About C$1 billion spent over seven years in the form of tax incentives and rebates could accelerate the shift to using natural gas in Canada’s vehicles, industry and advocacy groups, including EnCana Corp., said this week.
The Canadian Natural Gas Vehicle Alliance (CNGVA) is leading the initiative to install natural gas vehicle refueling stations along Canada’s main transportation corridors. Calgary-based EnCana, the largest gas producer in Canada and a member of the alliance, is one of the members supporting the call for federal support.
The C$1 billion figure is a hypothetical amount of what it may cost to begin building infrastructure and to offer incentives and rebates to take advantage of growing supplies of natural gas across North America, said EnCana. However, the “reception is good” from government officials, said Eric Marsh, EnCana’s executive vice president of natural gas economy.
Marsh said the plan was “a big step. We’ve moved into a new time period where natural gas is going to be abundant and affordable, and we need to explore these ideas to use natural gas a lot more than we have in the past.” EnCana wants to “push forward” to help natural gas become “an acceptable fuel for the future.”
CNGVA President Alicia Milner said the talks with Canadian government officials are ongoing. As currently envisioned, transportation corridors from Edmonton to Vancouver and Highway 401 in southern Ontario would be the first to see stations for natural gas refueling. Those stations would cater mostly to commercial vehicles, Milner said.
In addition, the alliance supports a plan to enact tax incentives and grants to encourage businesses and municipalities to switch their commercial fleets to natural gas. The tax credit would be similar to one offered in the United States, where all 50 states offer up to US$32,000 in tax credits to truckers that switch from diesel fuels.
According to the Canadian Energy Research Institute, “Many heavy vehicles operate in a return-to-base mode, where vehicles return to the yard at the end of the shift. This fleet model offers a particularly good fit for natural gas since refueling infrastructure investment can be minimized. In addition, heavy vehicles are typically bought on specification, so customer fuel and range requirements can be met as with a diesel vehicle.”
Enbridge Inc.’s 812-vehicle natural gas fleet is the biggest in Canada, but officials are cautious about a plan to build a natural gas super highway.
Natural gas-based fuels have “some reasonable potential,” Enbridge CEO Pat Daniel told Canadian reporters recently. “The biggest challenge will be the investments required by truckers in order to be able to convert to natural gas, and the economics of that don’t look overwhelming.”
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