Rebates fuel alternative vehicles

Sunday, December 11, 2011

State’s natural gas supply drives increasing interest

By Paul Quinn
Arkansas Democrat Gazette

 

LITTLE ROCK — When David Ricci found out North Little Rock was opening a filling station for compressed natural gas vehicles, he didn’t hesitate in buying a 2005 Ford Crown Victoria for $16,100 that ran completely on the alternative form of energy.

 

 “I’m not a big green person, I don’t know about global warming,” said Ricci, a retired entertainment broadcaster who moved to Little Rock eight years ago. “But I know I pay $15 to fill up my car now when it used to take $50.”

 

The price he paid this summer for the full-size sedan, which had 13,000 miles on the odometer, was about $4,300 more than the Kelley Blue Book value of the car.

 

For Ricci and seven other individuals, and 16 Arkansas businesses and municipalities, the state has picked up half of the extra cost of buying or converting vehicles to natural gas.

 

Since first announcing a $2.2 million rebate program in August that pays for half the cost of converting a vehicle to compressed natural gas, the state has allocated $830,693 to help pay for the conversions of 140 vehicles.

 

Ricci got $1,937 from the rebate program, which was supposed to cover half of the extra cost of the Crown Victoria compared to the gasoline version.

 

In Rogers, Roger Gliedt received $6,450 to convert his 2010 Buick Lucerne, half of the cost. For Gliedt, the reason for converting to natural gas was as much to save on every fill-up as to know that he’s buying a fuel produced in the United States.

 

“I’d be an idiot to say I didn’t want the price to stay low,” Gliedt said. “On the other hand, if all [fuels] were equal we would still be ahead. Burning natural gas as a fuel is good for the country. It helps us get off foreign oil and it’s a cleaner burning fuel.”

 

Also pushing demand for natural gas filling stations and cars in the state is the abundance of natural gas being pumped out of the Fayetteville Shale of north central Arkansas. It is one a handful of shale gas fields that have popped up across the country in the past six years that have dramatically increased the amount of natural gas produced, dropping the price of gas from more than $10 per thousand British Thermal Units in 2008 to below $4 today.

 

Anyone considering using the state’s compressed natural gas rebate program only has a small window to fill out applications, said Kelly Volin, coordinator of the Arkansas Clean Cities Coalition with the Arkansas Department of Economic Development. She said applications should be in by Dec. 31.

 

Volin said the rebate program funds came out of the $737 billion American Recovery and Reinvestment Act of 2009, often called the federal stimulus act. The measure gives direct funding to infrastructure and energy projects, education and health programs, federal tax incentives, and expansion of unemployment benefits.

 

All money not spent by the end of April has to be returned to the federal government. Volin hopes that people will be able to get their cars converted by the Dec. 31 deadline.

 

The goal of the alternative fuel program was to increase the number of vehicles running on natural gas, with expectations this would lead to an increase in the number of natural gas filling stations in the state. Currently there are only three filling stations in the state, in Fort Smith, Damascus and North Little Rock.

 

Three companies have received more than $392,235, converting 58 cars and trucks:

 

Pressure Trucks of Rosebud.

 

Southwestern Energy of Houston (the top producer in the Fayetteville Shale).

 

AT&T of Dallas.

 

Southwestern Energy operates the station in Damascus, where natural gas is $1.60 per gallon equivalent, which is about 126.67 cubic feet of natural gas. Company spokesman Susan Richardson said that Southwestern has converted more than 100 vehicles in all. She didn’t respond to a question about the number of people who aren’t Southwestern employees who fill up at the Damascus station, except to say sales have increased each month since the station opened earlier this year.

 

She also didn’t respond to questions about whether Southwestern has plans to open more stations in Arkansas.

 

USAGE GROWING

 

At the North Little Rock filling station, which is operated by the city, the gallon of gas equivalent is $1.44. It, too, has seen an uptick in the number of users every month.

 

“We get between about five and 15 people every day,” said Nathan Hamilton, the city’s special-projects director. “It is going up.”

 

He said that during Sept. 10-30, there were 63 credit card transactions totaling $548.53; from Nov. 18 through Thursday, there were 149 credit card transactions totaling $1,953.35.

 

In April, Arkansas Oklahoma Gas, a natural gas utility serving Fort Smith and western Arkansas, opened the first natural gas station available to the public in the state. The utility also operates 60 natural gas-fueled vehicles, and has received $63,142 from the state’s rebate program to pay for half the cost of converting 13 of those vehicles.

 

“I’ve definitely seen a jump in the number of people using the station,” Arkansas Oklahoma Gas President Michael Callan said. “As people compare prices and environmental concerns, we anticipate increased usage.”

 

He said the number of people filling up is relatively small, but didn’t provide specifics.

 

While Arkansas Oklahoma Gas has no intention of opening another station, six municipalities — including Little Rock — are vying to get grants to build two natural gas stations. The Arkansas Economic Development Commission said it would pick two winners by the end of the year.

 

With gas prices so low, more municipalities and businesses are considering making the switch for their vehicles, said Richard Kolodziej, president of NGVAmerica, a natural gas industry trade group.

 

“[Natural gas] vehicles cost more to buy but less to operate,” he said. “Upfront cost will come down gradually as technology improves, competition increases and mass production starts.”

 

HONDA’S VERSION

 

Honda sells a natural gasfueled Civic compact that has a base price of $26,155, higher than equivalent gasoline versions. For buyers who register one of these in Arkansas this month, the state would pay for half of that price difference.

 

Kolodziej said the biggest hurdle to mass production of natural gas vehicles is the number of filling stations. There are more than 120,000 gasoline filling stations in the United States but only about 1,000 compressed natural gas filling stations.

 

In Los Angeles, there are more than 200 natural gas filling stations and with the infrastructure in place, more people are driving natural gas cars, Kolodziej said.

 

While Ricci and Gliedt love their natural gas vehicles, they admit there are some problems.

 

For Gliedt, who fills up his car at home, it takes 11 hours to fill up the tanks when they are on empty.

 

“I wish there were more ‘fast-fill’ stations around,” he said. “If, all of a sudden, I have to go somewhere it can be tough.”

 

On Thursday, Ricci filled up his 19-gallon tank in about 10 minutes in North Little Rock, but the two big tanks in his trunk take up most of the space.

 

Ricci says his mileage per gallon is comparable to gasoline. “I am not concerned with these things blowing up,” Ricci quipped. But, “There’s not a lot of space in the trunk.” Ricci also noted that he can’t drive long distances. “I certainly can’t drive to California,” he said.

 

 Business, Pages 63 on 12/11/2011