Compressed-natural gas is fast displacing biofuels as the alternative fuel flavor of the day, say auto makers, suppliers and aftermarket companies that have seen a dramatic spike in demand for vehicles that run on the natural resource.

The U.S. is awash with natural gas. “We’re the Saudi Arabia of natural gas,” says Eric Rosenberg, Honda’s assistant manager-Alternative Fuel Vehicles.

Data provided by BAF, a leading upfitter of CNG vehicles, indicates the U.S. has between 150 and 200 years’ supply of natural gas based on current demand.

The abundant supply of homegrown natural gas combined with escalating gasoline prices has opened the eyes of many consumers, Rosenberg says, noting the fuel emits between 60% and 90% fewer smog-producing pollutants and 30% to 40% less greenhouse gas.

Honda, which has produced the CNG-powered Civic GX since 1998, has seen demand for the vehicle skyrocket.

“Demand has tripled, and that’s actual retail demand,” Rosenberg says. “Traditionally, fleet has been about 50% to 55% of demand, but now it’s dropped; now 80% of demand is retail.”

According to Honda, the amount of smog-forming emissions emitted by the Civic GX is near zero, making it the cleanest internal-combustion vehicle in the world.

Add in the fact the CNG equivalent of a gallon of gasoline retails for about $1.72, and it’s a win-win situation for consumers, he says.

The Civic GX traditionally posted modest sales, with more than 12,000 units delivered since its debut. But if Rosenberg has his way, that’s all going to change with the launch of the ’12 model, set to hit dealerships this fall.

Until now, Honda has directly marketed the Civic GX only to its fleet customers, with advertising focused on retail buyers coming in the form of online banner ads, he says. “It’s been a quiet campaign, but with the ’12 model year there will be a new and fresher approach to support the vehicle.”

For ’12, the GX will be renamed the Civic Natural Gas.

The car will be highlighted in most major ad campaigns and made available to 1,000 dealers, up from 139.

“Senior management decided to leverage the uniqueness and green-ness of the GX,” Rosenberg says. “It’s going to be more of a halo for the Civic brand.”

The Civic GX retails for $24,590, $6,935 more than a comparable gas-powered model. The additional cost covers engineering modifications needed to make the engine compatible with CNG, which burns about 400º F (204º C) hotter than gasoline.

Modifications include heavy-duty pistons, connecting rods and crankshaft, as well as CNG tanks, pressure regulators, high-pressure fuel lines and unique fuel injectors and filters.

While the extra cost is significant, Rosenberg says lower fuel prices will more than offset the additional initial expenditure over the life of a vehicle.

Unlike most other manufacturers that offer CNG-equipped vehicles, Honda modifies the engines in its own plants to handle the alternative fuel. Other OEMs use aftermarket upfitters, which add the appropriate upgrades at their own facilities.

Ford has a handful of upfitters it lists as “qualified vehicle modifiers.” Most prominent among Ford’s QVMs is Dallas-based BAF, a subsidiary of billionaire T. Boone Pickens’ Clean Energy Fuels.

But Dick Cupka, Ford’s commercial vehicles sustainability program manager, says the upfitters modify the vehicles for their intended use, such as designing a delivery truck for a major carrier, and install CNG tanks.

All engine upgrades are handled internally, he says.

Demand for Ford’s line of CNG-powered commercial vehicles has been “coming from all areas,” Cupka says.

“The difference we’ve seen is people that were previously interested and wanted more information are now much more serious (about buying),” he says. “Fleets with larger numbers of vehicles have done their homework and are closer to signing on the dotted line.”

Ford offers a number of CNG-equipped vehicles, including the E-Series fullsize van, Super Duty F-Series pickups and the Transit Connect small commercial van.

The Transit Connect has been a particularly hot item, Cupka says, with about 12% of all orders calling for the CNG version.

BAF recently completed CNG upgrades for 50 Transit Connects for a taxi fleet, and another 30 currently are being prepped.

So-called “soft orders,” which Ford describes as customers who intend to buy a CNG-equipped Transit Connect, number 200.

Like Honda, Ford charges a premium for CNG vehicles, typically in the range of $12,000 to $15,000.

While the majority of Ford’s CNG business is fleet, the auto maker offers all its CNG-powered vehicles to retail customers as well.

The auto maker does not provide retail sale information. But Cupka says as the fuel gains acceptance, the vehicles might follow suit.

General Motors’ Commercial Product Director Joyce Mattman says the auto maker recently restarted in-house CNG development after a 5-year hiatus.

“Over the last couple of years there has been increasing demand, and we were able to very quickly get this approved and into production,” she tells Ward’s. “We’ve had engineers very involved in the program.”

The activity level with regard to CNG has surged over the past 10 months at GM’s Milford, MI, proving ground. “They’ve been sleeping at the proving ground,” Mattman says of engineers working on CNG vehicles.

After briefly considering leaving the CNG business to upfitters, GM decided to leap back into the business at the request of its fleet customers, who wanted an OEM-backed warranty.

The vehicles also were crash tested, she says, which is not done in the aftermarket. GM charges $14,590 for the CNG package, which is offered on the Chevy Express and GMC Savana fullsize vans.

Although GM only offers the CNG vehicles for fleet buyers, Mattman says GM is leaving the door open for other applications.

Chrysler also seems poised to enter the CNG market, according to recent statements by CEO Sergio Marchionne, who also heads up Italy’s Fiat.

A decade ago Fiat introduced its CNG “Natural Power” line of powertrains and currently is a market leader in CNG-powered vehicles in Europe.

In June, Marchionne hinted the Natural Power line soon could hit U.S. shores.

“CNG technology is readily available without extensive development time or expenditure of resources,” Marchionne said. “Chrysler Powertrain is actively investigating applications for CNG and is exploring solutions that would drive people to the technology.”

Despite the advantages offered by CNG, both critics and advocates of the fuel warn there are stumbling blocks in the way of a mass rollout.

Most significant is the lack of a re-fueling infrastructure. While many fleet owners operate their own refueling stations, fueling options for retail consumers are scarce.

Clean Energy spokesman Bruce Russell says his company has built 224 CNG fueling stations, including some available for retail consumers.

About 50 to 60 new stations are being built now, with “more on the way,” he tells Ward’s.

While he admits Clean Energy has strong interest in CNG, Russell argues it is a solution to lessening the country’s dependence on foreign oil.

“The U.S. is a spider web of pipes providing (natural) gas everywhere. We just tap into the pipeline and bring it out,” he says. “The economics are very compelling.”

Natural gas also can be used to make hydrogen and generate electricity, two other alternative transportation fuels.

“If you believe in a hydrogen future, natural gas could be viewed as a bridge to that future,” Russell says. “It’s here now, it’s clean, and there’s a whole lot of it.”

And for large commercial trucks, it makes much more sense than electricity, he says, noting current EV technology cannot haul heavy loads.

Russell questions why the U.S. has been slow to adopt CNG as a transportation fuel, while the rest of the world has embraced it.

“There are about 150,000 CNG vehicles in the U.S., but worldwide there’s 12.5 million and growing,” he says.

There are areas of the U.S., particularly those operating natural-gas extraction facilities, where CNG-powered vehicles are more widespread. These include Utah and Oklahoma.

While high gas prices likely will be the key to driving consumers to CNG vehicles, Clean Energy and other advocates hope the word gets out on other benefits, including access to the high-occupancy vehicle lanes in traffic-heavy areas such as Southern California.

CNG also stands to receive a boost from Washington. President Obama in a recent speech lauded CNG as a transportation fuel.

“In terms of (developing) new sources of energy, we have a few different options. The first is natural gas,” Obama said in a speech last month at Georgetown University. CNG “is an area where there's actually been some broad bipartisan agreement.”

On April 6, a bi-partisan bill – dubbed the NAT GAS Act of 2011 – was introduced in the U.S. House of Representatives by key Republicans and Democrats.

The bill calls for expanding tax credits for CNG used as a vehicle fuel, as well as $4,000 credits for the purchase of CNG vehicles.

While there’s no shortage of those clamoring for increased CNG usage, the Union of Concerned Scientists warns there is no silver-bullet energy solution.

David Friedman, research director of the Clean Vehicles Program at UCS, says if the U.S. started to use CNG as both an alternative fuel and to generate electricity, supplies would run out quickly.

Friedman says as a non-renewable resource, CNG is not a long-term viable alternative to gasoline, arguing its best use would be as a fuel to generate electricity or hydrogen to power vehicles.

And although CNG is cleaner than gasoline, Friedman says it’s not clean enough to meet looming government-imposed emissions regulations.

Rather than employ it on a widespread basis, he says CNG would be best suited for fleet use, while personal transportation solutions should include a host of technologies, including hybrid- and pure-electric vehicles.

“The reality is our oil addiction and climate problem is too big to be solved that simply,” he says.