Legislation Set to Boost CNG Vehicles

Senate May Boost Outlook for Compressed Natural Gas Cars

Written by Green Chip Stocks
Posted May 21, 2010 at 4:56PM

First, the bad news: Summer gas prices are expected to hit our wallets at $3.25/gallon this year…

And if you live in New York City or San Francisco, you can expect it to be anywhere from $3.75 to$4.25 per gallon.

And now the good news: The Journal of Commerce reports that the government is finally doing something to help you with the steady rise of gas prices these past several years…

Last Wednesday, the Democratic tag team of Senators John Kerry and Joe Lieberman teamed up to introduce the American Power Act (APA), an extension of the Energy Policy Act, which established tax credits for the purchase of natural gas powered vehicles in 2005.

In addition to extending the tax credits of the previous bill for another 10 years, the APA would:

  • Increase the tax credit amount depending on the size of the vehicle, as well as extend these credits to fleet owners;
  • Make bi-fuel vehicles eligible for the tax credit;
  • Create "natural gas bonds" that would promote government purchase of natural gas vehicles.

In addition to another bill running through Congress — New Alternative Transportation to Give Americans Solutions (NAT GAS) Act — the natural gas vehicle industry has never seen support quite like this.

"People from across the ideological spectrum are standing by us, ready to line up in support of this plan. Any time you see me and [oil tycoon and natural gas proponent] T. Boone Pickens urging the Senate to pass something, you know it's a genuine effort to bridge the old divides," Kerry said.

In response to the bill, the ETF United States Natural Gas Fund (UNG) shot up 6 percentage points, while the Dow was tanking -2%.

Natural gas-related companies also saw their shares power through the depressed market; nat gas fueling firm Clean Energy Fuels (CLNE) was up 5%, while nat gas engine systems designer Fuel Systems Solutions (FSYS) was up 9%.

There’s no arguing — the future for natural gas investment is looking bright

"Natural gas is the cleanest burning alternative transportation fuel commercially available today and can reduce greenhouse gases emissions by almost 30 percent. We are very encouraged to see that support for natural gas vehicles is a part of this climate legislation," said Richard Kolodziej, president of NGVAmerica.

He continues, "The United States is behind many other countries in using natural gas as a transportation fuel, and the provisions in this legislation will encourage more fleets to switch to clean burning, domestically produced natural gas."

Between the Congressional bills and the Obama administration's vow to wean us off foreign oil, the demand for natural gas is only going to increase from here on out.

Not only is the fuel cleaner than oil and coal, but the United States has a very abundant supply of it —  to outlast oil by at least 20 years.

Natural Gas is Heating Up

Across the United States, entrepreneurs are expanding the natural gas markets by pushing outside the boundaries of powering cooking and heating appliances, especially as oil's imminent production decline becomes more apparent to the general public.

My Green Chip Stocks co-editor Nick Hodge has covered natural gas investments before, and he's preparing another report for release sometime in June.

Nick thinks Kerry’s bill and the current economic climate and oil market conditions are going to make the natural gas vehicle stocks ripe for triple-digit gains…

Natural gas will be on our radar for quite some time. Stay tuned to Green Chip Stocks for further analysis on this booming cleantech fuel.

Yours in green profits,