Natural gas industry stakeholders are turning up the volume on the clean transportation market as an increasingly realistic outlet for the gusher of gas that is emerging from North America’s burgeoning shale plays. This was made clear during the recent winter meetings of the National Association of Regulatory Utility Commissioners (NARUC) in Washington, DC.

State regulators heard from utilities, gas suppliers and fleet operators, and all of the talks were bullish about the potential for compressed natural gas (CNG) and liquefied natural gas (LNG) as a transportation fuel, although they acknowledged that more work by the industry and regulators will have to be done to turn the potential into real changes in transportation fueling.

Utilities are going to have to do more, according to Hal Snyder, a Southern California Gas Co. (SoCalGas) vice president, who addressed the NARUC gas committee. SoCalGas is planning a bigger commitment supporting industry programs that are expanding, according to Snyder, who quoted California officials as calling for both private- and public-sector utilities to add major investment to the natural gas transportation space.

While California where his Sempra Energy utility operates is leading the charge, Snyder said a more national effort is needed in setting policies and regulations that he said will “level the field” more for natural gas in transportation, along with addressing national fueling infrastructure needs, providing more incentives for greater utility involvement, and getting the natural gas industry and vehicle manufacturers into closer collaboration.

SoCalGas plans to file this quarter with California state regulators for a special “compressional tariff service” to offer its customers as a means of widening the natural gas transportation fuel market, Snyder said. It will allow for utility-owned CNG compression units that can help capitalize on the utility’s financial strength, know-how and stability.

Also addressing NARUC was Jerome Webber, an AT&T vice president in charge of the firm’s fleet operations, who said his company will continue its commitment to CNG as evidenced by its 2,472 fleet vehicles now running on natural gas, with 1,662 in California, and plans for spending $565 million to deploy up to 15,000 clean fuel vehicles, most natural gas-powered, but with a mix of electric vehicles and hybrids, too.

Connecting with some 300 million customers globally on a typical day, AT&T operates a fleet of more than 73,000 vehicles, Webber said.

From the suppliers’ side, Encana Natural Gas Inc.’s David Hill touted the economic, energy security and environmental benefits for putting more natural gas into the transportation sector. He made a presentation to NARUC and also contributed to part of the Colorado Oil & Gas Association’s (COGA) bullish report, “Natural Gas 360.”

“The best estimates from NGV America predict natural gas usage will grow from 300 million gasoline gallon equivalents (GGE) in 2009 to 10 billion GGE in 2020,” Hill said in the COGA report. “This represents the displacement of about 20% of the petroleum expected to be consumed in the United States.”

In reality, however, Hill said the North American trucking industry is going to have to play a vital role, along with fleet operators like AT&T, which has made a strategic investment commitment to natural gas in its vehicles. “With the amount of diesel fuel consumed each year, diesel displacement by LNG could significantly curb U.S. dependence on foreign oil, reduce harmful emissions and create more jobs domestically as natural gas production increases,” Hill said.

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