Greater Use of Natural Gas Supports Many of President Obama's Goals
Washington, D.C. – America’s natural gas utilities are promoting visionary policies to extend the unparalleled economic opportunities provided by this clean, abundant and domestic energy source to all Americans.
“The benefits of greater use of natural gas support many of President Obama’s goals, including protecting our environment, boosting our economy and increasing our national security,” said Dave McCurdy, President and CEO of the American Gas Association. “Our nation’s abundance of natural gas is expected to provide stable and affordable prices for homes and businesses well into the future. Expanding access to the economic opportunity provided by this clean, domestic fuel will require new thinking and visionary policies. America’s natural gas utilities operate and maintain more than 2 million miles of natural gas pipelines - a 21st century network capable of serving the nation’s energy needs safely and reliably today and into the future. We look forward to working with the President and policymakers at every level to continue to build a clean and secure energy future for our nation.”
Natural gas offers great opportunity for the residential, commercial and vehicle sectors. The American Gas Association is leading a dialogue about new approaches for greater use of natural gas throughout our economy and we are focused on a number of areas to help advance these opportunities as building blocks for our nation’s energy future:
Smart expansion of natural gas infrastructure
- Natural gas utilities already work with local utility commissions and state governments to expand the natural gas infrastructure safely and reliably to reach more citizens and businesses, but the federal government can reduce barriers to access for this affordable energy source.
- In many jurisdictions, expansion of natural gas infrastructure for residential use is considered separately from that of industrial use. Rethinking this approach and establishing industrial customers as “anchor tenants” in new service areas will benefit these businesses and surrounding residents who could gain access under this innovative approach.
- A concerted effort by natural gas utilities to upgrade and modernize our nation’s pipeline network to enhance safety has also contributed significantly to a declining trend in emissions from the natural gas system.
Cleaner and more affordable transportation
- There has been a 60 percent growth in natural gas refueling infrastructure since 2009. Leaders in every sector of our economy are embracing natural gas for transportation – not because they are required to, but because it offers real savings, real stimulus and real solutions.
- The Obama Administration has made great investments though Advanced Research Projects Agency – Energy (ARPA-E) in light-weight, affordable natural gas tanks for vehicles and natural gas compressors that can efficiently fuel a natural gas vehicle at home.
- The current weight restrictions for heavy-duty trucks require natural gas truck operators to reduce their payload to compensate for heavy natural gas tanks—meaning lost earnings. Updating the weight allowance for heavy-duty trucks would mean operators would not need to make that tradeoff.
- Diesel and liquefied natural gas (LNG) are currently taxed on a per gallon basis rather than an energy-equivalent basis (i.e. Btu basis), which translates to a tax rate on LNG that is 171 percent the tax rate on diesel. In an industry like trucking, where margins of pennies per mile make a difference, this higher tax rate has a real impact on NGV adoption and there should be a level playing field in place.
- The private sector has begun developing major natural gas transportation corridors but government can encourage continued development of these critical arteries for long-haul trucking, greatly reducing our consumption of gasoline.
- As the Administration works to develop the next round of federal Corporate Average Fuel Economy regulations for heavy duty vehicles, it should include provisions that incentivize vehicle manufacturers to produce and sell NGVs, similar to what is seen in the CAFE standards for light-duty vehicles, thereby providing more choices for consumers.
Investing in new technologies
- The U.S. Department of Energy should have a robust and integrated research strategy initiative focused on end use technologies for natural gas. Since DOE’s inception in 1977, they have had this level of research and development for the electric sector, but even with the broad environmental, economic and national security benefits of natural gas, there is not currently a similar program in place for natural gas.
- In order to realize the full benefits of natural gas, such as reducing both cost and emissions, we need to rethink how we measure efficiency. While appliance efficiency labels report the appliance’s site efficiency, “full fuel-cycle” efficiency (i.e., the full journey from production to end use in a home or business) is a better use of measuring efficiency because it includes the energy required to produce and deliver gas or electricity to the appliance. Natural gas has 92 percent full fuel-cycle efficiency, compared to just 40 percent for energy that goes through a power plant.
The American Gas Foundation and IHS CERA recently released a study entitled “Fueling the Future with Natural Gas: Bringing it Home” which found that the domestic market for natural gas can be greatly expanded beyond its current usage to provide new growth prospects for many sectors of the economy. The study found:
- Natural gas prices are expected to remain in the $4-5 per mmBtu range on an annual average through 2035.
- Switching to a natural gas-heated home saves U.S. consumers over $5,700 on average over 15 years.
- Lower prices of natural gas provided an increase in real disposable income per household of approximately $1,200 in 2012. This will steadily increase to $2,000 in 2015 and more than $3,500 by 2025.
- A natural gas vehicle will save you an average of $4,500 in fuel costs over five years compared to a gasoline vehicle.
To learn more about the report, go to www.fuelingthefuture.org.