Sustained Outrage

Which way should W.Va. go on clean vehicles?

Alternative fuel vehicles have been getting an unusual amount of attention in West Virginia lately.  Last month, the Gazette and other media gave a lot of attention to this story:

The Interstate 79 corridor will be dotted with four compressed natural gas filling stations by 2014, Gov. Earl Ray Tomblin announced during a news conference Thursday.

The announcement took place near the Spring Street Foodland, the site of the planned Charleston station.

IGS Energy-CNG Services will build the four stations. The other three sites are near Jane Lew, Bridgeport and just across the Pennsylvania state line at Mount Morris.

State Sen. Brooks McCabe, D-Kanawha, said that although IGS is an Ohio company, it chose to build the stations in West Virginia because state lawmakers were ready with legislation to make natural gas feasible.

T.J. Meadows, West Virginia business manager for IGS Energy-CNG Services, and a West Virginia native, said the stations in Charleston and Bridgeport should be open and operating by fall.

A few weeks later, West Virginia Public Broadcasting promoted natural gas vehicles with this story:

With technology for natural gas powered vehicles on the horizon, many consumers are sure to be excited about the possibility of lowered fueling costs and reduced emissions. However, there are a few bumps in the road in making these vehicles available for a mass market.

With fueling costs of natural gas vehicles roughly one-third of traditional unleaded gasoline fueled vehicles, motorists are sure to embrace the new technology. Chesapeake Energy spokesperson Phil Pfister explains how these vehicles have fared in other states.

“Right now in Oklahoma, motorists that are fueling up are fueling up for 99 cents a gallon equivalent, versus—we’re paying about $3.50 for gasoline here in West Virginia. In Louisiana motorists are fueling up for about $1.49 a gallon equivalent. So, there is a lot of cost benefit. Additionally, it produces a lot cleaner exhaust stream; less CO2, less carbon monoxide, less particulate matter.”

And today, the local media is giving pretty good play to this report from The Associated Press:

It’s not often that environmental organizations and the coal industry come down on the same side of a policy debate. But that’s happening in West Virginia, where both groups have concerns about Gov. Earl Ray Tomblin’s proposal to eliminate a state tax incentive for plug-in electric cars and other alternative-fuel vehicles.

The tax credit covers 35 percent of the cost of an alternative-fuel vehicle, up to $7,500 for cars and $25,000 for large trucks. The credit would remain in place for vehicles that run on natural gas, propane and butane, but would be phased out in 2017, rather than 2021 as scheduled.

And since last July, members of a task force appointed by Gov. Tomblin (a task force made up mostly of natural gas industry officials or advocates) have been working on plans for how the state could convert more of its fleet of vehicles to natural gas. The media have treated this all as a no-brainer, writing things like this without any attribution:

The benefits of natural gas as a fuel are clear: It’s cleaner, abundant and costs about half as much as gasoline.

It’s no wonder that a variety of local officials are strongly backing natural gas vehicles. They’re all eager to do whatever they can to help West Virginia cash in on what they believe is a bonanza of economic development related to natural gas drilling in the state’s Marcellus Shale region. What’s been less in evidence, though, is much discussion about whether the state’s current direction on vehicle fuels is one that experts on energy policy and climate change is one that makes sense.

Not everyone who follows policies in this arena is as optimistic about natural gas vehicles as West Virginia political leaders seem to be. For example, the Union of Concerned Scientists makes this recommendation:

Natural gas can play a role in reducing global warming pollution, but using it for transportation fuel does not represent one of the best climate solutions. For example, a natural gas-powered Honda Civic delivers about a 15 percent reduction in global warming pollution compared with a conventional gasoline-powered Civic, but a gasoline-electric Civic hybrid costs less and delivers a 30 percent reduction in emissions.

While it can make sense to use natural gas for vehicles fueled in a central location, such as taxis or delivery vehicles, expanding natural gas use in passenger vehicles would require major investments in new fueling infrastructure that would become obsolete as cleaner technologies come to market. A better use for natural gas in the transportation sector would be as a resource to generate cleaner electricity for plug-in vehicles or hydrogen for fuel cell vehicles.

T.J. Meadows of IGS Energy-CNG Services announces his company’s intention to build four natural gas filling stations along the Interstate 79 corridor at a cost of $10 million. Attending the news conference at the site of one of the stations near the Spring Street Foodland in Charleston are Rick Blankenship (left) of Antero Resources; Sen. Brooks McCabe, D-Kanawha; Kanawha County Commission President Kent Carper; Gov. Earl Ray Tomblin; Charleston Mayor Danny Jones; Chesapeake Energy’s Phil Pfister and Steve Perdue of EQT Corp. Gazette photo by Chris Dorst.

When I inquired about this yesterday, Gov. Tomblin’s office referred me to one New York Times story that was published more than a decade ago that focused on a similar tax credit program in Arizona being too popular among that state’s residents:

It sounded irresistible: buy a car that burns something other than gasoline and the state pays up to 50 percent of the cost; convert an existing gas-burner to alternative fuels and the state pays 100 percent of the cost of the conversion.

No alternative fuels depot at home? Not to worry. The state will cover that $7,000 as well, or up to $400,000 for a commercial alternative-fuels depot. It is all courtesy of a measure proposed and adopted in Arizona at the last minute of a legislative session in April.

Sound too good to be true?

More than 22,000 Arizonans did not think so, and since July they have filed applications for an average of $21,966 each, which would cost the state nearly $500 million from a program that was supposed to cost less than $5 million a year. State officials now say the eventual costs could reach $800 million once applications being processed are counted.

With costs of the program approaching 7 percent of the state’s annual $6 billion budget, Gov. Jane Dee Hull called an emergency session of the State Legislature two weeks ago to enact a one-year moratorium on the program to stop the hemorrhage from the state’s coffers.

Also yesterday, Deputy Revenue Secretary Mark Muchow told me that, based on reading articles in the media, his conclusion is that electric cars aren’t very popular and don’t work very well:

The public doesn’t appear to be interested in these cars and the functionality of these cars appears to be suspect.

Now, I don’t claim to be an expert in this area, either. But a recent story in the San Francisco Chronicle portrays the situation as not nearly as clear-cut as Muchow makes it sound. For example, while the story reports this:

U.S. households paid on average almost $3,000 last year for gasoline, according to the U.S. Energy Information Administration, almost 4 percent of their pretax income.

But sales of the Leaf, the plug-in hybrid Chevy Volt and similar cars have fallen far short of expectations, despite a $7,500 federal tax credit and an additional $2,500 rebate in California, with many other states offering similar sweeteners.

That has led some analysts to conclude that the cars will never escape their small niche.

 But it also reported this:

Drivers who have made the leap to electric seem to love the cars. The Volt ranks higher than any other car in customer satisfaction, according to Consumer Reports, and is outselling half of other car models, including the Mercedes S class and several Audis.

General Motors thinks the market is so promising that it is introducing a Cadillac extended-range plug-in, which like the Volt will have a gas-powered generator to charge the battery when it gets low, as well as an all-electric vehicle called the Spark, said Shad Balch, General Motors’ spokesman for environment and energy.

A report from Gov. Tomblin’s natural gas vehicle task force is due out later this week, and lawmakers could soon begin work on the governor’s changes to the state’s current tax credit program. It will be interesting to see if questions like these are addressed in any meaningful manner, or just brushed aside and ignored.