July 28, 2010 / 12:14 AM / 10 years ago

FACTBOX-Natural gas vehicles and proposed US subsidies

July 27 (Reuters) - U.S. Senate Democrats on Tuesday unveiled an energy bill that includes almost $4 billion in subsidies for natural gas powered vehicles as part of a plan long-championed by oil and gas executive T. Boone Pickens.

Although vehicles driven by compressed natural gas have been promoted as a cleaner-burning alternative to gas engines and a way to reduce the U.S. reliance on imported oil, very few have been sold in the United States.

House lawmakers are expected to vote on their version of the legislation before Congress breaks for recess in August. [ID:nN2797530]

The following are key provisions of the proposed legislation and background on the adoption of natural gas vehicles in the United States:

* The main barriers to natural gas vehicles in the United States have been their additional cost and the lack of a network of fueling stations. There are about 1,300 natural gas stations compared to almost 110,000 traditional gasoline and diesel stations in the United States.

* The proposed Senate legislation would provide a federal rebate of $10,000 for natural gas cars and up to $64,000 for heavy trucks. The rebate would be larger and more direct than the $7,500 tax credit now offered on electric vehicles like the Chevy Volt and the Nissan Motor Co (7201.T) Leaf.

* About 110,000 CNG vehicles have been sold in the United States and almost all of those are buses, delivery trucks and other commercial vehicles. By contrast, Toyota Motor Corp (7203.T) has sold about 900,000 Prius hybrids in the U.S. market over the past decade.

* Honda is the only major automaker to offer a natural gas passenger car to U.S. consumers. The Civic GX is available through 83 dealers in four states — California, New York, Oklahoma and Utah. The Japanese automaker has sold about 3,500 Civic GX sedans in the past two and a half years.

*At a price just over $25,000, the natural gas version of the Honda Civic carries a roughly $7,000 premium over the gasoline version. A Honda effort to promote a home refueling station for its Civic GX unveiled in 2005 failed to make headway and it sold off the technology to a California firm.

* Ford Motor Co (F.N) offers a natural gas version of its Transit Connect van for use by taxi companies. General Motors also began offering a compressed natural gas version of its Chevrolet Silverado pickup truck earlier this decade. A range of firms offer after-market conversions for other vehicles.

* A Massachusetts Institute of Technology study issued this month partly funded by the natural gas lobby estimated that the fuel could provide 40 percent of U.S. energy needs in the coming decades, up from 20 percent now. It said high-mileage fleet vehicles like taxis could be economically converted to run on CNG.

* Despite the limited sales in the United States, the technology is in widespread use overseas. Pakistan, for example, leads the world with over 2.3 million natural gas vehicles on the road, according to the International Association for Natural Gas Vehicles. Taxi fleets in Tokyo and Seoul also run on liquefied natural gas.

Reporting by Bernie Woodall and Kevin Krolicki

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