Believe The Hype: Natural Gas Is The Next Big Thing

When ExxonMobil’s CEO Rex Tillerson proclaims natural gas will overtake coal to become the second most widely used source of energy by 2025 it’s time to sit up and pay attention. Not because the oil and gas giant is ceding to competitors (ExxonMobil is actually North America’s largest natural gas producer) but because of the potential natural gas holds for companies like Landi Renzo, a global leader in alternative fuel systems.

I had a chance to sit down with Landi Renzo’s Chief Financial Officer David Kang at SAP’s customer event SAPPHIRE NOW to learn more about the company’s business model and new partnerships with Ford Motor Company and General Motors.

According to Kang, installing new Compressed Natural Gas (CNG) systems into new cars is as easy as it sounds; Landi Renzo sets up shop near car manufacturing plants and installs CNG technology into the cars as they roll off the assembly line. Making the switch to CNG sounds just as easy for vehicles already running on traditional gasoline.

“Take out the old tank, replace it with the CNG tank, make a few modifications under the hood, done,” said Kang.

Not surprisingly, companies like AT&T, Sempra Energy, Super Shuttle and logistics giant UPS are keeping Landi Renzo very busy as they expand their truck fleets to run on natural gas.

This begs the question: If fleet managers see the value of CNG when will the rest of the world?

According to Kang, widespread adoption is just around the corner. Landi Renzo alone has been selling over 1.5 million CNG systems per year, supplying most of the world’s car manufacturers.  “So I expect original equipment manufacturers to be more involved in clean, alternative fuel solutions as this sector continues to grow and expand,” said Kang.

One recent example of CNG gaining further traction is Landi Renzo’s partnership with Ford Motor Company, as they recently announced Landi Renzo USA as a QVM (qualified vehicle modifier) developer and installer of CNG systems.  In addition, General Motors is undergoing a joint venture partnership with Landi Renzo SpA to build a new state of the art R&D facility in Italy.

“These are exciting times to be a part of, as gasoline prices and public awareness of clean alternative fuel solutions increase,” said Kang. “And since 98 percent of natural gas used in the U.S. is from North America – and half the cost of gasoline in some areas – it eliminates dependency of foreign oil. Definitely a win-win solution for everyone involved.”

Speaking of win-win solutions, watch this short video to learn how Landi Renzo was able to double in size and also support its growth strategy.

What do you think? Is natural gas a win-win for businesses and consumers?

Follow me on Twitter @TClark01.