We commend the President for recognizing the immediate benefit of using a clean, domestic fuel such as natural gas: “A great place to start is natural gas,” stated Obama.

Based on his remarks, the President plans to support tax incentives for companies to buy more natural gas vehicles, specifically mentioning city bus fleets and the federal fleet. He also mentioned job creation in the context of using a domestic fuel and building infrastructure (it is an election year). We can only hope this support turns into legislation!

So, we’re a little biased – since the biomethane (natural gas from renewable sources) FirmGreen produces is a “drop in” fuel for a natural gas infrastructure. Obama said his administration would continue to work with the private sector to develop five natural gas corridors along major highway routes.

Click here for the White House PR.

Visit FirmGreen’s website to find out how using biomethane recovered from wasted resources can benefit your community.

Want to watch the speech? It’s here on C-Span:

Beijing has declared the electric vehicle industry a top priority, earmarking $1.5 billion a year for the next 10 years to transform the country into one of the leading producers of clean vehicles.

Imported models such as GM’s Chevy Volt are excluded from this policy, however the Sale electric car developed in a joint venture with GM and two EV’s made at Volkwagen’s two Chinese based car ventures, will qualify for the sales tax exemption. Included are vehicles made by:

• BYD, backed by Warren Buffett
• Chery Automobile Co., Ltd. – both EV and Fuel Cell (FCEV) models
• China FAW Group Corp. – both EV and Fuel Cell (FCEV) models
• Geely Automobile Holdings
• Shanghai Volkswagen Automotive Co., Ltd. – Passat brand FCEV
• …and others

Obviously, market development is required for increased use of biomethane in the transport sector, and support in the U.S. currently lags well behind that in the EU. In an article available online, a UK Environmental Audit states that “biomethane is an almost perfect renewable transport fuel.” The audit concludes that wide adoption of CNG and biomethane for transport will deliver the greatest air quality benefits at the lowest cost, especially when compared to expensive battery powered hybrid electric vehicles.

NGV refueling stations are somewhat costly to install (though not significantly more costly than a new fossil fuel station) and are only commercially viable if they refuel a significant number of vehicles — such as a fleet. Therefore the market penetration of NGVs for personal vehicles suffers from a classic problem; fuel suppliers are reluctant to construct refueling stations until there are sufficient numbers of NGVs, and consumers are unwilling to purchase the vehicles until there are sufficient refueling stations.

How do we get past this longstanding issue? A 2011 European Commission (EC) report on smart gas grids concludes that NG fueling stations can be located near their existing natural gas grid, avoiding the need for a costly build out of new gas distribution infrastructure. A similar approach might significantly reduce the overall cost of NG fueling infrastructure development, even for geographically large countries such as the U.S. However, the U.S. would still have large NG fueling gaps in areas that are not along natural gas pipeline routes, so a focus on fueling for fleets continues to make sense economically. Locating fueling hubs near fuel feedstock supplies such as landfills and waste-water treatment facilities is likely to continue as a limiting factor for biomethane use, unless national energy policy supports NG as a transportation fuel on a long term basis.

The European Industrial Bioenergy Initiative (EIBI), is a related effort underway in the EU to accelerate commercialization of advanced sustainable bioenergy. The broadest objective of this organization is to bring sustainable energy and fuel products to market at costs competitive with fossil fuels. Biomethane is one of several paths being explored to bring cost effective renewable fuels to the market; developing coherent policy that promotes a willingness for industry to invest in alternative fuels and energy is a primary task.

Find clean fuel facts about biomethane and CNG at: firmgreen.com

Links to article sources:
UK Parliament Environmental Audit Summary (opens in new window or tab)

EC Report on Smart Gas Grids – biomethane references, pp15-16 (PDF opens in new window)

European Industrial Bioenergy Initiative (EIBI) (opens in new window or tab)

“Reliance on oil is the greatest immediate threat to U.S. economic and national security, and also contributes to the long-term threat of climate change,’’ the report states. (page IX of the Executive Summary) Fine so far: we agree!

In the transportation sector, the DOE intends to focus on technologies that “significantly reduce oil consumption and diversify fuel sources for on-road transportation.” Step one (see the chart above) involves continued increases in Corporate Average Fuel Economy (CAFE) standards. Beyond improving fuel efficiency, the DOE seems to have concluded that electrification of fleets represents the next best step. What?

Considering that almost 20% of our electricity generation is still powered by coal, electrification of vehicles will do little to reduce carbon emissions. So a push toward EV’s prior to cleaning up our electrical generation seems odd. However, recent government efforts to support primarily one biofuel – ethanol – have come under heavy criticism and may partially explain the lack of enthusiasm for biofuels. It’s no secret that ethanol production from corn puts it in competition with food supplies, and may require more energy to produce than can be obtained from using the fuel. Current research in this area is focusing on use of waste crop products, such as corn stalks and husks, but researchers admit that such fuels are multiple generations away from market viability. Hydrogen and fuel cells aren’t anywhere near ready for prime time either. Hence, the DOE concludes a shift to EV’s is the best near-term opportunity to reduce reliance on petroleum for transportation.

The report mentions another hurdle for biofuels besides ethanol: alternative transportation technologies must compete with the established fueling infrastructure. That hurdle is real, but it is unlikely to be overcome if there is little will to do so. We think another fact stated in this same report (p.17) provides ample reason for a will to surmount this hurdle: oil imports at current prices contribute 70% of the United States’ trade deficit. Budgets are tight these days, but some funding of new fueling infrastructure would also create some jobs, ultimately increasing tax revenues.

The DOE mentions natural gas as a transportation fuel, and then seems to dismiss it as a solution: the report states that “recent expansion of domestic gas reserves has…raised the possibility of exports.” In other words, not only do we have enough for domestic use, but we could actually export to other nations. Strangely, the report then concludes that such a linkage to global markets could make the US economy vulnerable to price swings in that market. This is amazing: it’s a little like concluding that Saudi Arabia’s economy is vulnerable to swings in the global price of oil. Technically true of course, but historically economic vulnerability from oil price swings has been much greater for nations that import than for those that are net exporters.

Some disclosure is appropriate here: FirmGreen is in the business of recovering and cleaning wasted methane (natural gas) from sources such as landfills and waste water treatment plants to produce natural gas fuel equivalent to pipeline quality. Obviously, policies that support adoption of natural gas as a transportation fuel could benefit our company. However, we fail to see how transitioning from a fuel for which we must import almost 50% of what we use, to a fuel that we have in sufficient enough quantity to export makes the US more economically vulnerable.

In fairness to the report, another stated goal is to derive 80% of America’s electricity from clean-energy sources by 2035. A great idea, and one that will require continued innovation, especially in the area of energy storage (i.e., battery technology) and improving the grid to reliably deal with fluctuations in production inherent in renewables such as solar and wind. Domestic natural gas, including biomethane would have a supporting role to play here as well – that of clean backup power when the sun isn’t shining or the wind isn’t blowing. However, greater adoption of renewables for power generation could still be expected to free up domestic natural gas supplies for transportation use. That this is the essence of the Pickens Plan doesn’t mean it’s a bad idea. Until we shift to cleaner power generation, a shift to EV’s will do little to clear the air, though it may slightly reduce demand for imported petroleum.

In our view, improving fuel efficiency is good policy. But we believe a rapid shift toward alternatives such as domestically produced natural gas for transportation is more likely to deliver near-term as well as long-term benefits, both environmentally and economically, over a strategy of electrifying our fleets.

Read or download the full DOE report (PDF)

S.734 was introduced 4/6/2011 and has a related House Bill: H.R.1367. Senators Carl, Levin, D-MI and Ron Wyden, D-OR are Co-sponsors, with Sen. Wyden also being the Sponsor of S.1001. The bill —currently entitled “Advanced Vehicle Technology Act of 2011″—seeks to accelerate development and commercial deployment of advanced vehicle technologies. Intended to improve fuel efficiency and utilize alternative fuels, S.734 has bipartisan support. In the 111th Congress, a similar bill passed the House but did not get through the Senate before adjournment December 2010.

The objectives of S.734 are to improve fuel efficiency and reduce dependence on petroleum imports, while supporting domestic research and manufacturing.

Read full text of S.734 at gpo.gov (pdf opens in new tab or window)

S.1001 was introduced 5/16/2011 and does not have a related House Bill; Senator Debbie Stabenow, D-MI – the Sponsor of S.734, is Co-sponsor of S.1001. This bill, currently entitled “Alternative Fuel Vehicles Competitiveness and Energy Security Act of 2011″ has a broader objective: to reduce oil consumption and improve energy security. The bill defines alternative vehicles broadly (electric vehicles, fuel-cell, biofuels, etc.), provided that the vehicles “reduce consumption of conventional motor fuel by 25% or more”.

It would authorize millions in funding annually from 2012-2016 to state and local governments and public-private partnerships. The funding will support activities ranging from loan guarantees for alternative fuel infrastructure to workforce training for jobs related to AFVs and fueling infrastructure.

Supporters point to the fact that this legislation avoids “picking winners and losers” prematurely, and directs the DOE to develop methodology that will calculate the actual “well-to-wheels” oil displacement of the various AFVs, and the maximum feasible deployment for each type of AFV by 2020.

Read full text of S.1001 at gpo.gov (pdf opens in new tab or window)

• electricity consumes over 280,473 Btu of fossil fuel per gge
• E85 ethanol produced from corn consumes about 190,869 Btu/gge
• Compressed Natural Gas (CNG) from landfill gas consumed zero Btu/gge of fossil energy

On emissions, CNG derived from landfill gas is by far the cleanest fuel. The results below are stated in grams per equivalent gallons of gasoline (gge) of the consumed fuel for emissions:

• electricity generates 23,780 grams of emissions per gge
• E85 ethanol produced from corn generates 8,009 grams of emissions per gge
• Compressed Natural Gas (CNG) from landfill gas generates 270 grams of emissions per gge

Data Source: Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model 1.8d

Find more fuel facts at: firmgreen.com

This is an about-face for Kan, who previously supported export of Japan’s nuclear technology to emerging countries. Renewables could get a boost if Parliment passes a law requiring utilities to buy power from small scale producers, under a feed-in tariff. Until 2004, Japan led the world in solar photovoltaic (PV) installation, but European countries have taken the lead since then.

Japan’s primary concern regarding renewable energy is economic, with dependability being second. However, the cost of nuclear power will rise after the recent accidents due to stricter safety standards and increased liability costs. Meanwhile, the technology for renewables is improving steadily, and lowering costs.

It remains to be seen how policy will be affected on a long term basis, but for now natural gas is likely to play a larger role in providing energy to Japan.

The Bad News
Gone are all the tax credits for converting a vehicle to run on CNG. This includes conversion kits and re-powering heavy trucks and equipment.

The tax credit for purchasing the equipment for a fueling station has been reduced from 50% of the investment with a $50,000 cap down to 30% of the investment with a $30,000 cap

The tax credit for purchasing home refueling equipment for private use has been reduced to $1000.

The Good News
The Federal Excise Tax Rebate for the purchase of CNG as a motor vehicle fuel is back. At the end of each year a CNG fuel station owner will be able to file for a cash rebate of fifty-cents ($0.50) for each CNG gallon sold during the year. CNG is sold as “gasoline gallon equivalents” or gge. The intent of the law is to make the sales price of CNG more attractive as the station owners pass this saving on to their customers. In reality, the savings is only 31.7 cents per gallon because the CNG retailer still has to remit the Federal Road Use Tax called Federal Excise Tax. The Excise Tax has to be paid twice a month on every gallon sold except for CNG sold to cities, states, school systems, and some other non-profit organizations.

Read the rest of the commentary at firmgreen.com

Testifying at today’s hearing, Richard Kolodziej, president of NGVAmerica told the Senate Environment and Public Works Committee: “Faster growth in the use of natural gas as a transportation fuel would provide increased energy security, cleaner air, less greenhouse gas emissions, and more U.S. jobs.” Kolodziej urged the Senators to establish transportation policies that support natural gas as a transportation fuel.

Kolodziej testified before the Committee’s hearing on “Opportunities to Improve Energy Security and the Environment through Transportation Policy.” Click to read Kolodziej’s full statement

Unlike the health care debate, which split sharply along partisan lines, Senators on both sides of the aisle are working on climate legislation, and that inevitably includes the use of alternative fuels for transportation. One reason is the fact that our current dependence on imported petroleum is viewed as a national security issue as well as an environmental issue, and legislation to curb emissions is also expected to spur domestic job creation.

Senator John Kerry, (D) of Massachusetts recently stated, “Climate legislation is the single best opportunity we have to create jobs, reduce pollution and stop sending billions overseas for foreign oil from countries that would do us harm. If we sell those arguments we’ve got a winning issue on jobs, on security and on public health. This can happen.”

Stay tuned as we continue to track this issue during the 111th Congress!

NAT GAS ACT: Compare Senate and House Bills
Visit Thomas, the Library of Congress website…