Which is more efficient: to burn natural gas directly in an internal combustion engine (ICE) vehicle, or to convert that natural gas to hydrogen for us in a fuel cell electric vehicle?
It might seem inefficient to convert natural gas and water to hydrogen, since the steam methane reforming (SMR) process is typically 75% efficient on a higher heating value basis, meaning that 25% of the energy in the natural gas is lost in the conversion process.
However, hydrogen used in a fuel cell electric vehicle (FCEV) is up to three times more efficient than burning natural gas in an ICE. For example, Engineers from two of the DOE’s National Laboratories have certified the Toyota fuel cell version of their Highlander SUV at 69.1 miles per gallon of gasoline on an energy equivalent basis . The conventional (non-hybrid) Highlander achieves approximately 22 mpg fuel economy, so the fuel cell version is 3.1 times more efficient.
The net system efficiency for the hydrogen/FCEV pathway is then;
0.75 X 3.1 = 2.325; the FCEV can travel 2.33 times farther on a given quantity of natural gas than using that same natural gas in an NGV.
This calculation assumes that the NGV has the same fuel economy running on natural gas as it does on gasoline. However, the EPA¬  lists the Honda Civic GX NGV at 29.39 mpg combined cycle (24 mpg city and 36 mpg highway) but 24.8 mpgge (21 mpg city and 29 mpg highway) for the gasoline Civic, or a 1.187 times improvement in fuel economy running on natural gas for a dedicated NGV (engine optimized for running on natural gas, as opposed to a dual-fuel engine). If we apply this same improvement factor to the natural gas SUV, then the 2.325 to one advantage of the FCEV calculated above is reduced to 1.99--a given quantity of natural gas will propel a FCEV 1.99 times farther than it will propel am optimized NGV of the same size and body characteristics (aerodynamic drag and rolling resistance).
 See Keith Wipke (NREL), Donald Anton (Savannah River National Laboratory) and Sam Sprik (NREL), ‚Äú Evaluation of Range Estimates for Toyota FCHV-adv Under Open Road Driving ConditionsÄĚ, Report # SRNL-STl-2009-00446, August 10, 2009, available at http://www.nrel.gov/hydrogen/pdfs/toyota_fchv-adv_range_verification.pdf
 For EPA fuel ratings on NGVs, see http://www.fueleconomy.gov/FEG/bifueltech.shtml