Beruflich Dokumente
Kultur Dokumente
1
How much do Americans spend on gas each year? http://www.fuelfreedom.org/blog/how-much-do-americans-spend-on-gas-each-year/
2
Focus on Prices and Consumer Spending, http://www.bls.gov/opub/focus/volume2_number16/cex_2_16.htm
3
Oregon Greenhouse Gas Inventory through 2008, http://www.oregon.gov/ENERGY/GBLWRM/Oregon_Gross_GhG_Inventory_1990-2008.htm
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grow toward natural gas powered transportation corridors to, and mately a 100-year supply of natural gas at current consumption
through, our region. levels.4 About 85 percent of the natural gas consumed in the U.S.
is produced within U.S. borders and much of the rest comes from
The Pacific Northwests support of NGVs and the accompanying
Canada, which produces all it needs. Demand from the transpor-
fueling infrastructure via policies and financial incentives serves
tation sector accounts for less than 3 percent of current North
the greater public good by growing jobs, decreasing air pollution,
American natural gas demand.
improving public health and keeping dollars in the region.
NGVs are fueled with liquefied natural gas (LNG) or compressed
Introduction natural gas (CNG); each treatment is suitable for specific uses. LNG
In 2011, the U.S. imported nearly 70 percent of its oil while the is produced by condensing natural gas to a liquid at temperatures
average consumer in the U.S. and Canada spent a record $4,000 around -260F, and is vaporized before injection into the cylinders
on gasoline or diesel. Most of the money spent on transportation of spark-ignited or diesel engines. It is best used for long-haul
fuel in the Pacific Northwest leaves our region. At the same time, trucking fleets because the energy density is higher than CNG,
greenhouse gas and particulate emissions from the transportation allowing for greater driving range per tank. Due to the liquefaction
sector continue to rise significantly. Alternative transportation process, LNG infrastructure requires large amounts of capital. There
fuels such as natural gas, electricity, propane and biodiesel are currently four liquefaction plants in the Pacific Northwest, all
can help address these problems by keeping dollars in the currently operate as utility-scale peak shaving facilities.
region while mitigating environmental impacts and reliance on CNG is made by compressing natural gas to less than 1 percent
foreign oil. Because no single alternative fuel source can meet of its volume at normal temperature/pressure and is used directly
all transportation demand in the U.S., a portfolio approach is in spark-ignited or diesel engines. It is best suited for light- and
necessary: we must examine each fuel and create policies that medium-duty return-to-base fleets, as well as passenger vehicles.
are particular to the needs and nature of that fuel. Though this
paper focuses on natural gas as a transportation fuel, we recognize Economic Benefits
there is an important role for each alternative fuel in the transition
The economic advantage of natural gas over conventional fuels
toward cleaner and more secure fuel sources.
has steadily increased as new technology to extract natural gas has
Despite the many benefits of natural gas vehicles (NGVs), they have led to vast new recoverable reserves in the U.S. Deploying natural
struggled to gain a meaningful foothold in the U.S. and Pacific gas as a transportation fuel would have immediate and significant
Northwest. The goal of this paper is to provide useful information on positive economic impacts in the U.S. and our region. Due to its
natural gas as a transportation fuel and inspire a robust conversation domestic origin, dollars spent to extract the fuel stay in the U.S. and
about how NGV development can play a critical role in helping us Canada, along with the associated job creation. Additionally, be-
meet energy, economic and environmental goals. To that end, we cause natural gas is expected to remain cheaper than conventional
explore how federal and state/provincial policies as well as market fuels, using natural gas as a transportation fuel would decrease
drivers and barriers help promote or hinder NGV deployment. We transportation costs for goods and services, also spurring eco-
then suggest some useful policy tools that would promote natural nomic growth. Immediate economic benefits in the region would
gas infrastructure development and fleet adoption in our region, as a include on-going investment and job creation associated with fuel-
first step to more widespread deployment. ing stations.5 From an energy security perspective, relying on North
American fuel sources would reduce reliance on foreign oil.
Background
Natural gas was used as a transportation fuel during World War II
Environmental Benefits
and, since then, vehicle technology has matured and improved The environmental benefits of NGVs are well documented. On a
significantly. As vehicles improved, so did technology to access well-to-wheels basis, natural gas is one of the cleanest burning
the North American natural gas resource base: proven reserves alternative transportation fuels commercially available today.6
currently measure in excess of 330 trillion cubic feet (Tcf ), approxi- When used as transportation fuel, it can reduce greenhouse
4
Natural Gas Supply Update Canadian Gas Association, http://www.cga.ca/wp-content/uploads/2011/02/CGA_bulletin_SUPPLY-ENG1.pdf
5
Economic Impact Analysis of the Low-Carbon Fuel Standard Rule for the State of Oregon, Prepared for the Oregon Department of Environmental
Quality by Jack Faucett Associates, Inc. p. 29. http://www.deq.state.or.us/aq/committees/docs/lcfs/appendixDeconimpact.pdf
6
NGVAmerica, NGVs and the Environment, http://www.ngvamerica.org/about_ngv/ngv_environ.html
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gas emissions by 20 to 29 percent compared with diesel and Figure 1. NGV Adoption by Country11
gasoline, respectively.7 The natural gas-powered Honda Civic GX
is recognized by the U.S. Environmental Protection Agency (EPA)
as the cleanest commercially available, internal-combustion
vehicle on earth.
7
Ibid.
8
CNG Now
http://www.cngnow.com/what-is-cng/clean/Pages/information.aspx
9
Marbek, Study of Opportunities for Natural Gas in the Transportation Sector, http://www.cngva.org/media/4302/marbek_ngv_final_report-april_2010.pdf
10
Natural Gas Vehicles for America, http://www.ngvamerica.org/about_ngv/
11
NGV America, http://www.ngvc.org/about_ngv/
12
CNG NGV Solutions, http://www.cngngvsolutions.com/
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13
A full list of federal alternative fuel/NGV policies can be found at www.afdc.energy.gov/afdc/laws/laws/US/tech/3253
14
Fueling Options, http://www.cngvc.org/why-ngvs/fueling-options.php
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Deployment highlights The airport in Seattle (Sea- Success Stories in Southern have emissions requirements
Tac) has 74 NGVs, including 16 buses used for employee Oregon that promote AFVs, like Metros
transport and 47 natural gas vans, pickups and sedans Rogue Valley Clean Cities reports that Regional Clean Fleet Project,
and in 2012 opened a CNG station for their vehicles. The the Rogue Valley Transportation District which strives to decrease air
Port of Seattles alternative fuel program requires Sea-Tac (RVTD) has owned 15 NGV buses since pollution by putting filters on
departments to replace vehicles, where practical, with 1993 with great success. Not only have diesel garbage trucks.15
NGVs. In partnership with Clean Energy, the Port also they enjoyed the economic and environ- Deployment highlights Like
built Washingtons first large-scale public-access natural mental benefits associated with their Washington, adoption of NGVs
gas station just south of the airport which allowed NGV fleet, the RVTD has also developed has been spotty throughout
Sea-Tac partners, such as its entire taxi fleet, to switch to a deep expertise in maintaining their Oregon despite incentives.
NGVs. NGV vehicles and the CNG compression Portland International Airport
Pierce Transit runs a fleet of approximately 125 buses infrastructure. They credit the success (PDX) and the Port of Portland
on CNG with a station in Tacoma. Sound Transit runs of their NGV fleet and infrastructure have 37 heavy-duty and
approximately 20 CNG buses. Waste Management in the to partnerships with Avista, Cummins four light-duty CNG vehicles
Puget Sound area has more than 200 CNG trucks, while Northwest, Veritech, and IMW Atlas. deployed. All parking lot shuttle
Allied Waste Services has approximately 90 CNG trucks On Dec. 5, 2012, RVTD celebrated the buses at PDX currently run on
on the road. CleanScapes operates approximately 40 opening of a second publicly available CNG. Additional agencies and
CNG refuse trucks in Seattle. WorldCNG, an EPA-certified CNG fueling station in the Medford area, companies have NGVs: Salem
conversion company in Renton, WA, was awarded $15 increasing fueling opportunities for local Transit runs 44 heavy duty buses
million by Clean Cities to retrofit local fleets to CNG and NGV operators. on natural gas and Oregon
recently raised $5 million in private equity for business Other agencies and companies in Department of Administrative
expansion. southern Oregon are also experimenting Services (DAS) has 179 light-duty
with NGVs. The City of Medford owns an vehicles. NW Natural currently
In eastern Washington, NWGA member Avista Utilities
NGV street sweeper, Rogue Valley Sewer has 80 light-duty NGVs and 15
has embraced CNG vehicles for its fleet, adding 18 CNG
Services just ordered a pick-up truck, heavy-duty NGVs, with plans to
vehicles in 2012 with plans for an additional 35 in 2013.
Eagle Point and the City of Phoenix both purchase 125 additional new
Avista currently operates two private CNG filling stations
own dual-fuel Ford F-150s, and Rogue CNG cargo vans over the next five
in its service territory and is engaged in discussions to
Disposal and Recycling is using a demo years. Avista is also planning to
allow for public fueling at one of its facilities, dependent
NGV garbage truck as they explore the add CNG-enabled vehicles to its
upon regulatory approval.
possibility of converting to NGVs. Fleet Oregon fleet.
Oregon adoption in this region has become a
Idaho
Policies Oregon had a Residential Energy Tax Credit possibility due to access to CNG fueling
facilities. Policies Idaho allows for state
(RETC) program that allowed qualified residents to
excise taxes paid on special fuels
receive tax credits for the purchase of new AFVs or conversion to
to be refunded for state or federal government-owned or leased
an AFV prior to Jan. 1, 2012; unfortunately, this portion of the credit
vehicles, as long as the tax was originally paid directly to a special
was not extended. The RETC continues to apply to the purchase
fuel vendor. Additionally, a state excise tax applies to special fuels
of residential alternative fuel infrastructure such as at-home
at a rate of $0.25 per gallon on a gasoline gallon equivalent; in lieu
refueling equipment. Tax credits are also available to businesses for
of paying this tax, owners of vehicles powered by CNG, propane, or
alternative fuel infrastructure and vehicles under certain conditions.
hydrogen may pay an annual fee.
Grants and loans exist for AFVs and infrastructure, such as the State
Energy Loan Program (SELP) and the Alternative Fuel School Bus Deployment highlights Within the next few years, Allied
Grant and Loan Program. Additionally, dedicated original NGV and Waste Services plans to deploy more than 50 CNG trucks in the
electric vehicle equipment are not required to have a certified Treasure Valley area of Idaho, and has opened public CNG fueling
pollution control system. Oregon and regional communities also stations at its Boise and Nampa locations. Valley Regional Transit,
15
Regional clean fleet project, http://www.oregonmetro.gov/index.cfm/go/by.web/id=38468
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As illustrated in Figure 2, the cost of conventional fuels proves Driver: Environmental Compliance
to be extremely variable and quite high compared to the price Increasingly stringent local, state, provincial and federal emission
of natural gas, which is projected to be relatively consistent and rules make NGVs a smart investment for many fleets. As stated
comparatively low moving forward.16 Tariffed natural gas provides above, NGVs reduce greenhouse gas and particulate emissions.
additional price stability to fleets; it essentially gives a fuel price This makes them an excellent, cost-effective choice for fleets facing
for the year, allowing for longer-term planning. (Although only compliance requirements. New natural gas fleets see the most
CNG prices are shown in Figure 2, LNG prices are expected to significant emission reductions, but vehicles retrofitted to burn
remain stably priced at around $2.50 per gallon, where fueling natural gas attain significant emission reductions as well.
infrastructure is available).
Tale of Two Waste Haulers: CNG Conversion
FIGURE 2. Average Retail Fuel Prices in the U.S. Trend vs. Diesel Scrubbers
of Alternative and Traditional Motor Fuel Prices from Beyond the lower cost of the fuel itself, Allied Waste in Boise,
2000-201217 Idaho, has realized significant savings in employee time and
maintenance costs following partial conversion of its fleet from
diesel to CNG:
Allieds diesel trucks are difficult to start in cold weather and
typically have to idle for 10 minutes to warm up before they
can go to work, despite being hooked up to heaters all night.
Allieds CNG trucks start up immediately in the morning,
avoiding the cost of wasted fuel from idling, expenses
associated with heaters, and the time drivers spent on the
clock waiting for their trucks to operate.
There is typically a 10 to 15 minute wait to fill up trucks with
diesel, as drivers stand by on the clock. Additionally, the diesel
trucks sometimes need to return during the workday to refuel.
The CNG trucks have enough range to stay out working all day
and, when they return, drivers hook up a slow-fill CNG line before
leaving for the day. The trucks are ready to go the next day.
Typically, used diesel oil is black from soot and other by-
products but oil from CNG vehicles comes out clean. While
NGV maintenance costs are also generally lower than those of a this allows longer intervals between oil changes, Allied has
diesel fleet. While there are costs associated with retrofitting a maintained its normal maintenance schedule for all trucks,
maintenance garage including installing proper ventilation in reasoning that it will add to the life of the CNG engines.
the roof to adequately vent natural gas as it rises maintenance Diesel fuel is transported to the Allied Waste facilities via trucks
intervals for CNG engines are longer. CNG reduces engine deposits while natural gas is delivered by Intermountain Gas to the
and oil changes are required less frequently. Additionally, CNG Allied compressor station. This reduces cost and truck traffic.
vehicles are cheaper to maintain than diesel engines retrofitted Meanwhile, in Portland, Oregon waste haulers are required to
with scrubbers: new Class 8 vehicles must meet 2010 EPA use a blend of biodiesel fuel and emission control devices in any
requirements with special equipment like diesel particulate filters collection vehicle with a diesel engine used within the city.19 Fleet
owners are working with the Portland-area regional government,
(DPF). As a result, waste haulers anticipate a $5,000 per year per
Metro, to retrofit their current fleet with special diesel filters that
truck increase in cost if they continue using diesel. The emission
scrub out particulate emissions. However, this technology is fairly
systems are complicated, maintenance-intensive, and use urea in immature and has high maintenance costs. Additionally, the
their operation, which is particularly expensive. This expense also filters are expensive and dont work on older trucks.20 In this case,
includes the reduced mileage associated with the retrofit.18 NGVs would be an excellent way for fleet managers to mitigate
their costs and comply with emissions standards.
16
U.S. Energy Information Agency, Annual Energy Outlook 2011 http://www.eia.gov/forecasts/aeo/topic_prices.cfm
17
U.S. Department of Energy Alternative Fuels and Advanced Vehicle Data Center, http://www.afdc.energy.gov/afdc/data/fuels.html
18
Heiberg Garbage & Recycling - Garbage Collection, Milwaukie, OR
19
Chapter 17.102 Solid Waste & Recycling Collection: 17.102.050 Clean and Efficient Fleet Practices for Franchisees and Permittees. http://www.portlandonline.com/auditor/index.cfm?c=28889#cid_215381
20
Metro to help garbage haulers retrofit diesels to filter particulates, Eric Mortenson, The Oregonian. May 4, 2008. http://www.oregonlive.com/environment/index.ssf/2008/05/metro_plans_to_help_garbage_
ha.html
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Challenge: Market Confidence There are models for NGV infrastructure deployment that mitigate
Past issues with NGVs create barriers to current adoption. For this risk. Because capital expenses for CNG fueling infrastructure
instance, before the large automakers entered the NGV market, are high, the best cost-to-benefit ratio for natural gas infrastructure
some fleets experimented with NGVs by purchasing retrofit kits is currently achieved by serving large fleets that return to base,
from smaller companies that eventually went out of business. as noted earlier. This includes buses, waste haulers, taxi cabs,
Maintaining the vehicles then became a problem; finding parts distributors, delivery vehicles and some corporate fleets.21 And
was challenging as was training maintenance personnel. Today, this construction may be undertaken by utilities, with regulatory
is not the case. With huge multinational companies like General support, or by private companies establishing long-term contracts;
Motors, Mitsubishi, Toyota and Ford making NGVs, finding parts and either way, the result is refueling infrastructure that can be self-
people with maintenance knowledge no longer poses a challenge. sustaining, and eventually expanded to serve the public.
However, there is also a lack of confidence that long-term fueling NGV Infrastructure: Utility vs. Private Options
infrastructure will be available. Incentives that encourage gas
The states that have seen the greatest success deploying NGV
utilities to enter the marketplace can help bridge this important
fleets California and Utah among them both involved utility
confidence gap. A history of stability and reliability combined with ownership and rate-basing of CNG fueling stations. In the 1980s
regulatory oversight to ensure fair pricing may be the deciding and 1990s, Californias Pacific Gas & Electric (PG&E) opened several
factor that prompts fleet owners to pursue conversions. CNG fueling stations to service their own fleets. In 1991, Californias
Public Utility Commission (CPUC) authorized PG&E to establish a
Challenge: Cost of Infrastructure ratepayer-funded program designed to achieve substantial market
Capital expense for a large-fleet CNG fueling infrastructure penetration of NGVs. In its decision, the CPUC cited growing
system including compression, storage and card lock concern over air quality and increasing energy imports and found
dispensers can cost anywhere between $500,000 to $3 it unlikely that an NGV industry could survive without some form of
million, depending on necessary fuel capacity and siting. At- initial public assistance.
home refueling equipment serving individual NGV owners Utah followed a slightly different path. Initially, when Questar
costs approximately $4,000 and is exclusively slow fill. There opened CNG stations in the 1980s and 1990s for its fleet and the
are additional costs up to $250,000 if infrastructure is made few private NGVs on the road, demand for CNG was fairly low.
publicly accessible. This cost is higher than other alternative fuel But in 2008, gasoline prices exceeded $4 a gallon and demand
for NGVs increased substantially in Utah due to existing CNG
infrastructure: electric vehicle charging stations require less capital
infrastructure. Private-sector companies are beginning to enter
investment per charging station, so deployment of infrastructure is Utahs CNG market, but Utahs regulators continue to support
much cheaper. However, electric vehicles do not provide the same Questars involvement.
range as NGVs, the technology is not as matu
Beyond the utility model, there are private-sector companies that
Challenge: Infrastructure Supply/Demand build and maintain CNG infrastructure with the vision of operating
Balance a vast network of publicly accessible CNG stations. Their financial
model depends on long-term fueling contracts and partnerships
Crucially, fleets and fueling infrastructure must go hand-in-
with anchor tenants. Some of these companies provide integrated
hand for each to be successful, and this has been a challenge in
fueling services such as station engineering and construction
the past. Stable infrastructure provides certainty to fleets and large along with equipment, service and support. Because the capital
fleets mitigate the financial risk for CNG infrastructure owners. In costs are fairly high, they tend to enter into contracts with large
the past, some NGV fleets depending on CNG infrastructure have fleets to mitigate their financial risk and require high returns on
been disappointed to learn that the company providing CNG their investment. Utilities may also partner with private-sector
fueling services was closing, leaving them no way to refuel their companies to provide CNG, or operate CNG fueling infrastructure
as part of an unregulated business.
vehicles. Fleets were then faced with a difficult decision: if they
have access, they can use a slow-fill pump that services only a
single vehicle overnight, or they can drive out-of-area just to refuel,
or they can sell the NGV fleet and purchase new vehicles. None of
these choices is appealing.
Report of the Alternative Fuel Vehicle Infrastructure Working Group, January 2010.
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Smaller fleets or regions with less population density do not tend Allow a Utility Ownership Model
to attract interest from such companies, simply because they
NGVs and the accompanying CNG fueling infrastructure serve the
cannot provide the economies of scale necessary to make the
greater public good by decreasing air pollution, improving public
fueling infrastructure worthwhile. Unfortunately, these smaller
health and bringing dollars into the region. But due to a number
companies and municipalities are not in a position to invest in and
of factors, the private sector has not moved to fill this gap in the
maintain CNG infrastructure themselves. Though they must still
regional market. Therefore, utilities should be able to rate-base
comply with emission standards, and though it may make financial
their participation in the CNG infrastructure market if it makes
sense for them to purchase NGVs for their fleets, smaller businesses
economic sense for their customers and business. In some cases,
and public agencies find CNG infrastructure simply cost-prohibitive.
demand might be too low to warrant such investment while in
In these instances, a utility-ownership model could make sense.
others, a utility-ownership model could accelerate NGV adoption.
Challenge: Public Access to Refueling Utilities could provide CNG services to fleets in strategic locations
Infrastructure and make these pumps accessible to the public following the
successful models seen in Utah and California. With this steady
Not surprisingly, initial investment in CNG refueling infrastructure
and available infrastructure, NGVs would be adopted more widely,
has taken place in dense areas close to main corridors and arteries.
which would likely attract private-sector interest. Additionally, a
However, as most of these are commercial fleet refueling stations,
utility-ownership model would allow regulators to regulate and set
they are not always optimally placed for eventual public access.
rates for CNG.
Many are also located in a garage or in the back of business
property, making public access impractical and a potential liability. Urban and Rural Deployment
Moving forward, siting of privately owned compressors should Successful models in Utah, California and other states follow
consider the ease of public access. For instance, instead of the back strategic geographic expansion models: they focus on regions
of the lot, a compressor could be placed near the front, where an and highway intersections where there is an ability to serve 6,000
outside-the-fence pump can be easily installed and accessed by to 10,000 passenger vehicles per year. However, there are currently
the public. Improving public accessibility could also include an only a handful of publicly accessible CNG facilities in or around
awning or roof, and a driveway that allows for cars to easily enter the regions most populous areas primarily Seattle-Tacoma,
and exit. Washington, and Boise, Idaho.
Deployment Strategy To effectively deploy CNG in the region, focus must first be on fleet
Any strategy for CNG deployment must address the symbiotic demand. As NGVs become more widely adopted, tanks of LNG can
relationship between vehicles and infrastructure: without viable be trucked to and from rural communities to meet demand. At the
infrastructure, people and companies will not adopt NGVs. date of this paper, Intermountain Gas Company has filed with the
Therefore, the Pacific Northwest states Congressional delegation IPUC for permission to begin selling truckloads of LNG to third-
and B.C.s Parliament and Senate representatives should support party users.
federal incentives for both NGV purchases and CNG fueling Additionally, propane can play a very useful role: it is currently
infrastructure. On the state and provincial level, policies and used as a transportation fuel on farms for heavy-duty equipment
incentives must do the same promote NGV adoption and the and could easily be used in more rural areas of the state as a
related economic, environmental, and energy independence transportation fuel for fleets. Eventually, a natural gas pipeline
benefits of natural gas as an alternative transportation fuel. could be installed if a community was able to help meet the
Continuing these incentives has proven crucial to Utah and capital cost of installing pipeline. For instance, Coos Bay is a fairly
Californias success. To this end, we recommend two main rural community but wanted natural gas access and constructed a
strategies to promote full deployment of this beneficial fuel and transmission pipeline using lottery and local bond funds.
technology.
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Policy Recommendations However, this is only half of the equation. State programs
need to allow qualified residents to receive tax credits for both
In addition to these specific strategies, there are a number of
vehicles and refueling equipment to ensure balanced market
actions the regions legislatures can take to promote deployment
development. This should be a priority once the economy and
of NGVs.
state/provincial budgets recover. Such tax credits could be
Tax Incentives for NGVs and CNG Infrastructure phased out as the market matures.
1. Provide alternative fueling infrastructure tax credits for 4. Focus Tax Incentives
businesses We recommend that agencies develop unique strategies
States and provinces should prioritize CNG infrastructure for deployment of tax dollars for each alternative fuel type.
development by creating or bolstering incentives to build Focusing on creating outside-the-fence units at pre-existing
new stations. For example, Oregons Alternative Fueling CNG stations as well as prioritizing and helping fleets interested
Infrastructure Tax Credit for Businesses (HB 3672) provides $20 in converting to CNG would help move the regions NGV
million in tax credits per biennium for transit services and/or market forward.
AFV infrastructure projects. Infrastructure projects may receive
Multi State/Province Agreements and Joint
up to 35 percent of costs in tax credits until Jan. 1, 2018, when
Purchasing Programs
the program is set to sunset. However, it should be noted that
this program is not exclusively for CNG: it will be shared among The regions states and provinces should seek out partnership
all alternative fueling infrastructure, including electric vehicle opportunities with neighboring states/provinces to promote
charging stations, and Oregons Department of Energy (ODOE) the deployment of CNG infrastructure and create transportation
reports that it will balance its allocations to ensure equitable corridors with alternative fueling capabilities.
treatment among all fuel infrastructure types. Splitting The Memorandum of Understanding (MOU) signed by 23 state
$20 million per biennium between all alternative fueling governors over the past two years, acknowledging the benefits
infrastructure as well as transit will not effectively deploy CNG of CNG use in state fleets, is an example of such cooperative
infrastructure in the state. We recommend Oregons legislature agreements. The document also provides the opportunity for states
increase this amount to more effectively deploy alternative to utilize their cumulative purchasing power, through participation
fueling infrastructure in the state. in joint CNG procurement requests for proposals (RFPs).
2. Promote Public Accessibility
Along with state and provincial governments, joint purchasing
State and provincial legislatures should structure their
programs are a useful tool for local governments, schools and
alternative fueling infrastructure tax credits in such a way
special districts. Such agreements allow for volume discounts
to adequately incent public accessibility. In Oregon, for
on NGV purchases and infrastructure. These efforts would also
example, private CNG infrastructure with outside-the-fence
encourage car companies to manufacture more NGVs.
accessibility was treated separately under the BETC; that is,
each piece of infrastructure received a 35 percent tax incentive. Tax Abatements & Exemptions
While this was sufficient to incent the private portion, it did
Tax abatements and exemptions would also promote CNG use by
not adequately encourage public accessibility. Legislatures
making it even more cost-effective compared with gasoline and
should consider increasing incentives for the public portion
diesel. NGV owners and fleets could be exempt from state highway
of such infrastructure, or increase the overall tax incentive to
taxes and/or fuel use charges. Additionally, Oregon NGV owners
companies and fleets that provide public accessibility to make
could be exempt from Oregon Department of Environmental
it worth their while.
Quality (DEQ) emission fees. To recapture some of this revenue,
3. Create or Strengthen Residential Incentives the state could institute an annual NGV surcharge, structured like
As CNG infrastructure becomes more widely deployed, the Idahos policy.
regions state and provincial legislatures should consider
Any franchise fees for fleet owners that convert to NGVs could also
creating or enhancing residential energy tax credits for
be reduced or waived. Also, any vehicle or company that advertises
individual AFV purchases or alternative fuel infrastructure. In
CNG and its benefits could be given a tax break.
2012, Oregon ended RETCs for AFV purchases, but maintained
them for the purchase of alternative fuel infrastructure.
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Encourage Land Provisions for CNG Stations In addition, there is general confusion among fleet owners and
local fire marshals regarding the specific upgrades required for
States and provinces can also encourage communities, counties
maintenance shops that service natural gas trucks. Clarity and
and municipalities to provide land designated for CNG station sites.
consistency in the fire codes as well as training for local fire
This would reduce capital expenses for infrastructure development
marshals would help remove some of the uncertainty related to
and send a signal to communities that CNG deployment is a
the cost of these upgrades.
priority. Land along highways or at rest stops, or land co-located
with other fueling sources, would be ideal. Conclusion
Marketing To effectively deploy NGVs and infrastructure, Pacific Northwest
states and provinces must create new incentives or renew and
Methods to promote and effectively advertise the public use of
strengthen existing incentive structures to stimulate investment in
CNG as a transportation fuel warrants substantial attention from
CNG infrastructure. Because CNG infrastructure is capital intensive
governors offices and the B.C. Ministry of Energy and should be
and differs from other types of alternative fueling infrastructure,
considered a crucial part of effective CNG deployment in the
allowing a utility ownership model on a voluntary basis is one way
region. The states and provinces should also offer assistance to any
to accelerate CNG deployment. Demand for private NGVs should
community wishing to apply for a federal grant promoting NGVs or
increase with incentives offered by the state/provincial and federal
CNG. Additionally, utilities should be permitted to promote CNG as
governments once stations are available for refueling. As NGV
a transportation fuel to their customers.
ownership increases, the economic risk associated with additional
Weight Exemptions publically accessible CNG stations should decrease, thus effectively
deploying CNG infrastructure throughout the region.
Trucks are limited to a certain Gross Vehicle Weight (GVW) on a
given roadway. Any additional weight to the truck (e.g., natural gas
fuel tanks) reduces the payload that they can carry. Fleet managers
are constantly looking for ways to minimize weight and maximize
payload.
N A T U R A L G A S V E H I C L E S : A R E G I O N A L R O A D M A P F O R D E P L O Y M E N T