here, will have one engine and two fuel tanks -- one for gasoline and one for compressed natural gas. That means drivers could almost instantly switch between fuels, depending on what is cheap and available.

"There will be nothing like it on the road -- literally," Akerson said in his prepared remarks before the speech.

Multiple automakers already sell CNG-fueled pickups. By launching a full-sized sedan that runs on natural gas, GM is signaling that it sees a future for the fuel in the passenger-car market.

Akerson said the sedan will have a combined range of up to 500 miles, with a large enough gasoline tank for 350 miles of driving and a large enough CNG tank for 150 miles. It is slated to go on sale next summer as a 2015 model.

GM said it will sell the CNG Impala to both fleet and retail buyers. But it's likely to appeal most to corporate and government fleet customers, which put a premium on fuel efficiency and generally have easier access to natural-gas fueling stations, said Alan Baum, an industry consultant in suburban Detroit.

"The thinking seems to be that there is some corporate fleet business to be had given the roominess of the car," Baum said. "But GM's focus has been on less fleet business for the Impala, not more."

He said the decision to put the technology on the Impala rather than another vehicle was "curious" given GM's repositioning of the nameplate as a showroom head turner with the spring launch of the redesigned 2014 model, which is pricier and more stylish than its fleet-heavy predecessor

Significant sales of a CNG model by the nation's largest automaker "could make GM a lead player in establishing widespread acceptance" of the technology, Baum said. "But it's obviously a long journey."

Following the Volt formula

The conference at which Akerson was making the announcement marked the 40th anniversary of the OPEC oil embargo. Automakers still cringe at the memory of that 1973 crisis, which hiked gasoline prices, forced Americans to wait in long lines at fueling stations and cast into stark relief the need for more reliable sources of fuel.

For years, natural gas seemed to be a poor alternative for cars. It was more expensive than gasoline, just for starters. On top of that, fuel pumps have always been scarce in the United States, and it is expensive to make the high-strength fuel tanks needed to store CNG at high enough pressure to give a car a decent range between fill-ups.

But natural gas is much cheaper now -- the equivalent of $1.50 to $2.50 per gallon in most of the United States -- thanks to the exploitation of U.S. shale gas reserves with hydraulic fracturing, also known as fracking.

Automakers are giving the fuel a second look. Manufacturers are increasingly offering CNG as a fuel option for large commercial vehicles such as city buses, because the lack of pumps is less of a challenge for fleet vehicles.

The Impala would be the only natural gas passenger car offered in the United States by a Detroit automaker, as well as the only dual-fuel car. Honda has sold a CNG-only version of the Civic since 1998, and this fall, Ford started offering a CNG-fueled version of its F-150 pickup.

Finding a natural gas pump can still be a dicey proposition. Akerson was expected to say that is why GM is using the same strategy it used for the Chevrolet Volt plug-in hybrid, which has a gasoline engine as a backup option to keep drivers from feeling anxious about running out of juice on long trips.

"The Volt shows the way," he said in the prepared text.

Government buyers

GM plans to sell most of the dual-fuel Impalas to government and commercial fleets.

The company expects slow sales, initially; Akerson was to say selling 750 or 1,000 units in model year 2015 would be a "home run."

The government has historically been a fan of swapping natural gas for oil because it burns cleaner, producing virtually no soot and smog. Natural gas vehicles also have 20 percent lower greenhouse gas emissions than their gasoline-fueled counterparts -- an improvement, though most environmentalists prefer electric vehicles, which could be powered in the future without any fossil fuels.

Akerson was to say that GM is committed to both, and has asked its engineers to work on some of the challenges facing natural gas.

"Natural gas powertrains are one of the areas where we have increased investment because we believe the technology can satisfy the green needs of both the environment and stockholders," Akerson planned to say.

Not least of the challenges is the cost of the car. The CNG version of the Civic starts at $26,305, a premium of several thousand dollars over its gasoline-fueled counterpart, though it comes with a $3,000 fuel card. Getting a CNG-fueled F-150 costs an extra $7,500 to $9,500, plus a $315 engine preparation fee, depending on fuel tank capacity.

As a government incentive for automakers to put these cars on the road, dedicated CNG and dual-fuel cars will already get extra credits through 2021 under the Obama administration's strict new corporate average fuel economy standards.

Akerson was to say that businesses need more clarity from the government to make greater use of natural gas. There are still questions about whether the U.S. government will allow the fuel to be exported, and whether it will impose regulations on fracking -- a practice that many environmentalists see as harmful.

Other entrants

Other automakers, such as Volkswagen, are trying to decide whether the time is right to market natural gas cars to Americans.

VW product development chief Heinz-Jakob Neusser said last month at the Frankfurt auto show that VW would like to bring such a car to the United States but is discouraged by the dearth of pumps. There are about 1,200 CNG fueling stations in the United States -- far fewer than in Europe -- and only half of them are open to the public.

VW is Europe's second-largest seller of CNG-fueled cars, after Fiat, and will be able, starting next year, to build a CNG-fueled version of its Golf hatchback in Mexico.

"We have the technology available," said Jonathan Browning, the CEO of Volkswagen Group of America, at that time. "We're looking for the signal that it's supported from a regulatory point of view and there's some degree of infrastructure available."

Sergio Marchionne, CEO of Chrysler Group, has repeatedly said the company could use Fiat's expertise to sell more CNG vehicles in the United States.

The automaker already offers a bi-fuel version of its Ram 2500 pickup. That truck starts up running on gasoline, switches to CNG, and then switches back to gasoline if it runs out of CNG.

"I can make them faster than you can think, but you have to have people that are going to buy them," Marchionne said early last year at the National Automobile Dealers Association convention in Las Vegas. "We're going to start showing the product, and then we'll see if people are going to take them."

The article GM to offer dual-fuel Impala in wager on natural gas originally appeared at Automotive News.

By Gabe Nelson- Automotive News