CNG Developer: Incentives? We Don't Need No Stinking Incentives

Bertel Schmitt
by Bertel Schmitt

“We do not need incentives for natural gas technology to drive adoption,” Bill Larkin, CFO of Westport Innovations, a Vancouver-based developer of technology that allows truck and bus engines to run on natural gas, told Reuters in an interview:

“It actually hurts the investment in this technology because the U.S. government has been dangling this carrot … and so investments are delayed.”

While billions of tax payer money are spent on electrification programs with dubious prospects ( and a few certain duds,) the U.S. sits on a mountain of natural gas. Prices of natural gas are coming off decade lows as production soars from U.S. shale fields.

Larkin is glad that the U.S. Senate’s rejected proposed tax incentives for long-haul trucks and commercial vehicles to switch to CNG. At about $1.33 per gallon, the cost of CNG is around half of gasoline, more than enough of an incentive to make the relatively low-tech switch. Natural gas produces lower emissions of nitrogen oxides, particulate matter and greenhouse gases than gasoline or diesel.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Geekcarlover Geekcarlover on Oct 03, 2012

    I think the problem is the Govt's maybe/maybe not approach to incentives. There are many willing to invest in expanding this technology, but don't want to use their own money if the government is going to throw money at them or their competitors. So everyone sits and waits.

  • Jacob_coulter Jacob_coulter on Oct 04, 2012

    I'm against government subsidies and corporate welfare, even if it's something I believe in. but I do think there are "pro-market" policies that can encourage CNG development without having taxpayer subsidies. An example: How about giving generous CAFE credits to auto manufacturers that produce CNG vehicles from the factory to get the ball rolling? Also, I do see energy independence as a national security issue. CNG is the closest thing to a stop gap solution I've seen. It's also MUCH cleaner and would be a boon to America's economy.

    • Redmondjp Redmondjp on Oct 04, 2012

      I'm with you, but CNG vehicles need a belt & suspenders approach in order to be successful. CNG-powered cars are useless without the refueling infrastructure in place. Chicken? Egg? The infrastructure issue is the more complicated problem to solve IMO (and it's not because of technical issues, just to be clear).

  • Sooke Sooke on Oct 06, 2012

    I believe CNG tanks have to be replaced every ten years, for safety reasons.

    • Highdesertcat Highdesertcat on Oct 07, 2012

      When I was stationed with the US military in Germany during the seventies, the CNG tank in my Opel Ambassador had to be replaced every five years, as opposed to the LPG tanks in cars and trucks which had to be replaced every ten years (for safety reasons). Actually, the cost was reasonable (380 DM for CNG, less for LPG) and the annual inspections required in Europe were part of the process ensuring that CNG and LPG tanks were replaced on a timely basis. Often car bodies were condemned during inspections for rust while the tanks still had a few years of life left in them. Those tanks could actually be moved, and often were moved, to other vehicles since they were all date-stamped.

  • Kabayo Kabayo on Oct 09, 2012

    If you want to muck anything up, let the government tax it, regulate it, or subsidize it. Getting the government completely out of the energy sector would be the best way to eliminate shortages, and assure that the smartest and most efficient technologies come to the fore, at the lowest cost. Ending the gulf drilling ban is Job One The Keystone Pipeline is next Eliminating ethanol mandates, eliminating solar and wind subsidies, opening up ANWAR, and then an emergency urgent leasing program on federal and offshore areas should be next. Continuing to import oil from countries that have led us to horrible wars, that have added trillions to the national debt, killed and maimed thousands of Americans and unknown numbers of innocent foreigners, as well as provoked numerous attacks including 9/11, and created immeasurable hatred of the USA, is just plain crazy. It doesn't have to be this way.

    • Landcrusher Landcrusher on Oct 09, 2012

      Choking the lease Market with a glut would create other problems. Better to return to a sensible rate of deals per auction.