April 23, 2012. The head of Ford Motor Co. said the auto industry is focused on expanding the use of engines powered by compressed natural gas (CNG), 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, Illinois, 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 natural gas and biofuels. "The next big one that's coming now is natural gas," Mulally said.

   The potential expansion of the CNG 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.

   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.