INDIANAPOLIS - Indiana has launched a major alternative fuel vehicle conversion project that includes the conversion of about 900 vehicles as well as infrastructure improvements.

The $22.8 million project includes a $10.1 million federal grant announced by Lt. Gov. Becky Skillman last year. The project is a joint effort of the Indiana Office of Energy Development (OED) and Greater Indiana Clean Cities Coalition (GICCC).

"It's great to see not only state government but our partners in industry stepping forward to help reduce our use of foreign sources of energy," said Skillman. "The fact that this could create more jobs for Hoosiers makes it even better."

"We're calling this project, 'No Silver Bullet, But a Lot of Silver Beebees," said Kellie Walsh, executive director of GICCC. "The goal is to displace 1 million gallons of petroleum each year through the use of alternative fuels. This project will also create as many as 200 jobs."

Along with OED and GICC, the project has eight partners:

* Indiana Department of Transportation
115 propane fueling sites across the state
Retrofit of 200 F250s to AutoGas (propane)
Implementation of compressed natural gas (CNG) dump trucks

* City of Indianapolis - 10 Propane F150s, alternative-fuel vans for Marion County Sheriff's Department, and 25 hybrid light-duty vehicles

* Citizens Energy - Upgrade of compressed natural gas fueling station

* Lassus Brothers Oil - Three E85 fuel locations around Ft Wayne

* City of Ft. Wayne
Use of E85 stations for police fleet fueling
Implementation of light- and medium-duty hybrid trucks

* KAKCO - Upgrade to CNG station

* Sysco Distribution - Implementation of 57 hybrid trucks

* RUAN Trucking - New CNG station in Clarksville, Ind., and the purchase of a Class 8 CNG Semi

The basis of the project is a $10.2 million federal grant announced by Skillman last year. The grant is administered by OED, which Skillman oversees, and managed by GICCC.

Along with helping purchase or convert vehicles, the project will also support E85 ethanol retail infrastructure and create a compressed natural gas corridor from Gary to Clarksville.

"This is where we put words into action," said OED Director Brandon Seitz. "This project will show that government can empower the private sector to make a difference, right now, in the amount of foreign oil we buy and consume."

The city of Indianapolis is one of the major partners in this project, bringing 10 propane-powered Ford F150 pickup trucks and 25 hybrid light-duty trucks on line.

"The Department of Energy's Clean Cities grant will diversify the city's fleet while achieving cleaner air and costs savings for taxpayers," said Indianapolis Mayor Greg Ballard. "As a member of the Greater Indiana Clean Cities Coalition, we look forward to working closely with DOE and the State Energy Office on this initiative."

The project stems from a federal American Recovery and Reinvestment Act competitive grant program from the U.S. Department of Energy. Indiana was one of only 25 states to meet last year's application deadline. The project must be completed by Sept. 30, 2011.