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.
Peter

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.

Good News For Gas Producers

This is very good news for producers of natural gas in America and Canada. Natural gas can be compressed (CNG) and used in conventional internal combustion engines with very little modification. It appears the United States and Canada have abundant supplies of natural gas, especially considering the relatively recent discovery of how to produce gas from common organic rich shale, or so-called Shale Gas.

There is no doubt that finding and developing more of this gas will create American jobs, increase tax revenue, decrease our dependence upon foreign sources of oil and be a good thing for our economy in general. The technology and infrastructure to accomplish all of this is in place, ready to go.

Many examples of these Shale Gas Plays are exhibited on this blog. Some of these shales include the Barnett, Haynesville, Fayetteville, Marcellus, and the Woodford. These articles can be found on this blog through the search function.
Peter

Natural-Gas Vehicles Gain Senate Backing; Gas-Price Jump Seen By Siobhan Hughes, Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- A plan to encourage more natural-gas vehicles in the U.S. got a new push on Wednesday, as the top Democrat in the Senate backed legislation to provide tax breaks and other incentives for the vehicles. But underscoring the trade-offs involved in turning the U.S. away from oil as a transportation fuel, one of the plan's biggest backers said that it would cause gas prices to double from current levels. That could be a problem for households that use gas to heat their homes or gas-fired power plants, though fueling vehicles would remain relatively inexpensive. "Will it bring the price up?" billionaire energy investor T. Boone Pickens said in a response to a question at a press conference on Capitol Hill. "It will probably." He estimated that prices would rise to about $7 per thousand cubic feet, compared with prices that would translate into about $3.46 per thousand cubic feet in recent trading. Pickens joined two senators at a press conference to promote the legislation, which is also backed by Senate Majority Leader Harry Reid, D-Nev. The plan would extend tax breaks for buying natural-gas vehicles, provide grants to develop light- and heavy-duty gas engines, and provide incentives to build refueling stations. Besides turning away from foreign oil, the goal is to turn to a fuel that produces fewer greenhouse-gas emissions. "Natural gas is not the ultimate solution at ending our dependence on foreign oil," said Sen. Bob Menendez, D-N.J., one of the sponsors. "But natural-gas vehicles must be part of the solution as well, because With new extraction techniques we now have 35% more accessible natural gas than we did two years ago." The plan has been promoted for at least a year by Pickens and a fellow gas man, Chesapeake Energy Corp. (CHK) Chief Executive Aubrey McClendon. The two got a boost last year, when Rahm Emanuel, who at the time was a lawmaker in the U.S. House of Representatives and now serves as chief of staff to U.S. President Barack Obama, introduced a natural-gas vehicle bill. Though the full measure never became law, it helped elevate the topic within the highest levels of the U.S. Congress. Behind the push is the discovery of vast new amounts of gas locked up in rock formations -- known as shale -- around the U.S. The gas fields in Texas, Louisiana and Pennsylvania led the nonprofit Potential Gas Committee to announce that the U.S. has 2,074 trillion cubic feet of natural gas still in the ground, or nearly a century's worth of production at current rates. That is up 35% from the previous estimate in 2007. For drilling in those regions to be truly economic, prices would need to rise. At $7, Pickens estimated that the cost of refueling a natural-gas vehicle would still be cheaper than using conventional gasoline, as a thousand cubic feet of gas contains the same amount of energy as eight gallons of gas, which would cost between $20 and $24 at current prices. Gas would also be cleaner: Cars that run on compressed natural gas generate 25% fewer carbon-dioxide emissions than cars that run on conventional gasoline, according to an earlier U.S. Environmental Protection Agency estimate. Separately, Pickens denied a report that he was scaling back a plan to build the world's biggest wind farm to five or six smaller farms. Speaking to reporters after the press conference, he said "I didn't cancel it." He said " it's going to be delayed about a year or two." -By Siobhan Hughes, Dow Jones Newswires; 202-862-6654; Siobhan.Hughes@ dowjones.com