John W. Somerhalder II., new board chairman of the American Gas Association (AGA) sees an opportunity for natural gas as a transportation fuel.
"The economics are moving in a very favorable direction" for natural gas to steal some market share from oil in the transportation sector. "With the gas prices today, compared to oil prices, it's looking favorable for us," Somerhalder, who also is CEO of AGL Resources, told reporters in a briefing Friday.
"It's not something that you start out by necessarily saying 'let's put a natural gas vehicle in every home,' but there are very good technologies available today for heavier fleets, where you have central fueling points. It's not that we ultimately couldn't get to more natural gas vehicles in more homes, but a good starting point would be on larger fleets. And the right tax incentives...could help the industry build the critical mass to put in the infrastructure and the filling stations, to make sure the manufacturers can get the economies of scale.
"The technology's there today, but it's obviously important that we have enough orders to drive those costs down. The incentives to move that to a point where the economics stand on their own would be very important...You'll have cost benefits once you get the infrastructure in place. I think that's something that we could get people to rally around, and that's one of our focus areas, to see if we can get the appropriate incentives and credits for natural gas vehicles, especially in fleet applications."
Advancing the role of natural gas in the energy debate in Washington isn't always easy. "Even though we'll have positive comments -- very positive comments -- from this administration about the role natural gas can play...we tend to then get ignored once we go to the actual debate and setting policy and legislation. If we're not very active, we tend to get ignored on that," Somerhalder told reporters Friday.
"When you look at the role that natural gas can play in helping this economy and meeting the energy needs of the U.S., we are remarkably well positioned," Somerhalder said. "When you look at our energy needs, it's everything from energy security, to portability, to how clean the energy is -- and lately, there's been a lot of focus on jobs and economic stimulus -- and when you look at natural gas, we are remarkably well positioned on those four issues."
Besides its priority issues of pipeline safety and funding for the Low-Income Home Energy Assistance Program, AGA will be working in Washington to ensure that natural gas plays a role in backing up renewable energy sources and becomes a more significant part of the transportation fuel mix, Somerhalder said.
AGA also will remain focused on some familiar issues, including one of the most contentious issues of the past few years -- climate change legislation -- Somerhalder added.
"I think what you saw from us last year was that we were willing to be at the table and talk about how we could move forward on climate change and other issues. The priority on that issue has changed from last year...But still as a group we're willing to be at the table and make sure that what is accomplished in that area is appropriate for the natural gas industry and is appropriate for our consumers and the country and the economy. We always want to be a productive player on climate change."
On pipeline safety, "even though our industry is remarkably safe by any measure and by any standard in the transportation industry...we still have tragedies. They still occur, and it is incumbent upon us to always as an industry work to improve all of our operating methodologies, our ability to inspect pipelines [and] to implement the things that continue to make the industry even safer than it is."
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