The high price at the pump has Americans looking for alternatives to gasoline. One alternative has been right under our noses all along. And it's getting new attention.

Natural Gas Vehicles

The Honda Civic GX runs on fuel that costs $2 to $3 a gallon less than gasoline. And the fuel doesn't come from Saudi Arabia. It comes from North America. It works just as well or better than gasoline, and it creates very little pollution. You can even fill up your car at home.

The Honda Civic GX is an NGV, a natural gas vehicle.

Ed Huestis, the Transportation Systems Manager for the City of Vacaville, California is the proud owner of a Honda GX.

Vacaville has the highest per capita number of NGV's in the country. Huestis says there's a lot to love about his natural gas car.

"This car is so smooth to drive, and it's so much fun on long distance trips that even though it's only marketed as a commuter vehicle, we take it on all our long distance trips," he says.

The GX gets superb gas mileage and qualifies for the carppool or HOV lane in some states. And in some areas, natural gas is dirt cheap.

During the recent gasoline price spike, when some Americans were paying $5 a gallon or more at the pump, Compressed Natural Gas or CNG in Oklahoma was selling for 91 cents per gasoline gallon equivalent - and for 64 cents a gallon in Utah.

Sign Me Up

Richard Kolodziej, President of NGVAmerica, which represents the Natural gas vehicle industry, says "our phones and the phones of every one of our companies are ringing off the hook from consumers who say 'I want to convert my car.'"

He adds, "Transportation is the only market where we've had one fuel. Think about it. In residential, commercial, industrial, power generation, there are multiple fuels for different applications, different parts of the country. Transportation? It's only petroleum. That's over."

There are over 120,000 NGVs on U.S. roads today and over 8 million worldwide.

Natural Gas Drawbacks

There are some downsides to NGV's that have kept them from catching on in the U.S. in a big way.

Although all the major auto companies sell NGVs abroad, right now only Honda sells them in the United States. The GX costs more, but is eligible for thousands in federal tax credits.

Another downside: The range of the Honda is only about 200 to 250 miles, because compressed natural gas takes up more space in the tank than gasoline, so if you want to take a road trip, you have to make sure there are CNG refueling stations along your route. There are over 1,100 NGV fueling stations in the U.S., and over half are available for public use.

The Norfolk-Virginia Beach area is typical of many parts of the country. It has only three natural gas filling stations for a metropolitan area of close to 2 million people. And the fueling stations are in industrial areas, and not where most people live.

But while you might not be able to fill up your natural gas car at the nearest 7-11, you can fill it up - at home.

A garage applicance called Phill has made natural gas cars much more appealing. Phill allows you to fuel your car from your home's natural gas supply for a dollar to $1.50 a gallon gasoline equivalent. You just plug it in and turn it on. It shuts off automatically.

Phill costs about $4,000 to install, but in parts of the country you can get a lot of that back in tax credits.

The only downside, other than the initial cost of Phill, is that your home natural gas supply is under low pressure, so if your tank is completely empty, it could take as long as 20 hours to fill it. But if you're just commuting to work, you can easily top off your tank overnight. And at natural gas fueling stations, where the fuel is under high pressure, you can fill up in minutes.

Until the number of fueling stations grows, experts say natural gas is best suited for large fleets that operate within city limits, like buses, garbage trucks and other city vehicles.

Supply

Supply is never a concern with natural gas. North America's proven natural gas reserves are actually growing, as new technology allows us to unlock more gas trapped in coal fields and in shale. But there's a whole lot more natural gas offshore.

Kolodziej says, "There are whole areas of the country that are off limits to even look. Congress has said, it's off limits. The whole East Coast, the whole West Coast, all around Florida, and in areas around the Rockies are off limits."

Automakers and government agencies are pouring billions of dollars into development of hydrogen-powered vehicles, which are very expensive and aren't expected to be ready for the consumer until 2050.

And the hydrogen fuel for those vehicles comes from converting natural gas. "Why don't you just take the natural gas and use it directly?" asks Kolodziej.

Kolodziej says the future of transportation will use a variety of energy sources: petroleum, electric and natural gas.

"There is no silver bullet answer to our transportation problems," he says. "We're going to have to use all the fuels for the all the different applications."

So natural gas cars may not be a panacea for America's energy problem, but they could be a big part of the solution.

*Original broadcast August 20, 2008.