The private sector is driving transition to CNG vehicles

By David Ludlam

Fleet conversion commitments from the private sector are critical in establishing a national transition to compressed natural gas vehicles. Many natural gas producers in western Colorado are putting their money where their mouths are by converting their own fleets. An emerging compressed natural gas market in western Colorado may be the result.

Making meaningful changes in the way Americans use energy requires tremendous investments in infrastructure and generally must be accompanied by changes in consumer behavior and habits. New ideas and initiatives are typically subjected to this reality and, as a result, are often derailed, falling victim to the age old quandary of the chicken and the egg.

In the case of natural gas vehicles, the same quandary is applied. What comes first, fueling stations or the CNG vehicles? In western Colorado, the answer is both. Private and public sector commitments to fleet conversion have combined to bring both elements to market, simultaneously.

In a press release earlier this month, the Governor’s Energy Office agreed that establishment of compressed natural gas fueling stations in western Colorado should be a priority and awarded funding to two regional fueling stations, one in Grand Junction and another in Rifle. The resulting emergence of vehicles and fueling stations at the same time is a model that best provides a solid foundation for the private sector to then build a robust, domestic refueling network.

Also this month, General Motors announced the production of assembly-line vans that will run on compressed natural gas. This welcome news follows Verizon’s 2010 conversion of 500 fleet vehicles to natural gas, while AT&T laid groundwork for a similar investment in 2009.

Super Shuttle, an international shared ground transportation company, also announced 2010 fleet conversions, while Honda aggressively markets the Civic GX — a domestically available natural-gas-fueled passenger vehicle.

Add to this list local natural gas operators like EnCana, Williams and the Bill Barrett Corp. These companies and others are contributing to and testing the viability of compressed natural gas markets in western Colorado.

These private sector commitments to fleet conversion will also continue to help bolster stock prices for compressed natural gas transition technology companies. Publically traded examples include Clean Energy Fuels and Fuel System Solutions. These companies are to provide commercial fueling stations, compressed natural gas conversion technologies and home fueling systems for natural gas vehicles.

As compressed natural gas distribution models are improved and refined, existing regional markets like the one developing in western Colorado may serve as flashpoints for a full-fledged domestic compressed natural gas vehicle sector in the future. Once established, western Colorado will play a role supplying clean, natural gas as a national transportation fuel.

In addition to private sector interest in compressed natural gas, national legislation to incentivize public and private fleet conversions continues to garner bipartisan support in Congress. Reduced reliance on foreign energy and cleaner air are two of the drivers of this political support. And, as this legislation moves through Congress, communities such as western Colorado,  which have taken proactive steps to kick-start compressed natural gas infrastructure, may be best positioned to maximize and expedite broader adoption of the fuel around the region.

In the coming months, the West Slope Colorado Oil & Gas Association will maintain focus on encouraging fleet conversions commitments from members of the organization. Showing conversion leadership demonstrates not only the business case for transitioning to compressed natural gas, but also helps strengthen new markets for Western Slope natural gas that will ultimately result in more local jobs.

Best of all, western Colorado natural gas will help ensure a cleaner domestic transportation fleet, and will play a part in reducing our reliance on oil from unstable regions around the world.

Reshaping public policy to incentivize compressed natural gas is a topic of discussion among policy makers. But the key to a permanent compressed natural gas sector in the United States is real and meaningful commitment from the private sector, coupled with public fleets’ adoption of natural gas a transportation fuel.

Members of the West Slope Colorado Oil & Gas Association and Western Slope public entities have shown such a commitment to date. Moving forward, the West Slope Colorado Oil & Gas Association will continue encouraging member companies and regional businesses to consider fleet conversions that will foster western Colorado’s emerging compressed natural gas fueling network.

David Ludlam is executive director of the West Slope Colorado Oil & Gas Association.


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