Friday, August 5, 2011

Arkansas Announces the Compressed Natural Gas Conversion Rebate Program

One result of the increasing prevalence of natural gas “fracking” in Arkansas is increased debate about the environmental consequences of the practice, including whether natural gas should really be considered a “renewable” (and sustainable) fuel resource. This is an important debate, but it should not obscure the fact that natural gas is a part of the clean energy economy and appropriately considered part of a diverse energy portfolio.

This is the premise of the Compressed Natural Gas Conversion Rebate Program, announced today by Governor Beebe. According to a press release on the Program from the Arkansas Economic Development Commission Energy Office,
The CNG Conversion Rebate Program will decrease our dependence on foreign oil and decrease our greenhouse gas emissions by providing an incentive rebate program to accelerate the use of alternative transportation fuel for government vehicles, fleet vehicles, taxis and mass transit.
When he announced the Program, Governor Beebe was singing from the same hymn book, commenting, “One of the hurdles to increasing the use of alternative fuels is building or converting infrastructure to make these fuels economically feasible. This program will encourage the use of less-expensive American fuel and that helps Arkansas’s economy.”

The Program will be administered by the Arkansas Energy Office, which is a division of the Arkansas Economic Development Commission, and will make use of $2.2 million in stimulus funds. Here are the nuts and bolts of the Program:
  • Eligible applicants are Arkansas state government agencies, institutions of higher education, cities, counties, school districts, and private fleets. A fleet is 10 or more vehicles.
  • Eligible fleets must convert or purchase at least four vehicles.
  • Program rebates will be 50% of the conversion cost or the incremental cost of purchasing new compressed natural gas vehicles. The rebates cannot exceed $25,000 per vehicle and will be paid directly to the fleet operators following the purchases or conversions.
  • Conversion kits must be installed according to National Fire Protection Association standards and must be EPA certified.
The rebates are available on a first-come, first serve basis until December 31, 2011, or until the funds are depleted. This is a tight deadline, and those interested in a rebate should not sit on their hands.

The process is also a bit unusual. As opposed to simply applying for a rebate, interested parties must first submit a “reservation request form” to the Arkansas Energy Office. Once the form is received, and assuming it is in order, the Energy Office will reserve the requested funds for 45 days. The interested party must complete the conversion work or the purchase in that 45 day timeframe and then submit an application for the rebate. Funds will be reallocated if no application is received during the 45 day grace period.

In addition to the Compressed Natural Gas Conversion Rebate Program, the Arkansas Energy Office is dedicating $470,000 toward the development of at least two compressed natural gas refueling stations.

This is a step forward for the clean energy economy of Arkansas. The Rebate Program, particularly in tandem with the funds dedicated to the development of natural gas refueling stations, will contribute both to the emerging clean energy culture in Arkansas and to the development of long-needed clean energy infrastructure. The Program should also spur some job growth, even if temporary, since someone is going to need to actually do the conversions and build the refueling stations.

The Arkansas Energy Office will begin accepting Reservation Requests on August 19, 2011.

(Department of Deciphering Pictures: It's a natural gas molecule.)


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