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Multi-State CNG Effort Drives Bids from Detroit, Overseas

Governors last week fast-tracked efforts to makeover statewide fleets with natural gas vehicles (NGV), announcing Friday that more than 100 bids were issued in the 22-state effort, with Chrysler, Ford, General Motors and Honda all wanting in on the action.

The preliminary results were announced by Oklahoma Gov. Mary Fallin and Colorado Gov. John Hickenlooper at the Governor's Energy Conference Thursday in Oklahoma City. A year ago Fallin and Hickenlooper launched the effort. In August, at the urging of Fallin and Hickenlooper, U.S. auto manufacturers came to Oklahoma to learn more about a request for proposals (RFP) that was launched by the states, all of which want to buy NGVs (see NGI, Aug. 13).

As a result of the RFP, Fallin said Oklahoma and other states can expect to see cost reductions and operating savings on all types of vehicles powered by compressed natural gas (CNG), including pickup trucks, vans and compact sedans. The expected savings range from 4% to 16% on purchase prices and $1,200 to $5,800 per vehicle in annual operating savings.

"Additionally, states will now have the opportunity to purchase at least one model truck with improvements in functionality," said Fallin. She citing a pickup truck with a CNG fuel tank underneath the vehicle rather than in the truck bed. The effort has been "enormously successful," with the auto industry responding with vehicles that are "more affordable and functional...With the combined purchasing power of our 22 states, we successfully provided the incentive to do so. States will now have the incentive and ability to begin converting their fleets to CNG while saving millions of dollars in taxpayer money."

Hickenlooper called the RFP "a major success for CNG, and even more important, for our economy."

Wyoming Gov. Matt Mead, whose state is part of the RFP effort, last week said Wyoming hopes to get up to 283 natural gas-powered vehicles through the RFP and eventually replace more than 1,000 of its vehicles with NGVs.

Wyoming joined with the other states in this venture because of the "chicken-egg" conundrum concerning fueling infrastructure and vehicles, said Mead. "No one wants to build the infrastructure until you have the vehicles, and we have this abundance of this great fuel source [natural gas] so we went to Detroit to see if we could get this thing off the dime. The hope is that not only will it save us money, but it will provide a clean fuel source. We've seen different towns and counties in Wyoming express an interest, too."

However, he cautioned that the public sector push should not get ahead of market responses. As an example, he noted that the Wyoming legislature passed a law to allow for an NGV fueling station on the University of Wyoming campus, but the law specified that the university do it through a public-private partnership.

"I'm interested in the concept of NGVs, but I think we have to be very careful about getting ahead of the private sector on this. This effort should always continue to be a market-based solution or not. You cannot subsidize your way to results on this. We want to stimulate it by what we [the combined states] are doing with this coalition, but either it is going to work with the market approach or it won't. I believe it will, and by [Wyoming] expressing our interest, the private sector will decide maybe there is an opportunity here. I don't think a state can do much more than that."

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