Tuesday, December 21, 2010

CNG Tax Benefits in New Law

Email received from Steve Anthony, Senior NGV Account Executive at Southern California Gas Co.
From: Anthony, Steven C.
Sent: Monday, December 20, 2010 2:42 PM
Subject: CNG Tax Benefits in New Law

CNG Customers,

See the attached notice [below] from NGV America, the natural gas industry trade association, regarding the 50 cents per GGE rebate being retroactive for 2010 and extended out through the end of 2011. Congress has directed the IRS to develop guidance for submitting the rebate request for all of 2010, so you may wish to wait until this guidance is available. The legislation allows a 6 month window to submit the request for 2010.

In addition, a few tax-paying customers are eligible for very favorable tax treatment for new trucks and CNG stations.

If you have never applied for the 50 cents per GGE rebate registration number, I urge you to do so immediately on IRS Form 637. You must obtain a registration number prior to applying for the 50 cents per GGE rebate.

Steve Anthony
Southern California Gas Co.
Sr. NGV Account Executive

The notice from NGV America:
Tax Credits Extended

Friday, December 16, 2010, the President signed into law H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. Earlier in the week, the Senate passed the bill by a vote of 81 to 19 and the House of Representatives passed the bill 277-148. This tax bill was the result of negotiations between President Obama and Republicans, and will extend the 2001 and 2003 income tax cuts for all families for two years and unemployment benefits for one year. Among these and other major provisions, the bill includes some major provisions that are very beneficial to the NGV industry:

The fuel credit was extended. The bill extends until December 31, 2011 the $0.50 fuel credit for CNG and LNG when used as a transportation fuel. As expected, the extension is made retroactive back to January 1, 2010. The $0.50 tax credit for CNG and LNG had expired at the end of 2009. The tax bill includes special instructions directing the Treasury Department to develop procedures allowing for a one-time claim for any fuel used or sold in 2010.

The fueling station (infrastructure) credit was extended. The bill extends for one year the tax credit for natural gas fueling infrastructure. The extension is for 30 percent of the cost of qualified equipment up to a maximum of $30,000 and $1,000 for non-business property (i.e., home refueling). The tax credit is 30 percent and not 50 percent because Congress extended the tax credit as originally enacted in 2005 -- not according to the increased level enacted as part of the 2009 TARP legislation. The bill also allows for 100 percent expensing of the infrastructure costs, and it is our understanding that the tax credit may be taken along with a 100 percent expensing. This means that a taxpayer could claim up to a $30,000 tax credit for new natural gas fueling infrastructure and then expense the remaining cost (cost of station less tax credit amount of $30,000) all in the first year. The 100 percent expensing provision is good for equipment placed in service after September 8, 2010.

The vehicle credit was NOT extended. Despite repeated and substantial efforts by many of you with Congress, the income tax credit for the purchase of NGVs was not extended. However, there is some good news relating to tax treatment of new NGVs. The bill allows taxpayers to expense 100 percent of the cost of new capital expenditures. This means that businesses purchasing NGVs will be able to write-off the full cost of buying such vehicles in the first year instead of depreciating them over five or more years. The expensing provision does not help tax-exempt entities or private consumers who purchase NGVs (unless they can depreciate them). The 100 percent depreciation provision also applies to equipment placed in service after September 8, 2010.

Monday, December 20, 2010

Clean Cities Technical Response Service Question of the Month

The December installment of the Clean Cities Technical Response Service (TRS) Question of the Month.

Question of the Month: What information will be included on the U.S. Environmental Protection Agency (EPA) fuel economy label for new and upcoming all-electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs)?

Answer: Nissan and General Motors recently released the EPA fuel economy ratings for their new advanced vehicle models, the Nissan LEAF EV and Chevrolet Volt extended range electric vehicle (EREV*). These announcements were made while EPA and the National Highway Traffic Safety Administration (NHSTA) are finalizing regulations that would change the information currently included on fuel economy labels for all vehicles, including EVs and PHEVs.

Proposed Advanced Vehicle Fuel Economy Ratings and Labels
On September 23, 2010, EPA and NHTSA released a proposed rule to change the fuel economy labels that appear on the windows of new vehicles for sale. The goal of this new label is to provide consumers with simple, straightforward comparisons across all vehicle types. The proposed rule includes additional information that would be available for advanced vehicles, including:
  • Driving Range: The label would identify how many miles EVs and PHEVs can drive before needing to recharge and/or refuel.
  • Different Modes: For vehicles that can operate using more than one fuel or technology (e.g., all-electric and gasoline only modes for PHEVs), the label would provide fuel economy information for each distinct operating mode.
  • Energy Consumption: For EVs, the label would show energy use in kilowatt-hours (kWh) per 100 miles, as well as miles per gallon equivalent (MPGe). For PHEVs, the label would show only MPGe for all-electric mode. The MPGe rating is an important metric for comparing advanced vehicles to conventional vehicle models that are rated in miles per gallon (mpg). In the proposed rule, EPA and NHSTA included the following calculation to compare electricity as it is conventionally measured on a utility bill to gallons of gasoline: 33.7 kWh = 1 MPGe.

The final rule is scheduled to be released by the end of January 2011, and the proposed changes to fuel economy labels will likely take effect starting with Model Year (MY) 2012 vehicles. However, for those advanced vehicles that will be introduced to the market prior to MY 2012, EPA is working with individual manufacturers on a case-by-case basis to develop interim labels under EPA's current regulations that can be used prior to MY 2012 and that are consistent with the proposed labels for advanced vehicles (see Nissan LEAF and Chevrolet Volt announcement information below). For more information on the EPA and NHSTA rulemaking, please visit this EPA Web site.

Recent Announcements
The information included in the recent Nissan and General Motors announcements related to fuel economy for their advanced vehicle models follows very closely with the proposed fuel economy label changes outlined above. Most notably, the all-electric fuel economy for these vehicles is measured in MPGe, based on the assumption that 33.7 kWh of electricity is equivalent to one gallon of gasoline.

According to Nissan, EPA estimates that the 2011 LEAF has a combined city/highway fuel economy of 99 MPGe, or 106 MPGe city and 92 MPGe highway. For more information on the Nissan announcement, including a picture of the actual label, please see this Web site.

As described above, according to General Motors, EPA split the 2011 Chevrolet Volt PHEV fuel economy values into separate ratings, one representing the vehicle's fuel economy while it is operating in all-electric mode (93 MPGe) and one representing the fuel economy in gas only mode (37 mpg). For more information on the General Motors announcement, including a picture of the actual label, please see this Web site.

Though EPA has yet to formally announce these ratings, Oak Ridge National Laboratory expects the LEAF and Volt ratings to be available on the fueleconomy.gov Web site soon. Additional advanced vehicle fuel economy ratings will also be posted to fueleconomy.gov as they become available.

As always, please contact the TRS with other questions, or if you have suggestions for additional resources or a future Question of the Month.

Happy Holidays!

Clean Cities Technical Response Service Team

* Please note that for this Question of the Month, we have included EREVs, such as the Volt, in the definition of PHEVs. For more information on this distinction, please reference the Alternative Fuels & Advanced Vehicles Data Center.

Where Does Natural Gas Come From?

Animation showing where natural gas comes from. (via Clean Energy Fuels)

NGVi Classes Coming to California

Please see the forwarded information about the technical training offered by Natural Gas Vehicle Institute.
The training will take place February 8-10, 2011 in Downey, CA.

Driver & Mechanic Safety Training for CNG Powered Vehicles
This course covers information about key factors vital to insuring safe natural gas vehicle (NGV) fleet operation. The training will deliver all the information necessary to insure that the NGV fleet is driven, fueled and maintained to meet or exceed current safety standards.

CNG Fueling Stations: A Project Manager's Guide
This course provides comprehensive training for project managers on the most up-to-date methods and practices for sizing, designing, specifying, permitting and constructing a CNG fueling station.

Driver, Technician & Fuel Handler Safety Training for LNG Powered Vehicles
This course is devoted to training drivers, technicians and fuel handlers on safe driving, fueling and operating practices of today's liquefied natural gas (LNG) vehicles. It delivers all the information necessary to insure that your fleet powered by LNG is driven, fueled and maintained in a facility to meet or exceed current safety standards.

For more information about enrollment and classes in general please contact Kristy Maston at 800-510-6484 or kmaston@ngvi.com

Clean Cities Coachella Valley Region - Goods Movement - Workshop: Implementing Liquid Natural Gas (LNG) In Heavy-Duty Vehicles

Audio recording of this workshop (2hr 8min)

  1. Katie Barrows - CVAG - Introduction
  2. John Gruszwcki - CARB, Drayage Trucks Program [Powerpoint]
  3. Christopher Logan - Clean Energy, LNG Infrastructure, etc. [Powerpoint]
  4. Dr. Marius A. Paul - Introduction to his Energy Concept and Mike Bollin - SoCalGas - CalStart CNG Purchasing Program [PDF]
  5. Suzanne Seivright - Clean Cities Coachella Valley Overview [Powerpoint]

LNG Tanker In South Boston, early 1980s

LNG Boston Harbor early 1980s
Photo by Ron's Log

FERC Natural Gas 101

We attended the FERC Natural Gas 101 in San Diego last week. The course was presented by EUCI (Electric Utility Consultant, Inc.). The presenters were Richard Lorenzo, Attorney At Law, and Jay Matson, Attorney At Law - both the firm Loeb & Loeb L.L.P. out of Washington, DC. Their profiles are at the back of the presentation .

The idea here is to share with you the Federal Energy Regulatory Commission's regulation of the Natural Gas Industry. Oddly enough you'll find they have no stand on natural gas as a transportation fuel...another opportunity for Clean Cities.

First you'll find the recording of the entire meeting - next in the four-page introduction you'll find the agenda...by following the agenda you can estimate where on the tape that portion of the program may be, thus being able to focus in on areas of interest. The recording follows the presentation materials. Plus you can listen in on the interaction of the other attendee and myself with the education team's responses. All in all, very interesting and eye opening. rc3

The audio recording of the meeting - about 6½ hours.

The four-page introduction (590 KB PDF).

The PDF version of FERC Natural Gas 101 (81.3 MB, 220 pages).

The agenda:

FERC's Role in the Natural Gas Industry

  • Where Does Natural Gas Come from?
    • The origin of natural gas
    • Exploration and extraction
    • Production and Processing
    • Gathering, transportation, and distribution
  • History of the US Natural Gas Industry
    • Early attempts at regulation
    • The origin and evolution of the Natural Gas Act
    • Price deregulation at the wellhead
    • The "take or pay" problem
    • The genesis of deregulation
  • A Brief Overview of FERC's Responsibilities
    • Who and what FERC regulates
    • "First sales"
  • FERC's Jurisdictional Limitations
    • Hinshaw pipelines
    • The gathering exemption
    • The primary function test
  • Regulation of Gas Transportation
    • NGA Section 7
    • Deregulation and open access
    • Order Nos. 436, 500, 636, and 637
  • Storage of Natural Gas
    • Types and locations of storage facilities
    • Certification
    • Order No. 678
    • Reporting and posting requirements
  • Pipeline Rates
    • The "filed rate" doctrine
    • Setting initial rates
    • NGA Sections 4 and 5
    • Calculating rates, including return on equity and capital structure
    • Market-based and negotiated rates
    • Incentive rates
    • Time-differentiated and peak/off-peak rates
  • FERC Procedure
    • FERC's organizational structure
    • Types of filings/cases
    • A "typical" litigated case
    • Settlements
    • Rehearings and appeals
  • Natural Gas Markets
    • Reporting standards
    • Code of conduct
    • Order Nos. 644, 670, 673, and 677
    • Enforcement
  • Standards of Conduct
    • Order Nos. 497, 2004, and 717
    • Key definitions
    • Fundamental requirements
  • Liquefied Natural Gas
    • History
    • Consumption, production, and importation
    • Regulatory issues
    • Operational issues
    • Rates
    • Challenges to development
  • Future Challenges
    • Cap and trade
    • Carbon capture and sequestration
    • Carbon dioxide pipeline regulation
    • Pending legislation

Tuesday, December 14, 2010

T. Boone Pickens says United States continues to pay for both sides of the war

December 14, 2010. In his monthly update on the level of foreign oil imports in the U.S., energy expert T. Boone Pickens said that based on the latest figures from the Federal Reserve Economic Database, the U.S. imported 57 percent of its oil, or 327 million barrels in November 2010, sending approximately USD 28 billion to foreign countries.

"With even more evidence that money spent on foreign oil is funding terrorism, it's never been clearer that we're paying for both sides of the war," said Pickens. "Recently reported State Department cables show oil revenue in Saudi Arabia, Kuwait, Qatar, and United Arab Emirates are the single biggest source of funding for terrorist groups like Al Qaeda. This is a critical national security issue.

"The U.S. Energy Information Administration just announced that OPEC oil revenues are expected to hit $750 billion this year, which is a 32 percent increase. And in 2011, we'll see USD 100 oil. We simply cannot keep putting our country at risk by spending billions of dollars every month on foreign oil.

"If you're going to solve the foreign oil crisis you must focus on transportation – using our own abundant natural gas resources to fuel heavy-duty trucks can immediately reduce our dependence on OPEC oil; improving our national security while strengthening our economy. It's time for the American people to call their elected officials and tell them to act."

The Pickens Plan to encourage more heavy-duty fleet vehicles to run on domestic resources has been included in several pieces of legislation introduced in the House and Senate.

Monday, December 6, 2010

Impact of the Midterm Election on Energy Policy Webinar, December 16

EUCIImpact of Midterm Election on Energy Policy

December 16, 2010 :: 2:30 PM Eastern Time

Presenters will discuss key victories and losses, recently announced committee assignments, and the election's impact on energy policy at the federal level. Additionally, presenters will give insight into the energy debate at the state level and how that may impact energy development.

PDF Brochure  |  Pricing and Registration

Topics Include
  • What happened: the final tally, how those in power got there,
    lame duck session recap
  • Who the new players are: key names and states
  • Outlook for 112th Congress: House committee assignment and chair
  • Potential renewable energy and energy efficiency legislation: RPS, extension of tax credits and new tax credits, continuation of the DOE loan guarantee program , energy efficiency , climate change
  • Impact to traditional generation sources: air quality issues, FERC, nuclear
  • Environmental topics: key players in new House (leadership and committees), Congressional oversight of EPA, forthcoming EPA regulations, Yucca Mountain and Arctic National Wildlife Refuge
  • State politics and energy: impact on projects in pipeline, legislative attitudes, leadership review

Full Agenda

Instructed By

Bonnie A. Suchman, Of Counsel, Troutman Sanders
David M. Konisky, Assistant Professor, Georgetown Public Policy Institute
Glen Andersen, Energy Policy Analyst, National Conference of State Legislatures
Meghan McLaughlin, Grassroots and PAC Specialist, American Public Power

Instructor Bio
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Friday, December 3, 2010

"Thirty-nine percent of car shoppers are considering a hybrid or electric vehicle for their next new-car purchase"

While the biggest bang for the environmental buck is for fleets to convert to alternate fuels, we’re always interested in the public’s response to the topic, too. So we were particularly pleased to see that when Consumer Reports recently interviewed 1700 people to see whether they would purchase a vehicle powered by something cleaner than gasoline, one-third responded affirmatively. They expressed interest in hybrid and flex-fuel vehicles, followed by natural gas, propane, hydrogen fuel cell and biodiesel. Click here for full details.