Colorado Gov. Bill Ritter on Thursday awarded two grants totaling almost $800,000 to increase the use of natural gas as a transportation fuel.

The grants are supported in part by federal funding created under the American Recovery and Reinvestment Act of 2009.

“Fueling fleets and heavy-duty vehicles with compressed natural gas [CNG] creates another market for Colorado’s homegrown energy and continues to advance the state as a national leader in the ‘New Energy Economy,'” Ritter said. “These grants will make it easier for local governments and energy companies to fuel their vehicles with CNG, reducing the use of foreign oil and increasing our energy independence while also making our air cleaner.”

The grants are being administered through the Governor’s Energy Office.

“Momentum for natural gas vehicles is building here in Western Colorado,” said David Ludlam who directs the Western Slope Colorado Oil & Gas Association. “When strong leadership at the City of Grand Junction and Garfield County combines with the governor’s vision for a cleaner transportation sector, Western Colorado’s first CNG fueling station is the result.”

One grant would provide $120,000 to the city of Grand Junction to complete a CNG fueling station for use by the city’s natural gas-powered fleet vehicles, as well as CNG-powered vehicles for use by other fleets. The city has purchased four CNG-powered garbage trucks and Grand Valley Transit is purchasing two natural gas-powered buses that will benefit from the fueling station.

A second grant would provide $675,285 to Rocky Mountain Alternative Fueling (RMAF) to develop a CNG fueling station and associated infrastructure in Rifle near Interstate 70. The station would serve the public, as well as CNG-powered fleet vehicles owned by Garfield County, Colorado Mountain College and vehicles owned by several oil and gas companies in the region. Both grants are conditional pending state and federal permits and other contracting requirements.

The Rifle station would complement another CNG station under development by RMAF in Parachute, 17 miles west. The two stations would give local CNG-powered fleets more flexibility for fueling. The Rifle station also would help open up more of the Interstate-70 corridor to CNG-fueled vehicles.

“Stakeholders from across Colorado have been working through the Colorado Natural Gas Vehicle Coalition (CNGVC) to strategically site natural gas fueling locations,” noted Natalia Swalnick, air quality/clean cities manager at the American Lung Association in Colorado. The American Lung Association is home to both the CNGVC and Denver Metro Clean Cities Coalition. “The CNGVC has been laying the foundation for natural gas by coupling planned infrastructure with vehicle commitments from local fleets.”

Colorado’s news followed an announcement by General Motors Co. (GM) last week that it will offer CNG and liquefied petroleum gas (LPG) powered versions of the Chevrolet Express and GMC Savana cargo vans to fleet and commercial customers beginning this fall.

The initial CNG offerings would be available on 2011 model year vans built at GM’s Wentzville, MO, plant with dedicated gaseous fuel systems and related vehicle calibrations completed at a separate facility, the automaker said. A dedicated LPG gaseous fuel system also would be offered to fleet and commercial customers on 2011 model year cutaway vans that can be configured into cube, delivery and shuttle bus vehicles.

“We’re listening to our fleet customers and dealers about offering options that help them achieve their business objectives,” said Brian Small, general manager of GM’s fleet and commercial operations. “The industry commitment to expand the CNG and LPG infrastructure in key fleet markets was an enabler to allowing us to introduce these options now.”

America’s Natural Gas Alliance CEO Regina Hopper said the introduction of GM’s alternate fuel vehicles for commercial use is “a major step forward” for natural gas fleets.

“This first-of-a-kind commercial scale offering is a strong step in expanding the use of vehicles that rely on clean fuels produced right here in America,” Hopper said. “Use of vehicles like the ones GM is providing can also reduce our dependence on overseas oil.”

Fleet use of natural gas-powered vehicles is gaining traction, with a deal last month for Clean Energy Fuels Corp. subsidiary BAF to convert 501 Ford E-250 Series vans to CNG power for Verizon (see NGI, April 26). Seal Beach, CA-based Clean Energy Fuels also signed a five-year contract with SuperShuttle International to provide CNG for its vehicles at major airports throughout the United States (see NGI, May 10).

Natural gas-fueled vehicles offer the strongest foreign oil-displacement message of all alternative fuels, and while there are only about 120,000 now on U.S. roads now, they’re a growing force for energy independence and cleaner air, Richard Kolodziej, president of Natural Gas Vehicles for America told attendees at GasMart 2010 in Chicago earlier this month (see NGI, May 17).

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