Thank you, Mr. Tweed.
I want to start with the auto industry's biggest challenge, and that is energy use. Right now, the issue is around having a reasonably cost-effective, portable fuel. It's an issue not only with transportation, but in other markets, and it affects the economies of countries globally. The issue is the price of oil. When economies are not really strong, as they grow, the demand for oil goes up. We have issues now with dipping economies into a recession. In my opinion, that's going to be an issue for quite a while to come.
How do we deal with that? Right now, the CAFE regulations from Canada and the U.S. are going to require us, between now and 2025, to use half the fuel to go 100 kilometres. That's really quite an enormous challenge.
If you look, for example, at the Honda Fit of today, which is their smallest car, it's slightly better than today's number. But for 2025 or even 2016, it's far away from what's required. What does that mean for the car companies? It means that companies that may be selling Cadillacs, Buicks, or large-sized sedans, such as Chrysler, Ford, and BMW are going to have to have fuel economy that is significantly better than a Honda Fit or a Toyota Corolla across the board on average.
So how do we get there? Obviously we're looking at things like electric cars, hybridization, and so on. One of our customers who I was speaking to feels that between now and 2025 there's going to be a $3,000 to $8,000 cost per car. What does that mean for the industry? It means that the price of cars is going to go up significantly to the extent that we'll lose a significant number of our customer base who are going to move off of vehicles. It's going to affect top line revenue and bottom line profit for both the auto companies and the supply base. It's going to be an issue.
Obviously we'll do our best to get there. Electric vehicles and hybrids won't be the whole answer. I'm here to recommend that we think more and talk more about natural gas. Natural gas, in the words of Boone Pickens, is cheaper, is cleaner, is plentiful, and it is ours. That applies to Canada, as well as to the U.S.
We're all awash in natural gas because of new means of extraction. We have over three times the known reserves that we had in the past. We've gone up to 140 years of known reserves. Prices are dropping, they have been dropping, and are expected to stay down for the medium and long term. It doesn't require investments in refineries. It's a big opportunity for us. We've all talked about the energy crisis. We've all talked about the price of gasoline. If we said that we had a fuel that cost 10% or 20% less than gasoline, and that you can use the same vehicle-type infrastructure as people are used to with piston engines, then that would be great. We could at least find a bridge to get us to the future, when other technologies can take over.
In 2011, natural gas was 69 cents per litre equivalent to gasoline at the pump. If you pumped it at home, it was 25 cents a litre. That's probably high for a number of reasons, such as the low volume of vehicles that we have here, and the low number of filling stations.
At this time, it's the only real replacement fuel that can be used more broadly across the board. It has the potential to be all that we hope. It provides emission reductions because of the nature of the molecule, which has less carbon. It is cheap transportation energy with enormous reserves, and so on.
In Pakistan, they have 2.3 million natural gas vehicles today and over 3,000 filling stations. In Argentina, there are 1.8 million vehicles that are run by natural gas today and 1,850 filling stations. In Iran, there are 1.7 million natural gas vehicles, and they're an oil producer. They have over 1,000 filling stations. There are a lot of countries that have a million or more. Contrasting with Canada, we have 12,000 vehicles and 80 filling stations across the country.
From 2000 to 2010 we had 30% growth in natural gas vehicles globally, but we had a reduction in North America. So I think we're currently running against the opportunity.
What do we need? We need a network of filling stations, and there are really two things we can do. One is to encourage filling stations at corner gas station centres, possibly by policy. The other is to somehow incentivize the use of home refuelling stations. There is a natural gas infrastructure in place today that feeds many suburban homes with natural gas. A line to the garage, or whatever, for overnight filling would make sense for a lot of people until there's a broader infrastructure in place. We need to build this infrastructure quickly to avoid constantly hitting our heads on the price of oil-based fuels every time the global economy expands. That's my first message.
Second, the call is for technology discussion on the potential for new types of vehicles. We've done studies on electric vehicles. I'm sure a lot of you have heard this before, but in an electric car the battery costs more than the rest of the car. So to make a payback business case for the consumer is really difficult. It takes a lot of fuel savings to pay for that battery.
But as you move downscale to a plug-in hybrid, a strong hybrid, a mild hybrid, a micro-hybrid, and the battery gets smaller, the payback period gets shorter and becomes reasonable. So with a hybrid vehicle you can maybe have a four-year payback. With a micro-hybrid it could be a two- or three-year payback. That starts to make sense for the consumer. If you have a 12- or 15-year payback, the car is used up before you get your money back on your investment in extra technology like the battery.
Looking at that and an alternate industry called electric bikes, and going to small batteries, there is room for classes of vehicles that operate between bicycles, pedelecs, and scooters; and cars called “enclosed three-wheelers” or “three-wheeled pedelecs” that could be more practical for use on the road.
Currently there is no legislation for these types of vehicles, but I think it's going to come. So we need some clarity on legislation for these three-wheelers. My preference would be that they operate as pedelecs. The same way a bicycle can be a three-wheeled bicycle, any bike could be a three-wheeled e-bike.
If you have this type of vehicle you can operate it in at least three seasons. It's low cost. The battery is only a few hundred dollars. You would have reduced congestion and no emissions. If it's a pedelec version it's good for your health. So for small towns, and that sort of thing, this type of vehicle can make a lot of sense.
Today we're just on the cusp of it, with things like the Segway and the T3 Motion, which is the three-wheeled vehicle you see security people using. But if you expand it to something a little bigger, with the battery you could even have a heated vehicle so it's comfortable. We all know we have cold weather from time to time in Canada. If you're doing a small commute, it's a nice, comfortable way to go.
I think there's room for this type of vehicle. We should build legislation around it now, because there are plans in place to bring these vehicles into play globally, and hopefully in Canada.