NPRA Statement on T. Boone Pickens’ Plan to Power Vehicles with Natural Gas

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Charles T. Drevna, president of NPRA, the National Petrochemical & Refiners Association, commented today on the potential impacts of switching from traditional motor fuels to natural gas to power vehicles in the United States.

Following is a statement from Charles T. Drevna, president of NPRA, the National Petrochemical & Refiners Association, responding to testimony by T. Boone Pickens at an April 14, 2010 House Ways and Means Committee hearing on energy issues:

"T. Boone Pickens is engaging in a costly fantasy when he claims that America would benefit by switching from gasoline and diesel fuel to natural gas to power our vehicles. The switch would require a hugely expensive conversion of fuel pumps at convenience stores and service stations around the country, add $6,000 or more to the price of a new car, and exert upward pressures on prices consumers pay for plastics and thousands of other products they use every day made from petrochemicals derived from natural gas.

"The U.S. Energy Department said in a 2009 report that 'widespread adoption of natural gas vehicles in the United States is unlikely' and would be impractical because of 'significant hurdles.' The report said: 'In 2008, there were only 778 service stations in the United States with natural gas refueling capability out of a total of more than 120,000 service stations.'

"Each compressed natural gas fueling station costs about $1 million more than a conventional fueling station. According to the National Association of Convenience Stores, the net profit of an average retail motor fuel station was just over $22,000 in 2008. Absent a massive federal subsidy to pay for the conversion to a natural gas retail fueling infrastructure, Mr. Pickens’ 'plan' is simply a pipe dream with little rational economic or energy policy foundation."

Note: The Department of Energy report cited is the Energy Information Administration’s Annual Energy Outlook 2009, available at http://www.eia.doe.gov/oiaf/aeo/pdf/0383%282009%29.pdf

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Steve Higley
NPRA
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