Sept. 24 (Bloomberg) -- Toyota Motor Corp., expanding its line of alternatively powered cars beyond Prius, will unveil a Camry Hybrid in November fueled by compressed natural gas rather than gasoline amid expectations of rising oil prices.

The CNG Camry will be shown at the Los Angeles Auto Show, Toyota executives told reporters at a conference in Portland, Oregon, yesterday. There are currently no plans to offer the concept vehicle to consumers, spokesman John Hanson said. The show opens to the press Nov. 19.

``We are confirming our interest in pursuing CNG within our R&D scope,'' said Irv Miller, a group vice president for the U.S. sales unit of Japan's largest automaker. A drop in natural-gas prices, an increase in North American supply estimates and the fuel's lower pollution levels than gasoline make it attractive, he said.

A surge in U.S. gasoline prices to more than $4 a gallon and tighter vehicle emission rules in the U.S. have led Toyota and other carmakers to boost investments in fuel-efficient technologies. Toyota plans to test lithium-ion plug-in Prius cars next year and Japanese rival Honda Motor Co. has begun leasing fuel-cell sedans to drivers in Los Angeles. General Motors Corp. aims to sell a battery-powered Volt by 2010.

Natural-gas prices are down 4 percent from the fuel's 30- month high set July 3. Gas for October delivery rose 27.3 cents, or 3.6 percent, to settle at $7.931 per million British thermal units yesterday on the New York Mercantile Exchange.

Honda sells a CNG-powered Civic sedan, the only consumer model powered by the fuel available in the U.S. The U.S. Environmental Protection Agency rates it the lowest in tailpipe exhaust among vehicles with internal-combustion engines.

Oil, Water Challenges

Toyota's Sustainable Mobility conference in Portland hosted a panel of researchers discussing environmental and energy issues that may complicate business for automakers in coming years. Topics included global oil production peaking in the next seven years and water shortages in California, the biggest auto market among U.S. states, reaching a crisis level as early as 2020.

Peter Wells, an oil analyst at U.K. research firm NetFlex Petroleum Consultants, said automakers have to prepare a range of alternatives to deal with swings in the cost of oil.

``You've got to be prepared for major changes in price,'' Wells said at the conference. ``Up and down in the near term, up in the long term.''

Oregon Test

Toyota, which last month announced plans to sell a small all-electric car by the early 2010s, also said yesterday it's sending four battery-powered RAV4 sport-utility vehicles to Portland for an evaluation program using new charging stations being set up in the city.

The RAV4s, with nickel-metal-hydride battery packs, had been leased in California since early this decade under a state requirement that automakers offer so-called zero-emission vehicles.

In addition, the company is cutting the price for replacement battery packs for first- and second-generation Priuses by more than 10 percent, from $2,985 now.

Since the Prius went on sale in the U.S. in 2000, Toyota has replaced fewer than 300 packs in the hundreds of thousands of cars purchased, said Hanson, the company spokesman. Over time, older models with high mileage may benefit from a new nickel- metal pack, he said.

Replacement packs for Priuses sold from 2000 through 2003 will cost $2,299. For the newer version of the car sold since late 2003, the cost will be $2,588. Toyota has said it will bring out a redesigned Prius, the world's best-selling hybrid, in 2009.

Solar Roof

Toyota also said that next month it will begin using the largest, single-roof solar-power system in North America on a parts distribution warehouse in Ontario, California.

The system can produce as much as 2.3 megawatts of electricity, or about 60 percent of the facility's needs, from 10,417 solar panels supplied by San Jose, California-based SunPower Corp., the automaker said.

Toyota's U.S. sales unit is based in Torrance, California, and the parent company is in Toyota City, Japan.

The company's American depositary receipts rose 47 cents to $88.25 at 4:15 p.m. in New York Stock Exchange composite trading. They have fallen 17 percent this year.

To contact the reporter on this story: Alan Ohnsman in Portland, Oregon, at aohnsman@bloomberg.net

Last Updated: September 24, 2008 16:27 EDT