Last week the Department of Energy (DoE) released a list of 25 projects under the Clean Cities program that will be funded with nearly $300 million from the American Recovery and Reinvestment Act. Of those, 19 included plans to develop alternative fuel and compressed natural gas (CNG) or liquified natural gas (LNG) fueling stations.
According to the DoE announcement:
These projects will speed the transformation of the nation's vehicle fleet, putting more than 9,000 alternative fuel and energy efficient vehicles on the road, and establishing 542 refueling locations across the country.
Also according to the DoE, these projects "will help displace approximately 38 million gallons of petroleum per year" or about 10 percent of the oil we imported in July.
The specific amount of oil which will not have to be purchased from overseas is less important than the strategic issue: The Department of Energy agrees natural gas is a valuable fuel to bridge the gap to the day when the transportation fuels will primarily be electricity and hydrogen-based. Natural gas is cleaner, cheaper, domestic, and it's viable now.
That has been a central tenet of the Pickens Plan since we began promoting it in July 2008. We have always said that natural gas is a bridge fuel toward, not the sole solution to, reducing our dependence on foreign oil. Seventy percent of the oil we import -- and in July 2009 that sent over $24 billion overseas -- goes to fuel the fleets and trucks which move people and goods around and across America.
About half of that is used by heavy trucks, including 18-wheelers which generally run the same routes on a regular basis to get goods from factories and ports to malls and grocery stores.
Current battery technology is not suitable for powering heavy trucks. The only substitute for imported diesel is domestic natural gas -- in either its CNG or LNG form.
Natural gas is an off-the-shelf technology which is in widespread use around the world today. Some 10 million natural gas vehicles (NGVs) are in operation worldwide. However, only about 130,000 are in the United States.
There are two reasons for our having lagged. One, natural gas was believed to be an expensive and limited resource, while foreign oil was cheap and plentiful. Second, was the lack of a refueling infrastructure.
In reverse order, the Department of Energy's awards last week are a big step in the right direction to demonstrate how simple it will be to provide fueling facilities for heavy trucks and fleets which generally go home to "the barn" each night like utility and express delivery trucks, taxis and municipal busses; and city, county and state vehicles.
As the NGV industry begins to develop, it is only a matter of time before existing gasoline stations begin offering a natural gas island for passenger cars, but that is round two.
The issue of natural gas availability has become moot. Indeed, there is a glut of natural gas in the continental United States with recent studies indicating our natural gas reserves will last for well over 100 years. Much of these "new" natural gas has always been known, what is new is the technology which has been developed to recover it from the vast shale deposits under Texas, Louisiana, Arkansas and Appalachia. While the cost of foreign oil continues to take its toll on our economy and our security, we' discovered domestic natural gas is cheaper and more abundant than we ever imagined.
Because such a huge proportion of imported oil is used as a transportation fuel, making NGVs a significant part of our commercial rolling fleet will have an asymmetrical, positive impact on our need for foreign oil.
The DoE has made a serious statement. The Congress needs to do its part by adopting and sending to the President the NAT GAS Act (H.R. 1835 and S. 1408) which will provide incentives for fleet owners to begin replacing their cars and trucks running on imported gasoline and diesel to vehicles running on domestic natural gas.