Pennsylvania is sending a package of bills through its House of Representatives that would support the use of natural gas as vehicle fuel.
On Wednesday, it pushed three tax credit programs—part of what is called the “Marcellus Works” package—incentivizing natural gas use through production coming out of the Marcellus Shale. The new set of laws, if passed, would encourage companies throughout the state to use more natural gas vehicles (NGVs) and provide convenience in fueling stations.
The first of the three is a $25 million tax credit that would encourage companies to convert roughly 1,000 medium-sized fleet vehicles out on the road to natural gas, Philly.com reports.
The second focuses on fueling stations. A $5 million credit would go towards the construction of 10 new fueling stations positioned in high-traffic corridors.
And third: a three year subsidy to promote the purchase of heavy duty vehicles that run on natural gas. This would encompass much of the state’s transit lines.
There are nine bills in total as part of the package. The other six measures that include tax credits, grants, and further loan programs all focus on Pennsylvania transit, government, and state business. Those measures will likely be voted on next week.
Once they are voted on by the House, they must be approved by the Senate and the governor before becoming law.
The state has an abundant supply of natural gas coming out of the Marcellus Shale every day. By enacting these new bills into law, the state of Pennsylvania could potentially save itself millions of dollars.
Eye to Eye
Proponents of the Marcellus Works package, a group that is largely Republican, claim that it promotes a more environmentally friendly, cleaner-burning fuel that is also a less expensive option compared to diesel fuel. Supporters argue that employment will increase, the air will be cleaner, and dependence on foreign oil will be cut significantly.
House Majority Whip Stan Saylor, a York County Republican, says, “This package is not corporate welfare,” he says. “[Natural gas] helps us get off foreign oil. It’s a money-saving process, and it cleans up the air. Is it going to solve climate change? No. But it cleans up the air pollution,” NPR reports.
Bipartisanship is in support of the package, but not all Democrats are convinced that the incentives are needed.
Instead, some Democrats are calling the set of bills corporate hand-outs and don’t see where any real job creation can be found. According to their argument, the natural gas industry is already rich, so there’s no need to keep stuffing their pockets.
But no one can argue with the fact that natural gas is cleaner and more environmentally friendly than gasoline and diesel. And it’s more cost effective, too. And as health standards are heightened domestically, the conversion to natural gas is a natural progression that is going to start somewhere. What better place than in the state of Pennsylvania?
Down With Diesel
Diesel fuel faced a similar situation in the 60s as it burst onto the market. There were no fueling stations for diesel back then, just as it’s hard to find one for natural gas now. But nowadays, go down the street to the nearest gas station, and there you’ll find it. Diesel is everywhere.
Shale gas drilling has become a major game changer for future energy needs, and with some likely changes and adjustments to incorporate natural gas, it can be a part of everyday life. It can easily become as prevalent and popular as diesel fuel is today.
And as the shale boom continues throughout the country, natural gas production will continue to soar, driving down costs. And eventually—if bills like the ones in Pennsylvania are passed into law—the price consumers pay at the pump will go right down with it.
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Companies
Rabbit Transit, a company that operates a fleet of bus lines in Pennsylvania, would be one of the first to benefit from the proposed changes. It would convert its 87-bus fleet to natural gas, but it would also need a place to refuel its transport line. The fuel and station are both equally important.
Some companies are already making the switch, such as York Waste, owned by Republic Services, Inc. (NYSE: RSG). Last year, the company announced 65 of its 100 diesel-powered garbage trucks would be replaced with NGVs
More businesses are set to make similar changes, and if the Marcellus Works package goes into effect, there’s no looking back.
The consumer market is also starting to make changes in converting to natural gas.
Honda (NYSE: HMC) released a passenger Civic last year that runs completely on natural gas. And this year Ford (NYSE: F), General Motors (NYSE: GM), and Chrysler all have vehicles that will be fueled by gasoline and natural gas.
And fueling stations are going to start popping up nationwide. Clean Energy Fuels Corp (NYSE: CLNE) is leading the charge as it plans to put up 150 new stations across the country—mostly at Pilot Flying J truck stops—located off major highways.
So while you’re out taking a nice spring drive, look around and see if you notice any of these changes. There will be a lot going on around the country in 2013.
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