Colorado, Oklahoma ask carmakers to raise production of natural-gas cars

Article by Anita Panait, on July 19, 2012

The governors of Colorado and Oklahoma held a meeting with executives from General Motors Co., Ford Motor Co. and Chrysler Group LLC to ask for more cars and trucks that run on compressed natural gas-powered engines. Colorado and Oklahoma joined 11 other states, most of which are rich with natural-gas stockpiles, in committing to purchase thousands of CNG-powered vehicles annually for their fleets. According to the governors, choosing CNG as fuel is patriotic and non-partisan, as marketable reserves of natural gas in the U.S. have increased and its per-gallon price has dropped compared with gasoline or diesel.

Colorado Gov. John Hickenlooper and Oklahoma Gov. Mary Fallin met with groups that include Steve Carlisle, a vice president in GM; Mark Fields, president of the Americas for Ford; and Peter Grady, head of dealer networks in Chrysler. The states are expected to issue a joint request for proposals on July 24, 2012. Hickenlooper said in an interview with Bloomberg that the states want to partner with Detroit carmakers in a form of business proposition.

The US is currently the world’s largest producer of natural gas, thanks to a massive supply of natural gas from North America's shale rocks. This huge supply has forced natural gas prices to record discounts versus crude oil. In a speech in January, US President Barack Obama called the country the "Saudi Arabia of natural gas." He likewise urged companies and the federal government to purchase more vehicles powered by compressed natural gas for their fleets. Sam Brothwell, a senior utility analyst for Bloomberg Industries remarked that the issue is not the supply of natural gas, but the demand for the fuel. This situation is what forced gas-producing states to call for a new end-use for CNG.

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