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Oklahoman - Oklahoma's Energy Plan Could Tip Auto Scales in Favor of Natural Gas

News Article

Location: Oklahoma City, OK

By Michael McNutt

Successful implementation of a key component of Oklahoma's energy plan may produce more affordable natural gas vehicles for the average car buyer, the state's energy secretary told a House committee Tuesday.

Part of the plan is asking other states to join in committing to buy natural gas vehicles for their fleets and seeing whether automakers would manufacture a car for them that also would be available for sale to individuals.

Energy Secretary Mike Ming, who led development of the plan, told members of the House of Representatives Energy and Utility Regulation Committee that Oklahoma and Colorado are spearheading the effort. Other states joining the effort to get more natural gas-powered vehicles on the road include Kentucky, Maine, New Mexico, Pennsylvania, Utah, West Virginia, Wyoming and Texas.

The biggest market for natural gas vehicles is light-duty utility and delivery trucks, he said.

"The passenger vehicle is by far the biggest market, but penetrating that market upscale is certainly a challenge," he said. "The reason we picked that segment is that's where the state can move the needle. ... If we can get those cars onto the road and make them affordable, then people will buy them."

Supply and demand

A "tsunami of supply" of natural gas has caused prices, as high as $15 per thousand cubic feet in January 2006, to drop to $2.50 per thousand cubic feet, he said. Natural gas producers pay a state tax on their production so new markets will help the state's coffers and make it a reliable revenue stream.

Each of the 10 states has signed an agreement that outlines a goal to buy, as a group, 5,000 natural gas vehicles a year, Ming said. It's hoped that will provide an incentive for manufacturers to begin producing an affordable natural gas four-door sedan.

"The 5,000 is not the target market," he said. "The target market is hundreds of thousands or more."

Gov. Mary Fallin, in her State of the State speech to lawmakers Monday, said the state plans to ask automobile companies to develop the vehicle.

"By supporting natural gas consumption, we are supporting an Oklahoma energy source that will continue to produce Oklahoma jobs," she said.

Ming told committee members that mass production would bring down the price of conversion kits for typical car buyers. Such kits cost between $6,000 and $10,000 -- putting natural gas vehicles out of the price range for many buyers; if the states' offer is accepted, the cost could be reduced to $1,000, he said.

Oklahoma, with a fleet of 500 natural gas cars, could save about $345,000 a year in fuel costs, he said.

The energy plan also calls for requiring every state agency and higher education entity to reduce energy consumption by 20 percent by the year 2020.

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