Natural Gas – Conversions, Vehicles and Technology

California Energy Commission Prioritizes Alt-Fuel Funding Goals

September 13, 2011

The California Energy Commission last week unanimously adopted the state's third annual transportation energy investment plan. The latest investment plan for the Energy Commission's Alternative and Renewable Fuel and Vehicle Technology Program prioritizes $100 million in state funds to leverage funding and investments from federal agencies, research institutions, private investors, auto manufacturers and other stakeholders.

"This innovative transportation investment program is unique in the country," said Energy Commission Vice Chair James Boyd. "The funding plan approved [Sept. 7] for fiscal year 2011-2012 builds on two earlier versions, fine-tuning California's seven-year program to increase alternative and renewable fuels and to test innovative vehicle technologies.”

Assembly Bill 118 (Núñez, Chapter 750, Statutes of 2007) authorized the Energy Commission to provide approximately $100 million annually over seven years to encourage new fuels and technologies. Funding comes from such sources as vehicle registrations, vessel registrations, identification plates, and smog abatement fees. The Energy Commission's first investment plan combined $176 million in funds from fiscal years 2008-2009 and 2009-2010. The second investment plan, for fiscal year 2010-2011, provided $83 million.

Funds from the earlier plans were used to help California entities successfully compete for federal funding provided by the American Recovery and Reinvestment Act (ARRA). Projects leveraged with California's investment of $36.5 million attracted nearly $105.3 million in ARRA funds and $113.3 million in private funding.

The 2011-2012 plan allocates $100 million to encourage this menu of transportation investments:

•$8 million to increase charging infrastructure and support for full-electric and plug-in electric vehicles, which are expected to surpass 20,000 sales in California by 2012.
•$8.5 million to support hydrogen fueling stations and to demonstrate fuel cell technology. Fuel cell vehicles are expected to number in the tens of thousands in California after 2015.
•$24.5 million to boost the number of natural gas- and propane-powered vehicles in the state and the fueling stations that support them. Natural gas- and propane-powered vehicles help to reduce greenhouse gas emissions and improve air quality; natural gas and propane prices are also less volatile than petroleum prices.
•$24 million to help develop and produce biofuels such as gasoline and diesel substitutes and renewable natural gas. California possesses a significant volume of waste suitable for creating low-carbon fuels -- from ethanol and biodiesel to biomethane made from anaerobically digested biomass.
•$5 million to expand the number of dispensers and retail outlets selling E85 -- fuel made up of 85 percent ethanol and 15 percent gasoline.
•$8 million to develop and demonstrate technology that will improve the efficiency of medium- and heavy-duty vehicles. Battery electric applications, hybrid hydraulics, fuel cells and other advanced technology can make these on- and off-road vehicles cleaner and more efficient. Although medium- and heavy-duty vehicles make up only 4 percent of the state's transportation mix, they account for 16 percent of the state's petroleum consumption and its greenhouse gas emissions from transportation.
•$10 million to fund projects that establish commercial-scale clean transportation manufacturing facilities in California. Attracting new manufacturing plants that produce alternative fuel vehicles and components will provide California with long-term jobs, environmental benefits, and increased tax revenue.
•$3 million to encourage developing innovative technologies and advanced fuels, and to take advantage of federal cost-sharing opportunities. Examples of the types of projects that could be funded include ways to improve engine efficiencies, to develop new lightweight construction materials for vehicles, or to create biofuels from new high-productivity feedstocks such as algae.
•$9 million to establish training programs to create a skilled workforce able to manufacture low-emissions vehicles and components, produce alternative fuels, build fueling infrastructure, service and maintain fleets and equipment, and explain the newly emerging transportation market. In addition to training, the program will fund sustainability research, public education and technical assistance programs.

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