market develops.

H.R. 1497 has already been introduced and nas

provisions to address this problem. We are hopeful that a similar proposal will be introduced in the Senate shortly.

Environmental Assessment on Conventional Fuels

The natural gas industry believes that the nation would be best served by the imposition of a higher tax on gasoline and diesel fuel. Such a tax would recognize the related environmental and security costs associated with motor fuels. Clean, domestic alternative fuels should be exempt from such a tax. The revenue from such an increase could finance many transportation projects including converting government fleets, providing tax credits for refueling stations and the R&D funding requested, all of which will directly create American jobs and save money in the long run.

Maintain CAFE Benefits for Alternative Fuel Vehicles

To date, one of the strongest incentives for the big three auto makers to develop and sell natural gas vehicles has been the Corporate Average Fuel Economy (CAFE) benefits assigned to alternative fueled vehicles by the Alternative Motor Fuels Act of 1988. For example, for purposes of calculating an automaker's CAFE rating, NGVs are permitted to equate to a vehicle with a fuel economy of more than 120 miles per equivalent gallon. Any changes to the CAFE requirements need to maintain and enhance the benefits to alternative fuel vehicles.

Federal Jurisdiction Over Selling Motor Fuel

Congress could facilitate the increased utilization of natural gas as a motor fuel by either establishing or clarifying the absence of FERC jurisdiction over local distribution companies (LDCs) and others who sell natural gas for vehicular use as wholesalers or retailers. Section 10008 of S. 341 clarifies the nonfederal jurisdiction status of local distribution companies as wholesalers or retailers of vehicular natural gas (VNG). Brooklyn Union supports Section 10008 and urges its early enactment.

Continuation and Expansion of UMTA Initiative

Another federal program that has greatly helped the development of NGVs, specifically in the bus market, is the alternative fuels initiatives sponsored by the Urban Mass Transit Administration (UMTA). The American Public Transit Association reported at the end of last year that there are almost 150 natural gas buses soon to go into operation in North America, many due to the UMTA Alternative Fuels Initiative (AFI). In fact, approximately 65 percent of the alternative fuel buses on order through the AFI are to be powered by natural gas. This is more

than for all other alternative fuels combined. But this is still a small fraction of the several thousand transit buses on the road. Continuation and expansion of this program will have clear short term benefits as well as long term environmental benefits. The more clean fuel buses put in operation today, the less pollution down the road, since once a diesel is purchased, it is not soon

replaced.

2. Will the development of original-equipment natural gas

vehicles by major manufacturers aid the economics of selling natural gas to vehicle fleets?

Yes, the development of OEM natural gas vehicles will aid the economics of selling natural gas to vehicle fleets. It currently costs approximately $2,000 to $3,000 to convert an existing vehicle to natural gas. However, the USDOE estimates that a mass produced OEM natural gas vehicle will only cost $800 more than a conventional vehicle, and this is before the additional costs of emissions reductions to meet the Clean Air Act are added to the gasoline vehicle. In addition, natural gas is already a less expensive fuel. Production of NGVS by original equipment manufacturers (OEM) will reduce the maintenance costs by covering NGVS in the original vehicle warranty and by making available the large service and maintenance capabilities of the OEMs. And, that is exactly what is beginning to happen. Recently, General Motors announced a $40 million program in cooperation with the Gas Research Institute to begin engineering and product development of light and medium duty trucks powered by natural gas.

3. Can your company and others now involved in converting

vehicle fleet fueling to natural gas handle an acceleration of the schedule of such conversions over that laid out in the Clean Air Act Amendments of 1990?

Yes, most of the companies involved in the conversion of natural gas vehicles can handle an acceleration of the schedule laid out in the Clean Air Act. In fact, some plans are already underway due to the implementation of major state initiatives, including those in California and New York. However, it is important that as the market expands, that the public's safety and monetary resources be protected, by the establishment of appropriate national standards governing the conversion of vehicles to alternative fuels as well as the licensing of repair shops.

What, in your opinion, are the largest barriers to greater use of natural gas by commercial vehicles?

The two largest technical barriers to the greater use of NGVs are (1) the lack of natural gas refueling infrastructure and (2) the limited range of conversion NGVs. For example, a typical service van can carry more than 18 gallons of gasoline. A good conversion of an existing vehicle to dedicated natural gas can only hold an equivalent of up to 15 gallons of gasoline.

Although the

difference does not sound great, it can be a major headache to a fleet operator. As discussed in previous questions, the solutions

can be expedited by (1) offering economic incentives for LDCs, OEMs

and vehicle operators and by (2) accelerating R&D programs.

Another obstacle is the need eliminate the obvious bias toward liquid fuels. Myths about the safety, convenience and performance of natural gas as well as the supposed interchangeability of alcohol and gasoline all should be addressed through a program of public education.

5. What, in your opinion, will be necessary steps toward making the use of natural gas vehicles by individuals a viable alternative to today's gasoline and diesel powered vehicles?

There are two basic steps to replacing gasoline and diesel fuel with natural gas. These are first and foremost, development of a refueling infrastructure and consequently the use of natural gas vehicles in large vehicle fleets. Second is the mass

production and full support of natural gas vehicles by original equipment manufacturers.