In a week’s time the bullishness for natural gas as a transportation fuel moved up considerably, with the Obama administration and industry promoting the increased use of natural gas-fueled vehicles.

President Obama gave natural gas vehicles (NGV) a big push last week with his expansive endorsement of natural gas. The Environmental Protection Agency became an advocate as well, issuing revised rules to ease the conversion of vehicles to run on compressed natural gas (CNG) (see related stories).

“At a time when oil prices are once again steeply rising and businesses and consumers are looking for real solutions to ease their pain at the pump, the action by EPA could not be more welcome,” said Richard Kolodziej, president of Washington, DC-based NGV America.

Last Friday, the president also threw his support behind clean transportation fuels generally, lending his support to a public-private partnership working to get large commercial vehicle fleet operators to “significantly” reduce their petroleum use. The National Clean Fleets Partnership was unveiled with the underlying theme to develop “proper incentives” to reduce the use of gasoline and diesel.

“The public-private partnership will help large companies reduce diesel and gasoline use in their fleets by incorporating electric vehicles, alternative fuels, and fuel-saving measures into their daily operations,” said a spokesperson for the partnership, noting the U.S. Department of Energy (DOE) will help fleet operators as part of its ongoing Clean Cities program.

Outside of Washington, DC, other efforts are building support for NGV. Atlanta-based PS Energy Group has signed a long-term contract with California-based Clean Energy Fuels Corp. to expand the use of natural gas for transportation in Georgia as part of the larger Clean Cities Atlanta Petroleum Reduction Program. Both fleet and individual vehicles are expected to benefit from the deal.

Under a 15-year agreement, Clean Energy will develop and operate CNG facilities at PS Energy Group’s metropolitan Atlanta fueling stations, or “unattended fuel outlets.” Construction is to begin in the second quarter at the PS Energy Group’s fueling stations.

Ford Motor Co. also reported that demand was rising for CNG vehicles, and it is an option for the company’s Transit Connect E-Series vans and F-Series super duty trucks. “The least-expensive way to get into a CNG vehicle at a Ford dealership is in a base Transit Connect model that includes a $315 package converting the van to CNG or liquid propane gas,” said a Ford spokesperson.

Ford said that government incentives for CNG vehicles are one reason for CNG “slowly growing in acceptance” as an alternative transportation fuel, even though refueling stations are not as widespread as gasoline stations.

From a pump price standpoint CNG currently has the advantage of being a low-priced fuel with lower emissions than its competitors. DOE’s Clean Cities Alternative Fuel Price Report for January cited the per-gallon equivalent price for CNG as $1.93, compared with more than $3/gallon for regular gasoline at the pump.

Similarly, Honda America continues to offer a CNG version of its Civic sedan model, although at what the car maker conceded is a somewhat costly $26,200 for a compact model. But Honda stresses that the vehicle offers gas-equivalent mileage of 24 mpg and 36 mpg in the city and highway, respectively. Honda said it expects the 2012 Civic model’s fuel efficiency to reach 39 mpg. For nonfleet, noncommercial car buyers, Honda’s Civic remains one of the few factory built CNG vehicles.

Also on Friday producer Apache Corp. said it expects to have a CNG refueling station in service in two to three months to serve a fleet of 30 buses that carry passengers to and from Houston’s Bush Intercontinental Airport.

“At Apache, we are convinced that clean-burning natural gas must be a bigger part of the solution to America’s ever increasing reliance on imported crude oil, while reducing pollution caused by other, more carbon-intensive fuels used in transportation and power generation,” said CEO G. Steven Farris. In North America Apache is a top natural gas producer, with a balanced portfolio of oil and gas assets concentrated in the Permian Basin, Canada and the Gulf of Mexico (GOM). At the end of 2010 Apache’s estimated proved reserves were 56% natural gas and 44% crude oil and liquids.

Apache’s role is to build the station, which would be turned over to the city once construction is completed, Apache spokesman Bill Mintz told NGI. Clean Energy Fuels would be the station operator.

“CNG is a better way to move people and goods than our traditional petroleum fuels,” Farris said. “In fact, at Apache we’re doubling down on our use of CNG. This year we’re going to double the size of our CNG-powered vehicle fleet and double the number of CNG stations we operate. To encourage further CNG use, we’re also implementing an incentive program to encourage our employees to acquire CNG vehicles.”

Apache’s refueling station plans had been in the works for two years under a partnership with the Houston Airport System, New South Parking and Clean Energy Fuels, Mintz said.

“Apache approached the city about ways we could help expand the use of natural gas as a transportation fuel,” Mintz said. The city-owned airport system “was exploring ways to increase its use of alternative fuels…”

The airport refueling station, which is expected to cost Apache about $1.5 million to construct, would be used by the city’s bus system to shuttle people to and from the city-owned economy parking lot, which is being relaunched as an “ecopark,” Mintz said. “This shuttle fleet travels about 1.4 million miles per year. Fueling will take about the same amount of time it takes to fill the older buses with diesel. The station has enough capacity to meet additional demand if other shuttle operations adopt CNG as their alternative fuel of choice; there is also space to expand the facility if warranted.”

At the end of 2010 Apache had converted 111 of its U.S. fleet vehicles to bi-fuel (CNG or gasoline) operation, Mintz said. “By year-end 2011 we plan to have a total of 231 fleet vehicles converted, about 26% of our U.S. fleet. Our target by year-end 2015 is to have over 80% of our U.S fleet vehicles powered by CNG.” Apache pays about $10,000 to convert each of its fleet vehicles. “Our refueling stations have cost about $600,000 to $1.2 million, depending upon station design capacity and whether we needed to acquire land for the facility.”

Apache’s CNG stations today are used only to refuel its fleet vehicles. However, the company is planning to open “public-access stations in Houston, Lafayette [LA], Midland [TX] and Tulsa — cities where Apache has a significant employee presence,” he said. To encourage its workforce to switch to alternative fuel vehicles, the Houston-based producer also will offer an incentive program to its employees “in the near future,” Mintz told NGI. “We plan to offer Apache-provided fuel and reimbursement of 50% of the incremental cost of the CNG-dedicated or converted vehicle, from either Apache or state tax incentives.”

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