Fuelmaker goes bankrupt, Honda to blame?
by Jeremy Korzeniewski on Apr 6th 2009 at 3:09PM 
Fuelmaker, the company that creates the PHILL compressed natural gas filling stations for residential and commercial use, has just been driven into involuntary bankruptcy. You may recall that Fuelmaker is owned by Honda, which had been in negotiations last year to sell the company to a number of different suitors, most notably to T. Boone Pickens' Clean Energy Fuels. None of those negotiations resulted in a sale.Fuelmaker's bankruptcy leaves a number of questions as to how companies relying on PHILL fueling units will get their products serviced, and it also casts doubts on the future of CNG vehicles for private residential use. Fuelmaker president John Lyon has hopes that another suitor will "see this as an opportunity and come to the rescue."
We're not ready to count ourselves among those that believe the automaker has ulterior motives in closing up shop at Fuelmaker. For an alternative take from the Edwin Black, click here.
[Source: The Auto Channel / Edwin Black]
Reader Comments (Page 1 of 2)
jharlan 3:50PM (4/06/2009)
Natural gas is the easiest to implement, most cost effective alternative fuel in the short term. Why it isn't being subsidized and promoted by our government is a mystery. We have ample CH4 resources, and most of the infrastructure in place. Very little needs to be done to gasoline powered cars to make them dual fuel vehicles. Could it be corruption? It is hard to come up with an alternative scenario.
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Gary 4:03PM (4/06/2009)
Who killed the electric car? Who killed the propane car?
No conspiracy theories here. To many drawbacks. Lack of demand. Wrong time.
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paulwesterberg 5:49PM (4/06/2009)
Honda may have done the following:
- designing, engineering, and building thousands of cars
- lobbying against cars you are building
- filing lawsuits to avoid building cars
But it didn't do this:
- reclaiming and destroying all of the cars you built
darius 2:19PM (4/08/2009)
Well there are over 2 million LPG cars in Poland and over 1 million in Italy. Not sure whats the percentage of the total fleet but LPG is quite popular option from what I know.
I would think that lack of demand is more to do with lock of buying options.
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Chris M 4:17PM (4/11/2009)
There is a difference. LPG (Liquified Petroleum Gas) is mainly propane and butane, those gasses condense into a liquid under pressure, greatly increasing storage capacity and driving range. CNG (Compressed Natural Gas) is mostly methane and ethane, those gasses do not liquify under pressure at room temperature.
The advantage of CNG is that natural gas is delivered through pipes to to many homes, enabling home refueling, it is fairly clean burning, and it has a lower carbon content than LPG.
Disadvantages of CNG include high compression required which requires expensive specialized compressors, expensive high pressure tanks, and limited driving range compared to similarly sized LPG or petrol tanks.
Mike!!ekiM 4:32PM (4/06/2009)
The long term is getting shorter and shorter. Too short for a big role out of CNG. Hybrid and Electric are the two viable solutions. Prius's have been on the road for 10 Years Now. CNG does Nothing about Global Warming, except possibly make it worse. The Arctic Ice Sheets are melting 8 Time faster then previously though.
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Pablokoh 5:44PM (4/06/2009)
How about a CNG hybrid.
paulwesterberg 6:01PM (4/06/2009)
A CNG hybrid range extended would be cool because:
- natural gas burns cleaner than gasoline
- you would never ever need to stop at a gas station
- the fuel would stay fresh for a longer time without fuel stabilizers
- schlepping around the unnecessary fuel would be less costly because the fuel would weigh less
- safer than gas in an accident
Drawbacks:
- fueling in your garage with a spark and an explosive gas could cause problems
- not many places to fill up with natural gas(but you can get propane cylinders at many locations)
- it takes energy to compress the gas
- fuel tanks take up more room and are harder to fit in irregular spaces.
Bill 10:14PM (4/06/2009)
These home refueling stations cost several thousand dollars installed, and were only available in a limited number of states here in the U.S.
That's on top of the hefty premium you pay for the Civic GX over its petrol-fueled sibling (and @$2/gallon, no chance of making up the difference)
And in California where most GX are sold there is already a decent network of public fast-fill stations.
LPG/gasoline "dual-fuel" conversions are more practical for private owners than CNG-only vehicles like the Civic GX.
Most CNG-only vehicles remain government-owned and their refuel stations are rarely open to the public.
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Edwin Black 8:21AM (4/07/2009)
I have viewed the updated version of this blog and find it more useful to readers and commend the updates. While this is a blog of limited format scope, it is still owned and operated by AOL, the same company that operates Time and CNN. Therefore, the same journalistic standard is always appreciated. The fuller story on Honda and Fuelmaker, as indicated above, can be found at either www.thecuttingedgenews.com or The Auto Channel, Energy Publisher, Spero News or other responsible outlets. It is important to remember that Fuelmaker did not file for bankruptcy. Honda suddenly forced them into involuntary bankruptcy by calling its note, controlled through a no-name numbered Canadian corporation controlled by Honda. All employees were suddenly fired and sent away from the building without any severance. All service ceased. All production and operations terminated. Hence Honda consciously bankrupted its own alt-fuel company, Fuelmaker, in the midst of a global expansion of CNG refueling--from China to California. And it did so in hours. Theorizing on this blog--by the blog or its readers--is no substitute for careful journalistic investigation of the facts, precision in reporting, actual checking with prime sources from Honda to the receivers, and of course factual context in writing. In this case, numerous Fuelmaker dealers, employees, CNG industry sources, customers potential and real... and alt fuel experts, seem shocked and concur that Honda is undermining its own product. Their quotes are there to see. This type of thing is a very common phenomenon in automotive and transportation history going back to the original patent wars of the early 20th century, repeating like a broken record in every decade since, and of course continuing to this day. More information about the history of fuel and transportation going back to the wood monopolies can be learned from my book Internal Combustion at www.internalcombustionbook.com in which I devoted the final chapter to extolling how Honda CNG and Hydrogen could help save an oil addicted America. I went on a 300-event 40-city tour promoting this Honda hope and nominated Honda for two green awards which they received. Two years later, my next book The Plan--see it at www.planforoilcrisis.com--sited the sad, verified facts of Honda's refusal to produce the cars desired and the Fuelmakers to go with them. I cover this topic with the same gravity and precision I employ in my investigations of genocide, for which I am better known. Alt fuel in general and the Fuelmaker debacle is a very serious topic and everything we write and do effects people and societies. It must be factually based, careful and precise. While I cannot go back and forth on the many blogs that banter about my many investigations of corporate misconduct, I have been willing for decades to expend the resources necessary to ensure that accurate information on my topics is disseminated in any medium. I am also happy to do a web chat, or an interview with this blog on any topic or any fact I have written on. I have done many and find those useful. Thank you for allowing me to take more add depth to this discussion. My website for further information is www.edwinblack.com.
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Bill 6:37PM (4/07/2009)
You're alleging a conspiracy but have provided NO facts to back them up.
It is a FACT that the Civic GX is expensive, more expensive than even the hybrid Civic, but offers poor fuel efficiency for the extra price (24 mpg equivalent city, about 200 miles/tank).
It is a FACT that the home PHILL cost about $4,000 installed.
In the past, California has offered generous incentives that subsidized the expense of a home PHILL, but given the state's enormous budget crisis, those subsidies are unlikely to continue.
The most logical explanation is that Honda felt the PHILL units (residential & commercial), would not be profitable enough, going forward, to continue making.
Edwin Black 7:39PM (4/07/2009)
Bill, your remarks are bizarre, false and misleading. I can only wonder the basis for them. A conspiracy requires at least two parties. Who are they, Bill? This is not a conspiracy, it is "a business decision" by one company, Honda. My reporting never said otherwise. Check it at The Cutting Edge News.com. Your references, Bill, to the Honda Civic GX make no sense in view of the fact, that my reporting identified some 14,000 Fuelmaker installations including many forklifts, ice resurfaces and other special use and off-road vehicles where non-oil supply is appropriate. These vehicles and their refueling appliances are now stranded. Bill, does Honda make forklifts and ice resurfacers? My reporting spotlighted the VRA, or multi-vehicle commercial appliance. Is this a household Phill? So hiding behind anonymity you get to misportray the facts of my coverage and misinform the readers of this blog. I am accountable for my writing. Are you?
Sasparilla 2:41PM (4/07/2009)
This is very weird. It's been obvious Honda had this great company and then decided they didn't really want to sell the things - don't know why. They obviously could have sold more than the 1,000 Civic NG's they brought to the US per year in a lot of states.
Something to think about as we talk about CNG vehicles in the US, is that CNG prices rise and fall along with the world price of oil (presumably because it is such an easy substitute) - and we have not had a winter of CNG prices equivalent to $4 gasoline yet (prices of CNG in the summer of 2008 when they should be at their seasonal lowest was 3 times the prices we had this winter, when they are usually at their highest). Take this winter's CNG heating bills and triple them.
So, I would rather have this CNG option available to US consumers, but I'm also glad that we aren't adding more demand to the CNG market than is already there for our heating needs - when oil (i.e. & CNG) goes back up, we'll need all the slack in the CNG market we can get to keep prices down low enough so people don't freeze.
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Sasparilla 3:04PM (4/07/2009)
I apologize for the double post. The real question here is why did Honda do this? They had buyer's who wanted to buy Fuelmaker (T. Boone being one of note) for money - this move is obviously going to cost them money. There's something else, obviously, going on here.
I'd look for fingerprints of interests that would see CNG vehicles as a near to mid term threat (since CNG automobile production could be switched to very easily). Who wouldn't want Phill's on the market when oil goes back through the roof, as demand comes back in a year or two?
Just as GM sold its NickeMetalHydride battery patent and technology portfolio to Texaco (I believe) after killing the EV1 (insuring nobody else would be able to get EV size NickelMetalHydride batteries thereafter), I wouldn't be surprised to see something bad in this area as well. Very sad.
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Chris M 4:32PM (4/07/2009)
Hmm, maybe Honda is trying to reduce potential competition to their planned H2 fuel cell offerings? If so, it's bound to be a big mistake, considering that H2 fuel cell vehicle sales are still decades away, and the alt fuel competitors to H2 won't wait for H2 fuel cell and H2 storage prices to drop.
Bret 1:48PM (4/08/2009)
Let's see: We can convert natural gas to thermal energy to generate electricity, transmit it to a consumer's home, plug in the electric car that converts the electricity to chemical energy so when you drive your electric car the batter will conver the chemical energy into electricity, which will be converted to thrust.
Or we can take the same natural gas and burn it in an internal combustion engine, which converts it to thrust when you drive your car.
It's too bad that the public CNG infrastructure isn't more robust. The disconnect with Pickens is that his business model wants to charge market rates for CNG at the fueling station as opposed to consumer utility rates that consumers pay by investing in the Phil technology.
From an energy efficiency standpoint, this might make more sense where the electricity is generated from coal because in effect you've then converted coal for transportation use. Generally speaking, coal will be the most likely generation source at times that people would be recharging their electric cars.
Using CNG as a transportation fuel makes a lot more sense than other transportation energy sources. At least it makes a lot more sense than generating electricity from natural gas. Trillions of dollars of NG infrastruture already exists throughout the nation and technology like the Phil make the final connection possible.
H2 makes no sense because ALL hyrdogen in this market is from reformed Natural Gas. Why does it make sense to make such huge infrastructure investments into a technology where the only remotely economical way to generate H2 is from CH4? Why not just use the CH4 without wasting trillions of $?
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Carney 4:06PM (4/08/2009)
Not being a liquid at normal temperature and pressure, natural gas is an inconvenient vehicle fuel. It must either be compressed (requiring heavy high pressure tanks with a constant danger of explosion or leaking the entire contents) or cryogenically liquefied (thus risking boil-off) - both of which are energy intensive.
This problem makes NG prohibitively expensive to transport, so the NG found in oil wells in remote locations such as deep sea wells and poor countries is "burned off" at the site in a colossal waste.
Furthermore, NG, like most alternative fuels, is not "backwards compatible" with gasoline. An NG car driver running low on the exotic alt-fuel his car needs cannot fill up on gasoline if he can't find an NG station - he's simply out of luck and stranded.
But there IS a practical way to use NG to break free of oil: NG can easily and cheaply be made into methanol.
Methanol neatly avoids all of NG's drawbacks. It is a liquid at normal pressure and temperature. And a fully flex-fueled car can run with equal ease on methanol and/or gasoline (in any mix of the two in the same fuel tank at any time). Or ethanol or any alcohol at all for that matter.
If Honda had spent the mere $100 per car it takes to add full flex-fuel capability to all its new cars at the factory as they were being made, it would have had a guaranteed market for fuel stations selling NG-derived fuel, selling both the razor AND the blades.
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Dave Fox 6:51PM (4/10/2009)
I have a 2009 Honda Civic GX and MY Fuelmaker FMQ 2-36 quit working last night (4/9/09) at 3 months old and I cannot even get warranty parts. I have $60,000 of Honda's sitting in my driveway. The 07 Civic EX/Nav, and my GX are going away. I live 150 miles round trip from Portland, OR and cannot even get back to Portland to fill it up. It would have to be trailered. I see American Honda still hides behind its' 1-800 we have lame customer service number. I am not a Toyota fan as I had a 90 Toyota truck that had all the problems associated wit those years, but, the Prius is a better unit than the Civic Hybrid. Another fine example of American corporate leadership. Expletives deleted, and it would be EVERY word.
Dave Fox Unhappy former Honda Customer
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Kye Roberts 9:20PM (4/11/2009)
I am a PHIL installer in the San Fran bay area (the only one). By the way, it was $2400.00 installation. Most of cost was due to the building departments permit cost. We were easily installing the unit in 5- 6 hours.. Honda should not have been allowed to do what they did. We have contracts and customers left on a hook. We work really close with Phil Fuelmaker team, and they were great people.
No corporation or person should be allow to walk away from their responsibility.
What a terrible decision.
TEAM PAS
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Kyle 4:37PM (4/12/2009)
PS> For those who don't know. The PHIL was equivalent to an gas appliance (I.E gas dryer).
.It had more safety features
TEAM PAS - WANTED: HONDA FOR MURDER
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