CERAWEEK-US natgas bonanza no game-changer for auto makers

* Natural gas vehicle segment unlikely to grow

* Focus on zero-emissions hydrogen, electric

HOUSTON, March 10 (Reuters) - The 'game-changing' discovery of decades' worth of natural gas in U.S. shale formations has not changed auto-makers' minds about natural gas-power vehicles, which they said on Wednesday will remain a minor niche market.

While compressed natural gas (CNG) has become a popular and relatively cheap source of transport fuel in parts of Europe and Asia, it has failed to make significant in-roads in the United States, where gasoline prices tend to be relatively lower and refueling infrastructure more widespread.

Campaigners, including billionaire investor T. Boone Pickens, have worked to change that, arguing that better use of huge domestic natural gas resources would help wean the nation's dependence on imported oil, but key auto sector executives appear unmoved.

"We see natural gas vehicles remaining a niche market," John Viera, Director of Sustainability & Environmental Policy at Ford Motor Company (F.N), told the CERA Week conference, an event dominated this year by discussion of natural gas.

He said the efficiency and environmental gains from using natural gas in stationary sources, primarily displacing coal in power plants, would be far greater than in transport.

The lack of interest in natural gas vehicles comes despite the massive boom in natural gas shale in North America, discovery of which has more than doubled gas resources and can supply more than a century of consumption at current rates, an IHS CERA study released on Wednesday said. [ID:nN10251273]

Jeffrey Jacobs, vice president of Chevron (CVX.N) Technology Ventures, said natural gas-powered cars made sense in some regions, but were not well-suited to the U.S. market apart from use in some urban buses or delivery fleets due to alternative sources, a diverse fleet and a dispersed infrastructure.

"Natural gas is not a good fit. We don't see a significant penetration beyond that we have now," he said.

Instead, auto-makers are focusing on squeezing more efficiency out of internal combustion engines, for example by reducing vehicle weigh, or moving toward zero- or near-zero emission electric or hydrogen cars.

"Our feeling is let's get the advantage of fuel cells," said Britta Gross, head of Global Energy Systems and Infrastructure Commercialization at General Motors [GM.UL].

Although CNG equipment can be retrofitted onto many cars, the Honda Civic GX CNG is the only gas-powered new vehicle available in the United States, according to fueleconomy.gov. (Reporting by Jonathan Leff; Editing by Marguerita Choy)