The introduction of the NAT GAS Act today by Senators Robert Menendez (D-NJ), Harry Reid (D-NV), Richard Burr (R-NC) and Saxby Chambliss (R-GA) is a major step toward reducing America’s dependence on foreign oil, says the president of NGVAmerica, the trade association representing the natural gas vehicle industry.
“This comprehensive legislation is driven by the need for America to quickly switch to more domestically available fuels while simultaneously reducing greenhouse gases and urban pollution,” says Richard Kolodziej, president of NGVAmerica. “This bill would provide a real incentive for American businesses to help them diversify away from petroleum reliance and lower their fuel bills at a time when those costs are very high. And it will put hundreds of thousands of people to work building new fueling stations, manufacturing natural gas vehicles, and producing domestic natural gas, at a time when adding American jobs is critical.
“We commend Senators Menendez, Reid and Burr for recognizing that it will take real commitment at the national level to move our country off our addiction to oil quickly.”
The New Alternative Transportation to Give Americans Solutions Act (NAT GAS Act – S. 1863) is similar to H.R. 1380, introduced in the House of Representatives on April 6th, which currently has 181 bipartisan co-sponsors. It includes an extension and expansion of income tax credits for the purchase of natural gas vehicles and the installation of natural gas fueling infrastructure, and a production tax credits for auto, truck and buses makers to manufacture natural gas vehicles. All these incentives would be in place for a five-year period.
However, S. 1863 is different from H.R. 1380 in two significant aspects. First, unlike the House bill that includes a 50 cent per gallon excise tax credit for each gallon of compressed or liquefied natural gas sold, S. 1863 includes no similar tax credit. Second, under S. 1863, the users of natural gas vehicles would pay back the federal Treasury for the cost of the incentives via a surcharge on the natural gas used in vehicles. The surcharge would ramp up by steps over a 10 year period, from zero in the first two years to 12.5 cents per gallon in the last two years.
“Operating costs for NGVs are significantly less than for gasoline and diesel vehicles,” said Kolodziej. “But, right now, our purchase costs are greater. These greater first costs have been the biggest factor holding back faster growth in NGV use. Even with the added cost of the surcharge, the natural gas vehicle industry is confident that the incentives in S. 1863 will result accelerated demand for NGVs. With economies of scale that will result from this increase in demand, first cost will be driven down even more, and the market will flourish.”
“We have a huge natural gas resource base right here at home,” Kolodziej continued. “We should be increasingly using it right here at home in place of imported oil. And that means more natural gas cars, trucks and buses.”
NGVAmerica is a national organization dedicated to the development of a growing, sustainable and profitable market for vehicles powered by natural gas or hydrogen. NGVAmerica represents more than 130 companies interested in the promotion and use of natural gas and hydrogen as transportation fuels, including: engine, vehicle and equipment manufacturers; fleet operators and service providers; natural gas companies; and environmental groups and government organizations.