Natural Gas Vehicles, Proposed U.S. Subsidies

Source: Reuters, Bernie Woodall and Kevin Krolicki  (7/28/10)

"Bill includes $4 billion in subsidies for natural gas-powered vehicles."


U.S. Senate Democrats on Tuesday unveiled an energy bill that includes almost $4 billion in subsidies for natural gas-powered vehicles.

Although natural gas vehicles have been promoted as a cleaner-burning alternative to gas engines, very few have been sold in the United States.

House lawmakers are expected to vote on their version of the legislation before Congress breaks for recess in August.

The following are key provisions of the proposed legislation and background on the adoption of natural gas vehicles in the United States:

  • The main barriers to natural gas vehicles in the U.S. have been cost and the lack of a network of fueling stations.
  • The proposed Senate legislation would provide a federal rebate of $10,000 for natural gas cars and up to $64,000 for heavy trucks.
  • A Massachusetts Institute of Technology study issued this month partly funded by the natural gas lobby estimated that the fuel could provide 40 percent of U.S. energy needs in the coming decades, up from 20 percent now. It said high-mileage fleet vehicles like taxis could be economically converted to run on CNG.
  • Despite the limited sales in the United States, the technology is in widespread use overseas. Pakistan, for example, leads the world with over 2.3 million natural gas vehicles on the road, according to the International Association for Natural Gas Vehicles. Taxi fleets in Tokyo and Seoul also run on liquefied natural gas.