Will new CAFE standards allow natural gas vehicles to drive America’s transportation future?
AGA is watching closely the release of new national fuel economy rules to see what sort of playing field these rules will create for natural gas vehicles (NGVs). Developing the market for NGVs enhances our energy security and our competitiveness, and encourages the expansion of transportation fueling infrastructure and technologic advances.
The Obama administration’s proposed Corporate Average Fuel Economy (CAFE) standards will guide automakers’ product plans until the middle of the next decade (2017-2025), and AGA believes this powerful policy lever is a once-in-a-decade opportunity for federal policy makers to allow NGVs to compete fairly with other alternatives fuel vehicles.
Prior to becoming President and CEO of AGA, Dave McCurdy headed the Alliance of Automobile Manufacturers, where he was instrumental in developing the historic agreement to increase mandatory fuel economy to 35.5 mpg by model year 2016, creating a blueprint for bringing government and industry together for a common purpose.
These standards, which would increase the measure of how many miles a vehicle can travel per gallon of fuel to 54.5 miles per gallon mpg for cars and light-duty trucks, are slated to take effect in late August or early September 2012. These rules also include manufacturing incentives for electric-drive vehicles that do not currently apply to other alternative fuels like natural gas.
Transportation currently dominates U.S. oil consumption, according to a May 2012 joint report by the Diplomatic Council on Energy Security and Securing America’s Energy Future, accounting for approximately 70 percent of total oil use. “With no commercial fuel substitutes currently available at scale to the transportation sector, the nation will likely remain heavily dependent on petroleum for several decades,” the report states.
The U.S. imports nearly 50 percent of its oil from foreign countries, the majority of which (52%) are members of OPEC. In 2009, crude oil and petroleum products accounted for more than half of the total U.S. trade deficit. By replacing our transportation fuels with domestic alternatives like natural gas, we can significantly improve our economic and energy security.
Each natural gas vehicle displaces virtually all of the petroleum used by a conventional gasoline vehicle. And it’s domestic: ninety-nine percent of the fuel on-board a natural gas vehicle driven in the United States comes from North America. That’s because our nation is the world’s leader in natural gas production. Yet, only about one percent – 130,000 – of the nearly 13 million natural gas vehicles worldwide are driven in the United States.
There’s more. A recent National Petroleum Council (NPC) study demonstrates a viable spot for both light and heavy-duty NGVs in both retail and fleet markets, and highlights several factors that show the positive role natural gas can have in the future.
The Drive Natural Gas Initiative is a collaborative effort of natural gas utilities and producers seeking to further develop the use of clean, domestic, affordable natural gas as a transportation fuel. Work is underway on the infrastructure necessary to support natural gas as a transportation fuel and a level playing field would help spur advancements in this area.