According to the Natural Gas Vehicle Coalition (em a national organization of local natural gas distributors, pipelines, and equipment manufacturers promoting natural gas vehicles (NGVs) (em the U.S. government supports our country's continued reliance on petroleum-based fuels for transportation through billions in subsidies and tax incentives. A new study by the Domestic Fuels Alliance claims that the amount of total subsidies could reach $300 billion if one considers the Persian Gulf War a "hidden cost for petroleum." The Coalition's point, however, is that the petroleum industry is trying to hinder the development of NGVs to the detriment of U.S. air quality and energy independence.
A different version of this publicity battle over subsidies and unfair trade practices has been playing out before state regulatory commissions for some time now. Natural gas local distribution companies (LDCs) have been seeking ratepayer funding of vehicle refueling facilities and promotional rates for gas supplies. The California Public Utilities Commission (CPUC) has moved from unfettered promotion of low emission vehicles (LEVs), to a more restricted approach under a new law that prohibits use of ratepayer funds for activities not directly related to utility service. The CPUC's shift might reflect the direction regulators will be forced to take where energy prices are under pressure. The move toward a more competitive environment in both the gas and electric industries has reinforced the argument that utility rates can no longer carry the burden of broad social policy objectives.