Incentives helping make Utah the hot spot for natural gas cars

Published: Sunday, Aug. 26 2007 12:08 a.m. MDT

Salesman Ron Brown of Ken Garff Honda shows a Honda Civic GX, which qualifies for federal and state natural gas tax credits.

Pennsylvania car dealer John Jakobsen watched a Ford Crown Victoria go unsold at the auction for several weeks in a row before curiosity got the best of him.

The bifuel car could run on gasoline or natural gas. He guessed there were no bidders because natural gas costs more on the East Coast than gasoline, so the bifuel setup just meant more hardware under the hood to take care of. But Jakobsen smelled a bargain and, with a really low bid, found himself with a bifuel car on his lot.

His head began to spin when the car sold within hours after he listed it on eBay. It was a real find for a taxi company across the continent in San Francisco, where natural gas for vehicles currently sells for the equivalent of $2.04 per gallon — a real bargain compared to gasoline.

Jakobsen did a little research and found natural gas prices were even better in Utah. A lot better — 73.6 cents a gallon. "Seventy-three cents a gallon does have a draw to it," he said. He was already thinking, "How do I zero in on that?"

Now Jakobsen snaps up every CNG (natural gas) car he can find and advertises them on Web sites that have high visibility in Utah and California.

Tax incentives and fuel prices have made Utah the nation's sweet spot for vehicles powered by natural gas.

"We have the cheapest gas in the nation," said Gordon Larsen, Questar Gas' supervisor of natural gas vehicles. "The demand here is really, really high," he said. "Fleets have been running on it for some time, but the general public is really taking it up right now."

With natural gas costing the equivalent of 73.6 cents per gallon, a car that gets 25 miles per gallon can go 100 miles for $2.94, compared to $10.80 with gasoline at $2.70 a gallon. Questar's vehicle fueling stations have seen a 60 percent increase in use over the past two years, Larsen said.

North Ogden resident Marty Phipps caught the CNG bug because of the expense of his daily commute to Salt Lake City. There are now four CNG cars in his household. "As a family, we know where all the natural gas stations are in Utah, Idaho, Wyoming and Nevada," he said. "I want people to know that there are ways to save money on gas and help keep our air clean for a very reasonable price, not to mention the great tax advantages."

This is the place — for fuel

Questar passes along a 50-cent-per-gallon tax incentive that has driven prices in Utah to record lows. The natural gas utility has also created an infrastructure of fueling stations throughout the state that is second only to California's.

CNG cars can even be refueled at home using a device that connects to a house's natural gas lines. That gives motorists even more independence from the filling station, though Questar's pass-through subsidy makes fuel cheaper at one of its stations.

Environmental, tax benefits

Emissions from CNG vehicles are dramatically lower than gasoline or diesel vehicles. "Gasoline pollutes when they refine it, when they put it in the truck, when the truck puts it in the gas station's tank, when it's pumped into the car and when it's burned in the engine," Larsen said. "When you look at the full cycle of pollution, the difference is huge."

Federal environmental policy is the foundation for a number of alternative-fuel tax credits.

Consumers who buy a new vehicle that runs only on natural gas qualify for a $4,000 tax credit. Utah will kick in another $3,000 in tax credits through its own program. The "gotcha" there is that the only vehicle that qualifies is the Honda Civic GX, and in Utah, only Ken Garff Honda downtown sells them, further limiting the supply of qualifying vehicles. The CNG Civic sells for about $25,000. Minus the tax credits, the price is about $130 more than the Civic's gas-engine counterpart.

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