The Car and Truck Fleet and Leasing Management Magazine

Drive for Natural Gas Vehicles Faces Big Test in California

August 12, 2008

SAN FRANCISCO– The notion of spending taxpayers' money to help fill U.S. roads with natural gas-fueled vehicles faces a major test when voters in California, the nation's largest auto market, go to the polls in November, according to Natural gas providers are spending millions of dollars on advertising to convince Californians to pass a ballot initiative allowing the state government to invest in the now-tiny market for natural gas-fueled cars and trucks. The push comes as gas producers, emboldened by a windfall of domestic production, press federal lawmakers to help expand the market for gas as a means for reducing dependence on foreign oil and cutting greenhouse-gas emissions.

If the California ballot initiative passes, up to a million vehicles fueled by compressed natural gas, or CNG, could ultimately end up on the state's roads. If Proposition 10 fails, backers will face a tougher task selling authorities on the wisdom of investing in infrastructure for natural gas-fueled vehicles, compared with spending on biofuels or electric cars and trucks.

So far no opposition has been organized against the proposal, which would authorize the state to sell $5 billion in bonds to fund rebates of $2,000 to $ 50,000 each to people who purchase natural gas-powered cars and trucks. Some of the money would be earmarked for research, development and production of renewable energy technology, and education. The plan would cost the state $9.8 billion over 30 years.

Among the most prominent backers of the Prop. 10 is Texas billionaire oilman T. Boone Pickens, who is founder and chairman of CNG provider Clean Energy Fuels Corp. (CLNE). Pickens, along with Chesapeake Energy Corp. (CHK) Chief Executive Aubrey McClendon, has contributed a total of $3.7 million to support Prop. 10. Both Pickens and McClendon have testified before Congress in the past two weeks, pressing lawmakers for a bigger role for natural gas in the nation's fuel supply amid booming production from places like the Barnett Shale in Texas and the Haynesville Shale in Louisiana and eastern Texas, according to

The executives had already gotten the attention of Rep. Rahm Emanuel, D–Ill., who introduced a bill that would provide tax credits for the purchase of natural-gas vehicles and home-refueling systems, and credits to encourage gas stations to install natural-gas pumps.

The industry's goal is to replace 20 percent of the diesel used in the U.S. with natural gas by 2025, about 10 billion gallons, or 1.3 billion cubic feet. 

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