Wednesday, July 22, 2009

Natural Gas Powered Vehicles Make Sense

It makes sense to convert existing vehicles and build new ones to burn compressed natural gas rather than gasoline and diesel fuel derived from petroleum (crude oil). If the government sweetens the deal with large tax credits, as they are proposing, so much the better.

Will this solve our energy "problems" and stop "climate change"? No. Will it create jobs, increase tax revenue, and decrease our dependence on foreign oil? Yes, most definitely. Go for it, Democrats and Republicans. Vote for it.

Big Tax Breaks for Natural Gas Vehicles in New Senate Bill
WASHINGTON, DC, July 10, 2009 (ENS) - A bill that allows a tax credit of up to $12,500 for the purchase of a natural gas-fueled vehicle was introduced in the U.S. Senate this week.

The bipartisan legislation, S. 1408, would extend and increase tax credits for natural gas vehicles and refueling. It is sponsored by Senator Robert Menendez, a New Jersey Democrat, with Senate Majority Leader Harry Reid of Nevada and Senator Orrin Hatch, a Utah Republican as original co-sponsors.

Said Menendez, "We saw last summer how the wild fluctuations in oil prices helped to wreck our economy and we’ve seen how pollutants from dirty fuels are wrecking our planet. Our economic crisis has shined a spotlight on the urgent need for alternative, cleaner and cheaper sources of energy that we don’t have to import. By making it easier and cheaper to own a vehicle that runs on natural gas, we can help families save money on energy, create new manufacturing jobs and clean our air."

"Because of new extraction techniques," Menendez told reporters, "We now have 35 percent more accessible natural gas than we did two years ago."

The bill, known as the NAT GAS Act, extends for 10 years the alternative fuel credits for natural gas used as a vehicle fuel, the purchase of natural gas-fueled vehicle, and the installation of natural gas vehicle refueling property credit.

"Each day, our nation consumes about 21 million barrels of oil - more than 25 percent of the world’s oil supply," said Senator Reid. "Nearly 70 percent is imported from outside our borders. With only three percent of the world’s oil reserves, we cannot produce our way to a safe and secure energy future. I’m proud to join with Senators Menendez and Hatch in introducing legislation that will help encourage the development of natural gas vehicles to help save consumers and operators thousands of dollars per year, protect our environment, and decrease our dependence on foreign energy."

Burning natural gas produces far less air pollution than burning gasoline. According to the U.S. Environmental Protection Agency, cars running on natural gas cut overall toxic emissions by at least 93 percent compared to gasoline.

"We must get serious about using cleaner burning natural gas and renewable energy, and this legislation is a strong step in the right direction," said Reid.

T. Boone Pickens listens as Senator Orrin Hatch tells reporters why he supports tax credits to spur the use of natural gas. (Photo courtesy Office of the Senator)

Natural gas is an abundant resource, with 98 percent of natural gas used in the United States originating in North America, a key reason for his support of this bill, said Senator Hatch.

"Natural gas is an important alternative fuel to help pave the way to energy independence, which will not only help keep us safer, but will also help reduce the high cost of fuel and, thus, high utility bills across the board," Hatch said.

"In our current economic downturn, it’s crucial to provide appropriate incentives that lead to lower prices for all Americans," he said. This piece of legislation does just that while also helping clean up our environment; I am a proud cosponsor."

Billionaire T. Boone Pickens, who drove his CNG-fueled Honda GX Civic to the news conference introducing the bill on Wednesday, said, "This bipartisan legislation does more to reduce our foreign oil dependency crisis than any other piece of legislation in the past 40 years. As I have said many times before and will continue to say, natural gas is cleaner, cheaper, it’s abundant and it’s American."

"This bill will accelerate the use of natural gas in vehicles and is the only way I know to quickly and effectively reduce our dependence on foreign oil," Pickens said. "For too long, our dependence on foreign oil has been one of the factors influencing our foreign policy and if we can eliminate that issue by using our own domestic natural gas resources I am confident that it will benefit our national security, our economy and the environment."

Pickens stands to benefit from passage of the legislation. The company he founded, Clean Energy Fuels Corp., owns and operates natural gas fueling stations from British Columbia to the Mexican border.

The largest provider of natural gas for transportation in North America, on June 30, Clean Energy opened the world’s largest natural gas truck fueling station on a site adjacent to the Ports of Long Beach and Los Angeles. Natural gas has the ability to displace 100 percent of the petroleum currently used in heavy-duty vehicles, according to the EPA.

If the bill becomes law, it would increase the refueling property tax credit from $50,000 to $100,000 per station, a provision from which Pickens' company would benefit.

The state of Utah also stands to benefit from this legislation. Americans use more than 22 trillion cubic feet of natural gas per year. There are an estimated 350 trillion cubic feet of natural gas in Utah and surrounding states. Currently, natural gas for vehicles sells for 88 cents per gallon in Utah, and at least 5,000 Utah drivers fuel their cars and trucks with natural gas.

In February, Utah Governor Jon Huntsman announced plans to increase the state’s natural gas vehicle fueling infrastructure and in his State of the State address designated Interstate 15 (I-15) from Idaho to Arizona as a natural gas vehicle corridor.

Demand for natural gas as a vehicle fuel has quadrupled during 2008, Huntsman's office says. Today, the state of Utah and the utility Questar Gas own and operate 25 natural gas fueling stations that are open to the public.

The legislation S. 1408:

  • Allows the natural gas vehicle and natural gas fueling infrastructure credits to be transferred by the taxpayer back to the seller or to the lessor
  • Allows state and local governmental entities to issue tax exempt bonds to finance natural gas vehicle projects.
  • Allows 100 percent of the cost of a natural gas vehicle manufacturing facility that is placed in service before January 1, 2015 to be expensed and to be treated as a deduction in the taxable year in which the facility was placed in service. This decreases to 50 percent after December 31, 2014 and is phased out by January 1, 2020.
  • Requires that when complying with mandatory federal fleet alternative fuel vehicle purchase requirements, federal agencies shall purchase dedicated alternative fuel vehicles unless the agency can show that alternative fuel is unavailable or that purchasing such vehicles would be impractical.
  • Provides for grants for light-duty and heavy-duty natural gas engine development.

Copyright Environment News Service, ENS, 2009. All rights reserved.

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