By Doug Cameron Of DOW JONES NEWSWIRES The head of Ford Motor Co. (F) said the auto industry is focused on expanding the use of engines powered by compressed natural gas, creating a potential clash with the U.S. chemical sector. Alan Mulally, chief executive, outlined the alternative fuel technologies being pursued by Ford during a town hall meeting at Northwestern University in Evanston, Ill., late Wednesday, having earlier in the week flagged the high cost of batteries for all-electric cars. Ford is exploring a range of alternative fuel sources including gas and biofuels, and Mulally said the "majority" of its electrified autos would use hybrid engines, with a move towards plug-in models and all-electric vehicles. "The next big one that's coming now is natural gas," Mulally said. The potential expansion of the gas-powered auto fleet in the U.S. will be watched warily by chemical makers. Cheap natural gas from fast-growing shale gas fields has given them a competitive advantage over overseas rivals that they are loath to see eroded by competing auto demand. Andrew Liveris, chief executive of Dow Chemical Co. (DOW), has warned that any mandated use of compressed natural gas in passenger cars would wipe out the cost advantage enjoyed by U.S. chemical producers. Liveris said in an interview in February that the chemical industry could co-exist alongside wider use of natural gas for transportation, but suggested it was best suited for trucks and urban transit rather than passenger cars. With auto makers are trying to improve the cost and efficiency of batteries. Mulally repeated remarks made in a speech in California that the battery for its Focus electric car cost between $12,000 and $15,000 apiece, raising the list price well above the $22,000 it charges for the gasoline-powered version. Another avenue being explored by Ford is hydrogen-fueled electric vehicles, though Mulally said there was still much work to be done on the battery and fuel-cell technology. "We haven't given up on hydrogen," he said. -By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com
