Apr 29, 2008

Subsidizing Clean Fuels

An executive from a California-based supplier of natural gas to the transportation industry has urged House and Senate conferees on the Farm Bill (H.R. 2419) to extend the existing alternative fuel excise tax and infrastructure income tax credits.

“These credits have promoted sound transportation fueling policy in the United States by expanding the use of natural gas as a vehicle fuel and expanding the natural gas vehicle fueling infrastructure to support a greater number of vehicles and fleets,” said Andrew J. Littlefair, president and CEO of Clean Energy Fuels Corporation. “Since the credits were first enacted, the use of natural gas as a vehicle fuel has increased dramatically. The impact on our country’s stated goals for energy independence is beginning to be felt. The benefit for the environment and public health is dramatic as clean fuels such as natural gas are used in place of dirty and toxic diesel.”

Clean Energy fuels more than 14,000 vehicles daily from strategic locations across the country. Almost 98 percent of that fuel is produced in North America (85 percent in the U.S. and the balance in Canada), while more than 60 percent of the petroleum Americans use is imported.

“Our industry’s goal to displace 10 billion gallons of petroleum use by 2025 will be helped measurably if the tax credits are retained to continue encouraging the widespread use of alternative fuels for transportation,” Littlefair said.

Although he called for an extension of tax credits, the executive noted that the economic value of using natural gas as a vehicle fuel has become clearly evident as lower-cost natural gas has helped fleets and individuals to offset the rapid price increases of gasoline and diesel. Oil recently reached its historic high price, and more price volatility is predicted.