Each truck uses a 6.0-liter V8 engine capable of operating with gasoline or compressed natural gas (CNG). This engine has been designed to maintain performance levels no matter which fuel is used. GM has estimated a range of about 650 miles between refueling stops, topping the market among vehicles using CNG. GM worked with supplier IMPCO to develop a single-tank storage system that maintains cargo space while providing enough fuel for long journeys. These eco-friendly trucks meet emissions standards established by the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB).

A prospective customer places an order with a local GM dealer but each truck is sent to IMPCO for modification. The Fort Wayne plant constructs the frame and essential components for each unit but IMPCO installs the fuel storage system required for bi-fuel use. GM handles additional customization requested by customers at local dealerships. This elaborate process and heightened production costs lead to a price premium of $11,000 per truck. GM charges a retail price of $29,300 for these models, placing the base cost just under $40,000.

GM has already worked with utility firm Chesapeake Energy on delivery of bi-fuel vehicles by next year. The company has committed to replacing 5,000 fleet vehicles with CNG models in the near future. Chesapeake hopes to purchase GM bi-fuel models as part of this transition. An estimated $11 million could be saved per year in Chesapeake’s fuel costs by using vehicles powered by CNG. GM’s efforts to reduce emissions and fuel consumption outside of passenger vehicles demonstrate the slow but steady pace of change in the auto industry.

Tesla Motors received $10 million through CEC while promising to supply at least $50 million for production of the Model X. This all-electric SUV promises 250 miles per charge as well as stylish “Falcon Doors” when production begins in 2014. An important factor for the CEC in choosing Tesla Motors for 50% of the grant take was the creation of new jobs. Tesla already employs 3,000 people in Fremont, California with a majority of workers on the factory floor. This workforce could expand by about 500 with the help of the CEC grant.

Another major recipient of CEC grant funds is Zero Motorcycles, which hopes to significantly expand production of electric bikes in Scotts Valley. The manufacturer of all-electric motorcycles once relied on factories in China to keep costs low enough to accommodate customers. Zero Motorcycles recently shifted all production to California and will use a CEC grant worth $1.8 million to expand factory capacity. CEC hopes that Zero Motorcycles lives up to its goal of quadrupling production not only to reduce motorcycle emissions but create jobs in a state hit hard by the economic downturn.

The CEC continued to pursue other approaches necessary for green vehicle infrastructure. The City of Mount Shasta received $200,000 to complete a PEV readiness plan for three surrounding counties, paving the way for plug-in vehicles. A total of $2.5 million was issued to A-Z Bus Sales, Big Valley Ford and 16 other recipients to offset price differences between alt-fuel and traditional vehicles. Valley Garbage and Rubbish in Santa Maria received $300,000 to create a CNG fueling station necessary for fleet conversion. The Alternative Renewable Fuel and Vehicle Technology Program acts as a model for effective investment in the future of alt-fuel vehicles.

Collaboration between Eaton and the University of Minnesota could yield a major breakthrough in home refueling. An Eaton CNG station would use liquid rather than mechanical means to compress natural gas, which would reduce maintenance concerns. Engineers at Eaton’s Innovation Center and Advanced Hydraulics Group will develop heat exchanging technology that should surpass products currently on the market. The resulting prototype increases transfer efficiency between station and vehicle and requires fewer components to achieve this transfer. Eaton hopes that a CNG station based on these dynamics would not only be less expensive upfront but simpler for first-time owners unfamiliar with the technology.

The primary goal for Eaton and other MOVE Project participants is to decrease the costs of alt-fuel infrastructure. The U.S. Department of Energy offered $30 million in grants to 13 corporations throughout the United States focused on CNG infrastructure. Eaton Corporation estimates that home refueling stations currently range from $5,000 to $10,000 per unit. Expensive infrastructure for the home combined with limited selection of CNG vehicles and poor public infrastructure keeps this alternative fuel on the backburner. The projected cost for an Eaton CNG station would be about $500 with production slated by fall 2015.

Eaton’s announcement follows on the heels of similar announcements by GE and REL Inc. that should alter consumer interaction with CNG. Natural gas prices hover around $2 per gasoline gallon equivalent (GGE) throughout the Upper Midwest. Energy companies spent significant resources in the past decade extracting natural gas reserves in the United States to meet increasing demand. The economic slump along with an overabundance of CNG supply has kept prices relatively low over the past year. MOVE Project recipients like Eaton Corporation could tap into this cheap fuel source with residential stations that are convenient for consumers. The burden of promoting CNG as an alternative to gasoline is shifting to automakers as infrastructure development kicks into high gear.

GE, Chart Industries and the University of Missouri recognize problems with the niche market for residential CNG stations. The average refueling station available to homeowners costs about $5,000 and requires about eight hours to refuel a car. Prospective consumers are concerned with driving range as well as the inconvenience of finding CNG refueling stations. A 28-month development process with a budget of $2.3 million should yield solutions to these concerns. GE will design a home refueling station that fits ARPA-E’s goals for a retail price around $500 per unit with refueling times averaging one hour. Chart Industries and the University of Missouri will engineer and produce stations that require fewer parts to safely handle CNG.

Researchers at GE gained experience with CNG technology when developing CNG In A Box for commercial clients. This product allows consumers to turn natural gas into CNG in a few simple steps. CNG In A Box features compact compressors that take natural gas from a nearby source and create CNG that can be easily delivered to machinery or vehicles. GE and its partners hope that the ethos of simplicity used in CNG In A Box can be translated into home refueling stations.

The CNG vehicle market has advanced ahead of infrastructure development, creating major problems for automakers and consumers. Consumers around the world have purchased 15 million vehicles powered by CNG as of early 2012. The American market represents a small sliver of this total with only 250,000 units registered thus far. Automakers including Toyota and Ford have experimented with CNG drive systems though market forces have kept these vehicles on the shelf. Consumers deluged with news about hybrids and electric vehicles might not appreciate CNG’s potential. This ARPA-E project could move away from traditional notions of vehicle refueling and empower consumers interested in green transportation.

Every state resident is eligible for the OCC rebate program by applying through Oklahoma Natural Gas (ONG). Consumers interested in purchasing new CNG vehicles can receive rebates up to $2,500. A dual-fuel vehicle including a retrofitted CNG system is eligible for $1,500 in rebates. Homeowners interested in refueling stations on their properties can apply for $2,500 OCC rebates. These rebates are limited to three rebates per customer each year.

Funding for the OCC rebate program is taken from CNG users rather than public coffers. A 25 cent per gallon surcharge will be applied on CNG purchases from ONG fueling stations located throughout the state. This funding mechanism ensures growth in the rebate program as increased CNG purchases will yield greater funds for reimbursement. The OCC also avoided frustration by traditional drivers by applying the tax on CNG users who avoid more expensive excise taxes. A gallon equivalent at an ONG station with the surcharge should still be lower than CNG pumped from private providers due to the volume of natural gas purchased by the utility.

The natural gas market has taken a nose dive over the past year due to excessive supply and steady demand. State and federal agencies continue to push CNG as a low-emissions alternative through tax credits as well as subsidies. The U.S. Department of Energy notes that states have created 348 laws promoting CNG use as of early 2012. Congress has allowed incentives for CNG ownership to lapse including a 30% tax credit on refueling infrastructure and a 50% credit for new vehicle purchases. A concerted effort to develop infrastructure that leverages low natural gas prices and incentivize CNG ownership should place this alternative fuel ahead of the pack.

New Zealand initiated an exemption on RUCs for light-duty electrified vehicles in 2009 with expiration set for 2013. The exemption has been extended to 2020 for all-electric vehicles weighing less than 3.5 tons. This exemption will extend to plug-in hybrids using diesel instead of gasoline once these models are introduced. The federal government had previously encouraged the use of diesel engines instead of gas to achieve fuel economy increases. This exemption eliminates an important barrier to entry for EV manufacturers looking at the New Zealand market.

The recent changes to RUC policy increase rates for traditional vehicles alongside increases to the fuel tax charged at the pump. Diesel vehicles driven on New Zealand roads will be charged RUC rates of 4.1% starting in August. Fuel taxes charged to natural gas and gasoline vehicles increase by two cents per liter, which should increase average operating costs by $30 per year. The New Zealand Transport Agency estimates that operating costs will rise by 0.4% for commercial operators and 0.9% for individuals due to this increase. This revenue stream supplements a road construction fund of $2.65 billion collected in the past two years.

Regional and federal governments throughout the world are contending with the thorny question of how to fund roads with dwindling gasoline taxes. Motorists are cutting down on mileage due to high fuel prices and the introduction of highly efficient models cuts down on fuel consumption. Solutions including EV ownership taxes and tolls have been introduced in the United States to combat budgetary shortfalls. The New Zealand solution seems sensible enough for hybrid and EV owners though traditional drivers are squeezed for more money to fill the funding gap. Given the ongoing economic malaise throughout the world, governments may need to combine these methods to encourage EV adoption while funding roadways.

NVGA Europe’s estimates about the Italian CNG fleet include privately owned passenger vehicles as well as commercial trucks. The total CNG fleet operating in Italy grew from 676,850 units in 2009 to 785,000 units by May 2012. Trucking companies and sanitation firms throughout the country use about 1,200 CNG vehicles. Cities have also invested heavily in natural gas vehicles, operating more than 2,300 buses and shuttles on a daily basis.

The trend toward CNG vehicles in Italy stems as much from fuel savings as innovation by automakers like Fiat. NVGA Europe estimates that fuel savings per kilometer for a typical sedan powered by CNG is 60% compared to gas engines and 30% compared to diesel engines. Italian automaker Fiat has encouraged development and sales of new car models with optional CNG systems spanning from sporty coupes to luxury models. Another popular avenue for CNG use is the active market for retrofitting kits and aftermarket products that turn European models into eco-friendly vehicles.

Broad adoption of CNG models throughout Italy shows the flexibility of this alt-fuel technology. Transit operators and government agencies have been courted by retrofitters for years with promises of reduced fuel costs. The penetration of CNG vehicles into the consumer market shows the growth of refueling infrastructure and a broader range of available models. A network of 850 refueling stations throughout Italy is extensive enough for travelers to take weekend trips without worrying about their gas tanks. Italians face difficult times ahead but an eventual recovery based on green transportation could be possible based on NVGA Europe’s estimates.

State grants through the Texas Clean Fleet Program will be used largely to reimburse upfront costs for alt-fuel vehicles. The program defines alt-fuel vehicles as any vehicle powered by electricity, compressed natural gas (CNG), hydrogen, propane or M85. The Texas Commission on Environmental Quality will also select qualifying hybrids that use at least two energy sources for propulsion. Grant recipients will receive between 50% and 80% reimbursement for the costs of replacing traditional vehicles.

Major criteria for this round of grant funding including emissions reductions, fleet size and public demonstrations in Texas cities. Each applicant must achieve an estimated cut of 25% in nitrogen oxide emissions to become a finalist. Successful applicants are required to operate a fleet of at least 75 passenger vehicles and plan replacement of at least 20 vehicles. The Texas Commission on Environmental Quality requires funded projects to operate in Austin, Corpus Christi, Dallas-Fort Worth, Houston, Port Arthur, San Antonio, Tyler-Longview or Victoria. These operations must last at least five years or 400,000 miles in order to educate the public about alt-fuel vehicles and encourage investment in local industries.

The U.S. Energy Information Administration (EIA) notes that Texas has the second largest fleet of alt-fuel vehicles behind California. The Lone Star State combines research universities including the flagship university in Austin with energy industry powers based in Houston, San Antonio and Dallas. Texas is often painted as a conservative stronghold locked in thrall of the oil industry. The Texas Clean Fleet Program makes strides against this perception albeit with a relatively small investment. Applicants seeking $5.7 million in state grants are pushing Texas toward an energy industry that can be profitable as well as environmentally responsible.

The Xcelsior XN40 was converted for CNG operation and manufactured for Culver CityBus over the past year. This public transit operator paid $11 million for 20 CNG Xcelsior XN40s to replace CNG buses dating back to 1998. New Flyer has a long relationship with Culver CityBus as the operator rotates 52 buses manufactured by the company. The Xcelsior XN40 CNG improves on curb weight, fuel economy and operating noise compared to previous CNG models. Culver CityBus and New Flyer also collaborated on an all-electric HVAC unit that cuts down on emissions especially during hot summer days.

New Flyer also recently completed manufacturing of a 40-foot E-Bus that borrows heavily from the Xcelsior design. This $3 million project was funded in part by Manitoba Hydro, Red River College and Mitsubishi Heavy Industries. The E-Bus features a 120kWh Mitsubishi MLiX battery pack built to last 3,500 charging cycles. Mitsubishi streamlined battery design and cell placement to squeeze as much power out of the pack as possible. The Province of Manitoba and Red River College will monitor the E-Bus for performance changes during a two-year trial run in Winnipeg.

Deliveries in California and Manitoba allow New Flyer to tout its sustainability credentials to potential customers. Culver CityBus has already proven a reliable customer to New Flyer and serves more than five million riders per year in Southern California. The two-year prototype test in Winnipeg could prove trickier as New Flyer hasn’t ventured far from proven CNG designs. The company benefits from collaboration with Mitsubishi and provincial partners that reduces risk. New Flyer should invest heavily in all-electric buses if the E-Bus withstands the cold temperature and inclement weather of Winnipeg over the next 24 months.

The big winner in this round of grant funding is CALSTART, which received $14.4 million for an alt-fuel demonstration project. CALSTART plans road testing and public demonstrations of 29 alt-fuel vehicles throughout California. These vehicles range from hybrid-diesel commercial vehicles to all-electric taxis on the verge of hitting the market. Grant funding allows CALSTART to test nine varieties of drive system to determine their feasibility on local roads. This significant investment allows CALSTART to educate the public about green transportation and create more than 600 jobs by 2015.

A majority of the projects benefiting from state grants are focused on developing biofuel infrastructure. Propel Biofuels received $10.1 million to install and maintain 101 E85 fueling stations at existing gas stations around the state. These stations could potentially serve 500,000 flex-fuel vehicles by tripling the existing number of refueling centers. SacPort Biofuels Corp. was granted $5 million to open a biomass diesel production facility adjacent to the Port of West Sacramento. This production center could generate 365,000 gallons of biodiesel per year. Springboard Diesel will use $758,000 to open a biodiesel plant in Chico capable of producing 1,000 gallons per day. Whole Energy Pacifica received $25,000 to expand a biofuel blending facility in Richmond.

The California Energy Commission also committed significant funds to smaller demonstration projects around the state. The Gas Technology Institute has been allotted $4.5 million for two demonstration projects in conjunction with hybrid technology groups. Researchers at the Gas Technology Institute are planning demonstrations of three plug-in hybrids with the U.S. Hybrid Corp. This funding also helps the Institute fund testing for a CNG-powered Navistar Maxxforce truck sponsored by Clean Air Power. Reynolds Buick-GMC in West Covina is receiving $16,000 to offset costs of leasing two CNG pickup trucks to California residents.