Wednesday, July 22, 2009

House Okays $150 Million CNG Program; Why CNG Conversion is Expensive

Several bits on natural gas. First, the US House of Representatives passed a $150 million for a five-year program aimed at CNGV research:

By a vote of 393-35, the House passed the bill that authorizes the Energy department to conduct a five-year program of natural gas vehicle research, development and demonstration, authorizing $30 million annually starting in the
2010 budget year.

The research program is to aid "the continued improvement and development of new, cleaner, more efficient light-duty, medium-duty, and heavy-duty natural gas vehicle engines."

The bill also seeks to improve the reliability and efficiency of natural gas fueling station infrastructure and boost the use of natural gas engines in hybrid vehicles.
The bill was written by Rep. John Sullivan, R-Okla.

Secondly, Robert Rapier recently posted an email from Marc J. Rauch, Executive Vice President of the Auto Channel, explaining why CNGV conversion is so costly:

One thing that I would like to add (assuming that you didn't already know this or learn it since posting your piece), is that the cost of CNG conversions for existing vehicles is as high as it is because of EPA licensing requirements. For an individual (or shop) to be licensed to do a conversion, the person must pay $10,000 per year, per engine type, per year of manufacture. So that if a conversion shop wanted to do conversions in 2009 for Camrys for the years 1995 to 2005, the shop owner would have to pay the government $100,000 in licensing fees. Then, if he wanted to do conversions on the same models in 2010, he would have to pay the $100,000 again, even though they are the exact same models and engines that he has been licensed on already. And if there is more than one engine involved, i.e., a 6-cylinder and 8-cylinder, the cost would double.

Therefore, if a shop owner wanted to do 10 model years of Camrys and Corollas and Celicas, and well as Honda Accords and Civics, unless there were common engines being used in these five models the licensing cost (for just one engine per) would be a half million dollars, which would have to be paid again in 2010. These fees are, needless to say, ridiculous and are only there to ensure that many don't get done (thanks to the gasoline lobby). The cost of the conversion kits are actually relatively inexpensive. If there was a sensible licensing fee (or no fee) the cost for the work could be just a few hundred dollars.

Marc also goes further saying there is a relative shortage of trained CNGV mechanics, though there's no shortage of mechanics willing to learn, and academic programs are in already in place, or are coming in place.

Several readers of this blog are adamant of integrating additional CNGVs, and CNG fueling stations. This is of the blogger's opinion, but if the federal government wants to get real about instituting CNGvs, it should greatly relax the EPA's stringent licensing fees to further encourage additional shops to become CNGV certified (though tax credits for fueling stations should be wholesomely welcomed). Otherwise, CNGV certified shops will likely gear themselves to the conversion of fleet vehicles, where money can be made, and be slow to warm to commuter vehicle conversion. This, rather than the research program, will likely spurn better health into the CNGV market.

- Brewskie

No comments:

Post a Comment