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The lack of delivery infrastructure may delay the broad acceptance of natural gas as a vehicle fuel. Photo: Clean Energy
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    Liquefied natural gas can be delivered and stored like diesel, but compressed natural gas usually requires compression, storage and dispensing equipment. For a more maps, visit the Natural Gas Vehicle Institute at www.ngvi.com or the Alternative Fuel Vehicle Institute at www.afvi.org. Source: U.S. Department of Energy Alternative Fuels and Advanced Vehicles Data Center

As a cryogenic product, LNG requires special equipment and handling. To reach its liquid state, the gas must be chilled and stored at -256° F. Vehicle fuel tanks and LNG storage tanks are insulated pressure vessels, more like thermos bottles than traditional fuel tanks. Thus, while training to handle CNG takes five minutes or less, more specialized training and protective gear is required for LNG filling operations.

CNG is better for domiciled vehicles that return to a fueling station each night or day, such as refuse vehicles, street sweepers, and buses. LNG provides greater range for long-haul operations.

Finally, refueling equipment isn't the only thing that's costly about natural gas. According to the Diesel Technology Forum (DTF), an $110,000 drayage truck can cost as much as $200,000 when equipped for LNG. Conversions of diesel pickup and medium-duty trucks to natural gas cost $20,000 or more.

FUNDING OPTIONS

Public works fleets generally don't qualify for federal financial incentives offered to private-sector fleets that offset the vehicles' higher purchase prices.

But departments that operate CNG and LNG vehicles and onsite fueling stations may very well qualify for the alternative fuel excise tax credit, which is 50 cents/GGE (see IRS Publication 510 and Notice 2006-92). If a buyer is a non-tax-paying entity, tax credits can go to the seller. That gives you, the buyer, the opportunity to negotiate those credits as price reductions for equipment, infrastructure, or fuel.

In addition to grants from foundations — such as the William and Flora Hewlett Foundation in California, the National Energy Foundation, and various Clean Cities Coalitions — cities and counties can apply to federal agencies for funding to partly or completely mitigate investing in new vehicles, conversions, or projects.

Probably the most well-known is the Federal Highway Administration's Congestion Mitigation and Air Quality Improvement Program. Designed to enhance collaboration among state DOTs, municipal planning organizations, and transit agencies, eligible activities include converting diesel vehicles to cleaner fuels.

Over at the EPA, the agency has rolled virtually all emissions-reduction initiatives, such as Clean School Bus USA and Clean Ports USA, under a single umbrella: the Diesel Emission Reduction Program. Although a state match isn't required, 35 states participated this year; and states that fully match federal funds receive a “bonus” worth half the grant amount.

One of this year's grantees was Community Development Transportation Services Inc., which provides low-interest loans to rural public and nonprofit transportation providers in rural areas to develop self-insurance pools or pay the premiums on short-term insurance coverage.

The EPA has awarded the entire $50 million appropriated for 2008, but additional funding probably will be available next year.