Varying levels of support and caution regarding a national shift to increased use of natural gas vehicles (NGV) were offered Tuesday from a panel of five experts testifying at a hearing of the U.S. Senate Energy and Natural Resources Committee. Experts and the senators alike shied away from calling for reconsideration of national legislation to boost NGVs.
Parity with other alternative transportation fuels was emphasized by the strongest NGV advocates and more reliance on markets rather than federal policy was recommended by the industrial and national energy research representatives in addressing Sen. Jeff Bingaman (D-NM), the committee chair, and his colleagues. Lawmakers are gathering information on what federal policy changes might be needed in light of the current boom in domestic gas supplies. "This is not a hearing to support any specific piece of legislation," Bingaman said.
As expected, representatives from the American Gas Association (AGA) and vehicle and engine manufacturing sectors were the most bullish about NGVs, while a representative from the Industrial Energy Consumers of America (IECA) called on the federal government to refrain from "picking winners and losers" in the alternative transportation fuel space. Most committee members sounded skeptical about the need for federal legislation on NGVs.
Sen. Lisa Murkowski (R-AK) said the federal government needs to "exercise a great deal of caution" regarding future forms of government intervention. "I am actually concerned that some forms of government intervention may actually cause more harm than good," she said, referring to environmental regulations as an area for potential concern.
Murkowski warned against future policies that might jeopardize continued robust investment in upstream natural gas resources, saying federal programs could interfere with what NGV advocates are saying is a "sound and improving state-based regulatory system."
AGA CEO Dave McCurdy urged the use of domestic natural gas to diversify the U.S. transportation fuel mix and reduce the nation's oil imports, asking that some tax and other policies that favor one alternative fuel choice over another be changed to make them fuel neutral. McCurdy stopped short of suggesting the federal government mandate a national fueling infrastructure for NGVs, something that was strongly opposed by another witness, David Greene, a corporate fellow with the Oak Ridge National Laboratory in Tennessee.
From the vehicle sector, both Michael Gallagher, with NGV engine manufacturer Westport Innovations Inc., and Reg Modlin, from Chrysler Group LLC, cited technology and manufacturing advances that are bidding to cash in on abundant, cheap gas supplies. Gallagher said an industry-backed study assessing all transportation fuels that he called the "most comprehensive analysis ever performed on U.S. transportation options" will be released next week.
Gallagher, who chaired the two-year study for the National Petroleum Council's (NPC) natural gas group, said the analysis "assessed every technology involved in NGV transportation, identified every conceivable barrier to expansion and identified their resolution." Technology advances are happening daily in the NGV transportation sector, he said.
Reg Modlin, Chrysler director of regulatory affairs, said his company believes NGVs have "strong potential to compete in the retail alternative fuel market" and that abundant gas supplies "could be a game-changer." But he outlined challenges ahead in the form of fueling infrastructure and a wider variety of vehicle offerings.
Greene and Paul Cicio, president of IECA's group of large energy-consuming manufacturers, articulated a less bullish case for NGVs that places more emphasis on markets ahead of government incentives. Greene cautioned that while U.S. gas supplies are robust, they are not enough to satisfy all of the nation's energy needs, and said that today's low gas prices are not likely to last.
"It probably would not be worthwhile to deploy a full-scale natural gas refueling infrastructure," Greene said. Because gas is not free of greenhouse gas (GHG) emissions, a full-scale NGV infrastructure put in place by 2030 "would have to be substantially dismantled by 2050" to achieve GHG reductions of 60-80%, he said. "A large-scale shift to natural gas for transportation would be a mistake, in my opinion," he said.
Cicio said his organization is not opposed to the use of NGVs, but it opposes legislation or regulation providing direct or indirect incentives resulting in higher demand for natural gas. That would raise concerns about higher gas and electricity prices for IECA's energy-intensive members, he said.
"Our studies and analysis show that the market is working, and government intervention is not needed," said Cicio, adding the caveat that IECA is becoming increasingly concerned about the increased demand and "increased global reliance" on natural gas. The fear is that "explosive demand" could rapidly shrink current surpluses and drive up energy prices.
"Total demand for natural gas could increase 45% over the EIA [Energy Information Administration] base case for 2012-2020," Cicio said.
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