US government incentives needed for natural gas fueling stations: executive

Washington (Platts)--14Nov2012/437 pm EST/2137 GMT

Heavy duty trucks in the US will continue to switch from diesel to natural gas even without federal tax incentives, but the rate of switching would be faster if Washington offered incentives to build fueling stations, Jim Arthurs, president of natural gas engine maker Cummins Westport said Wednesday.

An investor "who puts $2 million into a station may not have a lot of customers right away. But the station has to be there before trucks can come in," Arthurs said. "If we can have incentives, I think they should go toward helping the people who invest in the infrastructure. Then the trucks can come and get refueled." Arthurs spoke at the North America Summit in Washington.

Cummins Westport builds about 40% of the compressed and liquefied natural gas engines used by heavy duty trucks in the US. The company is an 11-year-old joint venture between Cummins Engine of Columbus, Indiana, and Westport Innovations, of Vancouver, British Columbia.

"The nice thing about heavy duty transportation is the vast majority of heavy duty trucks run down interstate highways so you don't need 150,000 fueling stations," he said. A thousand refueling stations with LNG or CNG capability "will give us pretty much full coverage."

There are about 400 refueling stations either in operation or planned, he said, adding that "we are getting there."

The high cost of CNG and LNG fuel tanks is an impediment to more widespread adoption, but Arthurs said that as more natural gas powered vehicles are built, the price of the tanks will likely decline.

Another drawback is the fuel tax advantage diesel powered trucks have over LNG powered vehicles. "LNG is now taxed on a volume basis so that effectively, on an energy equivalent basis, LNG powered trucks pay about 60% more in road taxes than diesel-powered trucks," he said.

--Rodney White, rodney_white@platts.com
--Edited by Jeff Barber, jeff_barber@platts.com