Promotion of Natural Gas as Fuel Benefits Arkansans (Michael J. Callan Commentary)

by Michael J. Callan  on Monday, Jun. 24, 2013 12:00 am  

Michael J. Callan

The environment, economic development and transportation are issues each state legislature and governor must address. Recently, Arkansas lawmakers approached three questions: How can Arkansas improve air quality, lower fuel costs and support homegrown industry? They found the answer to those questions right below their feet in abundant supply — natural gas.

Most of us think of natural gas as a fuel used to heat our homes, generate electricity or grill in the backyard. But Gov. Mike Beebe and the general assembly are changing our perception by promoting natural gas as a viable alternative for motorists across Arkansas. Last month, Gov. Beebe signed a law that provides financial incentives for compressed natural gas (CNG) vehicle conversions and construction of CNG fuel stations. The law will provide a rebate of up to $4,500 for the purchase or conversion of each CNG vehicle and up to $400,000 for the construction of each CNG fueling station. Three CNG stations are already online in Fort Smith (in continuous operation since 1982), Damascus and North Little Rock, with two more expected in Little Rock and Conway.

The environmental benefits are significant. More than 30 percent of our nation’s carbon emissions are from transportation sources. However, by encouraging the use of natural gas as a transportation fuel, Arkansas’ policymakers seized the opportunity to take advantage of natural gas’s environmentally beneficial attributes. Natural gas is 25 percent cleaner burning than traditional gasoline or diesel, with lower nitrogen oxide and sulfur dioxide emissions.

Utilizing natural gas as a motor vehicle fuel is important for another reason — cost. Think about the money you spend at the pump each week. At $3.60 per gallon on average, gasoline is costing motorists dearly, nearly $36 for every 200 miles driven. By comparison, natural gas in Arkansas costs between $1 and $1.50 per gasoline gallon equivalent, so that same 200-mile trip costs about $10 using natural gas. When you consider Arkansans consume approximately 1.4 billion gallons of gasoline annually, the potential savings are significant. Simply displacing one-fourth of 1 percent of our gasoline consumption with natural gas would save 3.5 million gallons of gasoline annually. Gov. Beebe’s and the general assembly’s goal of increasing CNG vehicles and stations obviously will be beneficial for Arkansas consumers.

Other states as well as cities and companies are also betting on the environmental and economic benefits of natural gas. Oklahoma has 73 CNG fueling stations; Texas has 31. In Detroit, our country’s auto manufacturers are developing more natural gas pickups. In Washington, D.C., the Metropolitan Transit Authority has transitioned its bus fleet to natural gas and has seen a 53 percent reduction in nitrogen oxide and 89 percent lower carbon monoxide emissions.

Here in Arkansas, natural gas has also played a vital role in our economic development. The thousands of jobs with an annual average wage of $74,000 associated with the development of this valuable energy source have produced much-needed revenue to state and local governments. Additionally, the investment of more than $12 billion by the natural gas industry and the payment of more than $1.2 billion in royalties from the Fayetteville Shale production area have created an enormous financial boon for Arkansas and Arkansans.

By increasing the number of natural gas-powered vehicles, Arkansas can take advantage of all these benefits. The investment for CNG fueling stations and for CNG vehicles is substantial. One cannot effectively develop without the other. Simultaneous development of this “symbiosis” is critical to expanding the use of CNG as an alternative to petroleum-based fuels.

Gov. Beebe and the Arkansas Legislature recognized the need for and advantages to moving us forward in the effort by encouraging both CNG fueling stations and CNG vehicles simultaneously. For that we owe them our thanks.

Michael J. Callan is president of Arkansas Oklahoma Gas Corp. in Fort Smith and chairman of the board of the Arkansas State Chamber of Commerce.

 

 

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