AT&T will invest up to $565 million in an effort to deploy more than 15,000 alternative-fuel vehicles over the next 10 years, the company said last week. The giant communications holding company said it expects to spend an estimated $350 million to purchase about 8,000 compressed natural gas (CNG) vehicles and approximately $215 million to begin replacing its passenger cars with alternative-fuel models.

AT&T said its investment represents the largest U.S. corporate commitment to CNG vehicles to date. The deployments will bring the company's alternative-fuel fleet to more than 15,000 vehicles by 2019.

"AT&T and other U.S. corporations have a unique opportunity to partner with the new administration as it works to lead the country out of this economic downturn," said AT&T CEO Randall Stephenson. "While there are no easy solutions to the challenges facing our nation, this investment is a first step on our part to help boost other industries while at the same time encouraging wider use and production of efficient vehicles and domestic fuel alternatives."

Breaking down AT&T's commitment, the Center for Automotive Research (CAR) estimates that the new vehicles will save 49 million gallons of gasoline and reduce carbon emissions by 211,000 metric tons over the 10-year deployment period, which is equivalent to removing the emissions from more than 38,600 traditional passenger vehicles for a year.

Over the next five years AT&T said it will replace about 8,000 gasoline-powered service vehicles with vehicles powered by CNG. CNG vehicles are expected to emit approximately 25% less greenhouse gas emissions than those powered by gasoline.

AT&T's announcement was music to the ears of billionaire T. Boone Pickens, who has been pushing for more natural gas-fueled vehicles to reduce U.S. dependence on foreign oil (see NGI, July 14, 2008). Some transportation groups -- such as American Trucking Associations -- are not sold on the plan (see NGI, Feb. 23).

"I have long believed that reducing our dependence on foreign oil and securing America's energy future requires more than action in Washington, but [also] strong leadership from the private sector," Pickens said. "AT&T's decision today to upgrade 8,000 of its fleet vehicles to run on natural gas is a demonstration of real American corporate leadership that will be good for their bottom line, the environment and the country."

Pickens said the action should send a strong signal to other companies and to Washington that not only is switching to natural gas vehicles "the right thing to do, it is the smart thing to do." The oil tycoon reiterated his call to implement a real national energy policy that will reduce U.S. dependence on foreign oil through use of natural gas in the country's transportation system while rebuilding the energy grid to tap into renewable sources of energy.

AT&T said the vehicle chassis will be built domestically by a U.S. automotive manufacturer and that the communications company will work with domestic suppliers to convert the chassis to run on CNG. AT&T said it also will work with natural gas service providers to build up to 40 new CNG fueling stations across its operating region to provide the fueling infrastructure needed for the new vehicles. CAR estimates that nearly 1,000 jobs will be created or saved each year for five years.

As it begins to retire gasoline-powered passenger vehicles in its fleet, AT&T has committed to replacing them with alternative-fuel models. AT&T expects to replace 7,100 passenger cars over the next 10 years. The alternative-fuel vehicles, which will be used by employees in a variety of diverse work functions across AT&T's operations, are expected to offer up to a 39% improvement in fuel economy and to reduce greenhouse gas emissions by up to 29%. During the initial phase of the deployment, gasoline-powered passenger vehicles will be replaced with hybrid models. As technologies evolve, additional alternative-fuel vehicle types will be considered for inclusion, the company said.

"Economic times are tough, but tough times make it even more important to look for efficient solutions," said Stephenson. "This is part of a long-term strategy that will help us continue to cut operating costs, reduce emissions in the communities we serve and make our business even more sustainable."

During 2009 AT&T will deploy nearly 800 of the CNG and hybrid electric vehicles. Wednesday's announcement follows AT&T's deployment of 105 alternative-fuel vehicles in more than 30 U.S. cities in June 2008. In addition, AT&T piloted four Ford Escape hybrids, which were deployed in late 2007 in California.

©Copyright 2009 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.