An executive with a Portland, OR-based heavy-duty truck maker told a Senate energy panel Tuesday that he and his competitors could manufacture as many natural gas vehicles (NGV) as needed if only Congress delivered on the refueling infrastructure.
The issue of what should come first, “the chicken [NGV] or the egg [infrastructure] is dead,” said Robert Carrick, sales manager for natural gas for Freightliner Trucks, at the first of three roundtable discussions held by the Senate Energy and Natural Resources Committee. “Freightliner and all of our colleagues in the industry will hatch you all the chickens you want. [But] we need a place to feed them.”
He said a lack of a national network of natural gas fueling stations is a “leading obstacle” currently facing NGV development. Fewer than 1,200 compressed natural gas (CNG) stations exist in North America, and of those only about 300 are what would be called truck friendly, meaning that a truck could fit on the site and be fueled at a rate of at least five gallons per minute.
On the liquefied natural gas (LNG) side, there still are only 50 stations presently that are open for retail fueling, which Carrick said is critical for long-haul fueling. By comparison, there are more than 125,000 diesel and gasoline stations in North America.
“America’s natural gas highway is being built,” although at a slow rate, said Jim Arthurs, president of Cummins Westport Inc., builder of natural gas engines for trucks and buses.
Natural gas provides 27% of the energy consumed in the United States, but less than 3% is being used in the transportation sector, he said. Arthurs urged Congress to remove certain disincentives to spur the use of natural gas in transportation: 1) eliminate the federal excise tax for LNG, which is 70% higher than that for diesel; cut the tax on new gas trucks, which is $4,000-12,000 more than that for a diesel truck; and adjust the current highway weight limits, which penalize NGVs, according to Arthurs.
The incremental cost of an NGV is “very, very expensive,” from $45,000 to $60,000.
“We are trying to put together a working group that…[will look at] creative ways” to address the NGV infrastructure issue, said Gregg Kantor, president of Northwest Natural. He said he hopes to have the group together by June.
Steve Bolze, president of General Electric Power & Water, said he sees a real potential to do something in the short term,” but “we’ll see” if it will be by June. “We have a couple of targeted pilot areas.”
Committee Chairman Ron Wyden (D-OR) said he would like to have something from the panelists to present to the Democratic and Republican members of the Committee.
While the roundtable discussion focused on NGVs, officials also cited the need for more pipeline capacity. Last winter, the New England region saw price spikes in the area of $30, while the rest of the country was able to get gas for $3-4/Mcf. “I think we’re going to be in this phase for several more years because there are some new pipelines being considered, but they’re unlikely to be in operation before 2017,” said Gordon van Welie, president of ISO New England.
The region needs more gas pipeline infrastructure to handle the gas from the Marcellus, more storage capacity, and power generators must develop dual-fuel capability, he said.
The head of the Interstate Natural Gas Association of America called on Congress to support pending legislation that would streamline the permitting of interstate gas pipelines. The group endorsed measures offered by Reps. Mike Pompeo (R-KS) and Tom Marino (R-PA) that would require federal agencies to complete their work by a date-certain after the Federal Energy Regulatory Commission issues a certificate (see Daily GPI, May 13).
Federal agency permits that used to take 30-90 days to issue are now taking 18 months, and projects that were executed in 12 months are now taking up to three years, said Richard Cargile, president of the midstream division of Energy Transfer Co., who spoke on behalf of the Gas Processors Association.
Jesus Sotoi Jr., senior vice president of gas transmission operations for Pacific Gas & Electric Co., said the company has invested $1.4 billion on upgrades (in-line inspection tools, 67 shut-off valves and other improvements) to make its pipeline the “safest pipeline in the country” following the explosion in San Bruno, CA (see Daily GPI, Oct. 29, 2010).
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