The co-evolution of alternative fuel infrastructure and vehicles: A study of the experience of Argentina with compressed natural gas

In a quest for strategic and environmental benefits, the developed countries have been trying for many years to increase the share of alternative fuels in their transportation fuel mixes. They have met very little success though. In this paper, we examine the experience of Argentina with compressed natural gas. We conducted interviews with a wide range of stakeholders and analyzed econometrically data collected in Argentina to investigate the factors, economic, political, and others that determined the high rate of adoption of this fuel. A central objective of this research was to identify lessons that could be useful to developed countries in their efforts to deploy alternative fuel vehicles. We find that fuel price regulation was a significant determinant of the adoption of compressed natural gas, while, contrary to expectations, government financing of refueling infrastructure was minimal.