President Obama is pushing to give natural gas vehicles like the Honda Civic CNG as much tax-credit help as electric vehicles. The motivation is simple. The U.S. has an abundance of natural gas that could put a major dent in America's consumption of foreign oil, and a significant push toward nat-gas vehicles would provide competition for oil companies and potentially drive down prices of oil and gasoline.
Gas prices at the pump are about $3.76 a gallon nationally, and have already reached $6 in some parts of the country.
Today, there are a handful of natural gas vehicles sold, mostly pickup trucks and commercial vehicles. There is just one compressed-natural-gas vehicle sold today, the Honda Civic CNG. Because the $4,000 tax credit that supported it expired in 2010, the price is just one of the obstacles stalling consumer interest. The car costs $26,155 versus a starting base price of $15,805 for a gasoline-powered Honda Civic.
President Obama's new legislation proposal to support alternative energy vehicles would bump the tax credit for electric vehicles from $7,500 now to $10,000 and institute a new credit for natural-gas vehicles that would cover half the cost premium for the vehicles--in the case of the Honda, it would add up to about $5,000.
But that isn't the only speed-bump for change-wary U.S. drivers. There are only about 1,000 CNG filling stations in the U.S., versus about 160,000 gasoline stations. An alliance between General Electric and Chesapeake Energy announced this month will add 250 additional CNG pumps by year end.
Though consumers have been historically skittish about handling natural gas, the pumping process is just as simple and safe as pumping gasoline.
"I spent a week in a Civic CNG recently, and found it to be not only perfectly fine to drive but exceedingly easy to re-fill on my own at a CNG pump where I live in Ann Arbor, Mich.," said AOL Autos Editor-in-Chief David Kiley. "Building up a CNG infrastructure and selling more CNG cars is the no-brainer of all-time if we can muster the political resolve to do it – it makes even more sense than electrics," Kiley added.
Natural gas vehicles tend to have shorter driving ranges than gasoline vehicles – the Civic goes about 200 miles on a fill-up versus over 300 for a gasoline version – fuel economy is comparable. The CNG Civic gets 27/38, compared with 28/36 for the gasoline version.
View Gallery: 2012 Honda Civic Natural Gas
Is it safe? The Insurance Institute for Highway Safety (IIHS) has named the Civic Natural Gas a Top Safety Pick. It is no more prone to dangerous results in a crash than a gasoline-powered Civic.
Has it been popular? Only about 13,000 natural gas Civics are the road, though it has been on sale since 1998. It has a cult following among its owners, but it hasn't been marketed in every state until this year.
Are there more on the way? Chrysler said this month it was adding a compressed-natural-gas/gasoline hybrid Ram pickup to its lineup this year. Ford sells a CNG Ford pickup, and GM is adding one later this year.
How do the costs shake out? GE and Chesaspeake Energy say that at today's prices, a vehicle driving 25,700 miles a year would save $1,500 a year from using natural gas rather than gasoline. If an owner, however, had a natural gas compressor installed in their garage for a cost of about $3,000, one could fill up a tank today at home for about $7, compared to over $50 for gasoline.
Is it cleaner and greener? The State of California says CNG vehicles can reduce smog-forming emissions of carbon monoxide by 70%, non-methane organic gas by 87% and oxides of nitrogen by 87%. Also, CNG vehicles typically have 20% fewer greenhouse gas emissions than gasoline powered cars. Civic CNGs are eligible to be driven in the state's High-Occupance-Vehicle (HOV) lanes.
What's the future? The cost of installing additional fuel tanks and other special parts in small-scale production make natural gas vehicles more expensive. But a push to increase filling stations and tax credits to push production and purchase will drive down the overall cost.
President Obama says he is pursuing an "all of the above" strategy when it comes to boosting alternative-energy vehicles to lower greenhouse gas emissions, reduce dependence on foreign oil and give more competition to oil companies.
What are the politics? But in Washington, in an election year, nothing is easy. Conservative organizations opposed to tax credits for alternative energy vehicles and funded by the oil lobby are sending letters to senators urging a "no" vote on a bipartisan measure sponsored by Sens. Robert Menendez, D-N.J., and Richard Burr, R-N.C., that would expand tax credits for buyers of natural-gas-powered trucks and installation of fueling stations as well as production tax credits for manufacturers of vehicles that run on natural gas. Republicans have accused Obama of wasting tax money on alternative energy programs.
Republicans may well block Obama's entire energy push unless the President and Democrats relents on blocking approval of TransCanada Corp.'s Keystone oil pipeline that would pump oil from Canadian oil sands into the U.S.