Companies are in position to speed up the rollout of natural gas fuels in the United States sparked by the passing of the Natural Gas Act of 2010 by the US Congress.
Natural gas is abundant in the US and Canada, and the Act promotes the conversion of the US long haul transportation system from liquid fossil fuels to natural gas. The conversion of passenger cars will be supported by rebates. The US government has earmarked US$3.8-billion for buyers of vehicles ranging from passenger cars to large trucks, to choose natural gas-powered vehicles. Subsidies for cars are expected to be around US$10-thousand, each while heavy trucks will get rebates of up to US$64-thousand. The US government also plans to strengthen the infrastructure, such as refueling stations and manufacturing plants.
One of the first on the grid is Italian firm Landi Renzo a global leader in compressed natural gas (CNG) and liquefied petroleum gas (LPG) systems, which opened its US subsidiary, Landi Renzo USA Corporation in January 2010. In July, it strengthened its presence by acquiring a 100% interest in the California-based Baytech Corporation in a US$15-million deal.
Baytech develops, manufactures and sells systems for Chevrolet, GMC, Isuzu and Workhorse Custom Chassis vehicles and engines. The systems meet stringent emission standards and On Board Diagnostics II. Landi Renzo says that Baytech is the only company in the US to have 11 CARB certifications and 16 EPA certifications for natural gas and propane fuel injection systems for GM vehicles and heavy-duty engines. CARB certifications are only obtainable through a very long, complex and expensive process, and are required in the 17 most populated states in the USA.
“The desire to reduce dependence on oil by using less polluting energy sources is pushing the US towards the adoption of cleaner alternative fuels. The recent discoveries of large domestic natural gas deposits, and the availability of technology to use it, no doubt encourage the development of the sector.” says Claudio Carnevale, group CEO of Landi Renzo.
Based in Cavriago, Italy, Landi Renzo supplies more than 30% of the global market with LPG and CNG alternative automotive fuel systems and components. The company was established in 1954 and during the last five years has registered a compound annual growth of more the 30%. It has become a global player through subsidiaries in 12 countries covering all continents. The company currently provides components or complete systems to some of the largest OEMs around the world including Toyota, the Volkswagen Group, the General Motors Group, Fiat Group, Renault, PSA, BMW, Mini, Suzuki, Tata and Mahindra & Mahindra.
It also provided components to a number of Chinese car makers, including Chery, Geely, Ashok Leyland and Brilliance Jinbei Automobile Company. The Landi Renzo Quality System is 2001 ISO/TS 16949 certified. More than 300 of the company’s workshops in Italy are now ISO 9001 certified.
Automotive Industries (AI) asked Andrea Landi, president of Landi Renzo USA, what the Natural Gas Act means for the company.
Landi: The new Energy Bill will give a tremendous boost to our sector. We believe that the volumes will grow up to 30,000 systems per year. Landi Renzo will represent a great opportunity and our target is to get a large share of the market.
AI: What is the Landi Renzo approach and model in terms of partnering with the gas infrastructure developers in the USA?
Landi: We see this as an important part of our plan. The key customers will be fleet and they will look for a turnkey project: station-kit-installation-service. We can take care of the last three activities and the possible partnership with a CNG provider will complete the package. The growth of the infrastructure is crucial for the market, and this is also another critical point of the new energy bill.
AI: Tell us about the Baytech Corporation acquisition – why was this company chosen?
Landi: We focused on the acquisition of knowledge. Baytech is an engineering development company and it is the only CARB certified brand for GM vehicles in the United States. Landi Renzo’s experience in terms of installations and service will allow Baytech to grow substantially.
AI: Now that the US government is pursuing the increased usage of natural gas, will Landi Renzo make more such acquisitions in the US?
Landi: We are always open to new acquisitions as long as we believe there are potentials of growth for the group in terms of products.
AI: Do you think mass production of NGV´s in the USA can become a reality in the near future?
Landi: With the help of incentives, I believe so. The USA is rich in natural gas resources and currently CNG is the cleanest available option for transportation.
AI: What is Landi Renzo USA’s potential market share in the USA, and where do you see yourselves in the next few years in other international markets?
Landi: We came to the USA with the intention of replicating our winning model that we have been developing all over the world. Landi Renzo is the world leader in alternative fuels, and we would like to have the same role here. Our American organization could also become a second hub within the group for R&D activities, especially innovation, which has always been the core of LR’s philosophy.
AI: On top of the obvious cost related benefits of greater use of LPG/CNG within the transportation arena there are other benefits related to the environment and national security, tell us your take on this issue?
Landi: Besides from the economic benefits the other two important aspects of the natural gas for transportation are the environmental impact and independence from foreign oil. Cars running on natural gas cut overall toxic emissions by 93-95%, so as a clear consequence, a massive presence of the NGV´s on the roads will give an historical and positive contribution to the preservation of the environment, especially in the big cities nowadays, so often characterized by the plague of smog and transport pollution. Also, as mentioned, and looking at the particular American case, by focusing on CNG vehicles, the USA could reduce oil imports by 1.2 million barrels a day, which is 25% of what the country imports from OPEC on a daily basis. Two-thirds of American foreign oil is used as a transportation fuel. The only way USA can solve the OPEC oil threat is by replacing their expensive foreign fuel with – to quote T.Boone Pickens – “cleaner, cheaper, American natural gas”.