Studies Boost On-Road, Off-Road Natural Gas Chances: Cummins Inc. (CMI), PACCAR Inc (PCAR), Navistar International Corp (NAV)

In addition, Cat has partnered with Westport Innovations Inc. (USA) (NASDAQ:WPRT), a designer of advanced gas-injection engines. The goal is incorporating the latter’s acclaimed “high-pressure direct injection” technology into Caterpillar LNG products. Most of these, the company projects, will be available in three to five years.

One other engine maker worth keeping an eye on is Cummins Inc. (NYSE:CMI). This company supplies new engines for oilrigs, Class 8 trucks and other vehicles ranging from trash trucks to tractors. It announced last year that it would be offering LNG conversion kits for its own diesel-powered oilrig engines. It also unveiled a partnership with Westport to design a co-branded line of natural gas engines.

The bottom line

Those pushing for increased natural gas use in the transportation industry still have a number of roadblocks to hurdle. These include high initial costs to obtain the technology and merge it with existing operations, relatively few outlets where vehicles on the go can be fueled up, and the national debate that hangs over the primary route to production: fracking.

The two biggest worries, though, have been positively addressed by these new studies by the University of Texas and RBC. If prices stay low and production remains high, natural gas should become more and more appealing to those buying and operating on-road and off-road vehicles.

If that does happen, Caterpillar should be positioned very well. It has jumped into the fray early and aggressively. And it has a presence in many different industries including construction, mining, railroads, marine, power-generation and even the engines used for natural gas drilling rigs. Cummins Inc. (NYSE:CMI) should also fare well thanks to its international positioning, particularly in China, where natural gas use has strong government support.

The article Studies Boost On-Road, Off-Road Natural Gas Chances originally appeared on Fool.com and is written by Howard Rothman.

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