Natural Gas Cars Finally Getting Federal Attention, T. Boone Stoked

naturalgasvehiclebusAfter being largely snubbed by the stimulus package and so far, the climate bill, T. Boone Pickens’ natural gas vehicle mantra (backed by a $58 million marketing campaign) looks like it’s finally starting to be heard on the Hill. This afternoon Sens. Harry Reid (Majority Leader), Robert Menendez (D-NJ) and Orrin Hatch (R-Utah) said they’ve introduced legislation called the Nat Gas Act aimed at encouraging the development and purchasing of natural gas vehicles (check out 10 Things You Should Know About Natural Gas Vehicles). Of course Pickens was there for the event and made a typically aggressive statement claiming that the legislation would “do more to reduce our foreign oil dependency crisis than any other piece of legislation in the past 40 years.”

The introduction of the legislation today isn’t random. A version of the bill was introduced in the House earlier this year, but now proponents of the legislation hope that it could get wrapped up in the Senate version of the climate bill, explained Richard Kolodziej, the president of NGVAmerica, a natural gas vehicle trade group. Kolodzieji thinks that’s a decent possibility given that Sen. Reid, who co-sponsored the Nat Gas Act, also co-sponsored the climate bill.

Getting the legislation introduced is a big deal for T. Boone, too, particularly in light of yesterday’s news that his plan to build the world’s largest wind farm was getting buried alongside MJ. While the legislation isn’t the first to provide incentives for natural gas vehicles (Sen. Hatch introduced the Clear Act in 2005) it’s one of the first to specifically focus on getting more natural gas vehicles on the market.

There are several strong arguments for why there should be more natural gas vehicles on the roads: Natural gas vehicles produce 20 percent less greenhouse gas emissions than standard vehicles, the U.S. has a lot of its own domestic natural gas, and the technology for powering a vehicle with natural gas is already available. The arguments against supporting more natural gas vehicles include the fact that alternative transportation technology like electric vehicles can offer a greater drop in emissions (natural gas is a fossil fuel), and it can be more expensive to convert a standard vehicle to natural gas than it is to run it on first-gen biofuels, which offer the equivalent emissions reductions. No doubt natural gas vehicles are a promising technology, but is it the best technology to invest in right now? And will it gain traction with truck fleet owners, enterprise and government fleet owners, car manufacturers and even consumers?

Here’s what the Nat Gas Act proposes to do:

  • Extend the alternative fuel credits for purchasing both natural gas vehicles and fueling stations by a decade.
  • Expand and modify the alternative fueled vehicle and refueling property tax credits for natural gas vehicles.
  • Increase the purchase tax credit cap for producing and converting natural gas vehicles to $12,500 (up from $5,000) for light-duty vehicles, and double it for other vehicles. Also increase the refueling property tax credit from $50,000 to $100,000 per station.
  • Enable state and local governments to issue tax-exempt bonds to finance natural gas vehicle projects.
  • Give grants for natural gas engine development.
  • Enable any natural gas vehicle manufacturing facility that goes into service before January 1, 2015, to be able to expense 100 percent of the costs and treated as a tax deduction for the year it goes into service. Basically accelerate the depreciation to the first year. That drops to 50 percent of the costs for any natural gas vehicle manufacturing facility after that time and will be phased out by January 1, 2020.

Of course the legislation has only been introduced, and if it doesn’t get wrapped up in the climate bill, it will have to make its own way through the House and Senate to be merged and voted on.

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