Looking for ways to keep demand on pace with production, the Marcellus Shale Coalition (MSC) is proposing a $200 million program to expand natural gas vehicle (NGV) infrastructure across Pennsylvania.

In a Natural Gas Vehicles Roadmap released Tuesday, the industry group pitched the idea of a Pennsylvania Clean Transportation Corridor (PCTC), a network of fueling stations connecting major urban areas across the state and serving as a foundation for a regional transportation system for NGVs.

The proposals calls for building up to 17 fueling stations and 850 NGVs at a cost of $208 million, paid for through various public-private partnership arrangements. (The report also includes a less aggressive development plan that cuts the buildout and cost of the project roughly in half.) That would build on the limited NGV infrastructure already in place in the state, including more than 20 fueling stations.

“The private sector is going to drive a tremendous amount of this and already has been,” MSC President Kathryn Klaber said during a teleconference on Tuesday announcing the program.

While envisioning the PCTC as the foundation for a regional hub from Quebec to Chicago, Klaber said “it’s important that we put together the right road map for the Commonwealth and its infrastructure needs.”

The road map aims to harness a variety of factors unique to Pennsylvania: its location as the Keystone State connecting the Northeast and the Midwest, its large trucking industry that comes from the many warehouses and distribution centers in the state, and its position atop the prolific Marcellus Shale formation.

Marcellus Shale production is expanding rapidly in Pennsylvania. Companies in the state produced 256 Bcf from the Marcellus in the last six months of 2010, after producing 180 Bcf over the previous year, according to information from the state Department of Environmental Protection (see Shale Daily, Feb. 28).

The MSC estimates that the PCTC could increase demand by up to 5.4 Bcf over the next decade.

Looking to avoid a “chicken and egg” situation between NGVs and the fueling stations to serve them, the road map envisions using heavy-duty fleets for public works, airport operations and public transit to justify initial construction, and allowing public access to fueling stations to expand the system. While the road map lays out a five-year timeline, the MSC said the program could be implemented in as little as 18 months.

The corridor would connect Philadelphia, Pittsburgh, Harrisburg, Allentown and Scranton, and serve the major interstates in Pennsylvania, like I-76, I-80 and I-81, forming the foundation of a regional hub.

At full buildout, the MSC believes the PCTC would displace 9.2 million gallons of diesel fuel with about 1.4 Bcf of natural gas each year, saving fleet operators an estimated $9.2 million in annual fuel costs. The MSC also believes the program could create up to 1,350 jobs in Pennsylvania and improve air quality in a state with five urban areas ranked among the 25 most polluted in the country by the American Lung Association.

To help achieve the goal, the MSC is recommending policies such as incentive programs for the state and its municipalities to convert fleets and allowing single-passenger NGVs to use high-occupancy vehicle lanes, as well as revisions to existing policies, like aspects of the Clean Vehicles program that the MSC believes harm the economics of some NGVs, particularly those that run on compressed natural gas or more than one fuel.

The MSC developed the report in partnership with member companies Chesapeake Energy Corp., EQT Corp., Range Resources Corp., three of the largest players in the basin, and UGI Utilities Inc.

Although months in the works, the report comes as support for NGVs is gaining momentum nationally, getting nods from both government and industry in recent months (see Shale Daily, March 31). The report comes one day before Pennsylvania House Republicans plan to re-introduce the Marcellus Works package of legislation, which includes a push to convert state-owned vehicles to run on natural gas.