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Natural Gas Vehicle Incentives

Written By Brianna Panzica

Posted July 16, 2012

Governors from thirteen states are endorsing natural gas vehicles, and they’re urging automakers to take part in the movement.

Colorado Governor John Hickenlooper and Oklahoma Governor Mary Fallin are in Detroit today meeting with officials from Chrysler, General Motors Co. (NYSE: GM), and Ford Motor Co. (NYSE: F).

According to a letter sent to the Detroit auto companies back in April, their states and the states of Kentucky, Louisiana, Maine, Mississippi, New Mexico, Ohio, Pennsylvania, Texas, Utah, West Virginia, and Wyoming all have agreed to invest in compressed natural gas (CNG) vehicles.

The governors of these states want to purchase CNG-powered vehicles for their state fleets to save money and encourage the use of domestic fuels.

From The City Wire:

Fallin and Colorado Gov. John Hickenlooper spearheaded the effort that seeks to “establish the demand and incentive for auto manufacturers in the United States” to design and build a “suitable CNG-powered passenger vehicle that can be used both by public fleets and private sector consumers.”

The United States is in the midst of a natural gas boom, with prices at a ten-year low and plenty of supply as fracking has allowed companies to extract the resource from shale.

Considering the U.S. is the world’s biggest consumer and importer of oil, it relies heavily on foreign sources.

Simply switching a portion of vehicles to CNG vehicles would greatly lessen our dependence on other oil-producing economies.

The problem is consumers are not all that interested in natural gas vehicles. The low price of filling up is attractive enough, but the enormous lack of fill stations poses a problem.

But companies are not building fill stations, either. After all, with so few people requiring them, where is the profit? It’s this chicken-and-egg problem, as Fallin calls it, that the governors are anxious to solve.

From MarketWatch:

“The United States has ample supplies of natural gas resources that are currently supporting millions of jobs throughout the country,” Fallin said. “By promoting CNG use, states like Oklahoma are supporting the production of American-made energy that creates jobs and reduces our dependence on foreign sources of oil.”

Honda (NYSE: HMC) came out with a 2012 Civic Natural Gas model that gets 38 highway miles per gallon. It isn’t impossible to find natural gas vehicles if you want one.

But according to the Department of Energy’s Alternative Fuels Data Center, there are only 500 CNG filling stations in the United States. And as you can see from the station locater, there are certain areas, particularly in the Midwest, where you just won’t find one at all.

But the incentives from these 13 states will begin to build up government CNG vehicle fleets. Those cities will require fill stations. And if it’s successful, other states could catch on pretty quickly.

It might not be long before CNG-powered vehicles are booming as much as the natural gas industry itself.

That’s all for now,


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