The latest U.S. estimates are that there are 30 trillion cubic feet of natural gas in Ohio's shale and the state wants that as truck and bus fuel to create enough demand to encourage compressed gas powered car production.
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Natural gas fueling station.
COLUMBUS - The early outlines of a comprehensive state and private strategy to switch trucking, mass transit, municipal and other fleets to natural gas vehicles emerged here Tuesday at a daylong summit.
One idea being considered that emerged at the end of the day is to "partner" with fleet owners, creating a revolving loan fund to help them with the purchase of vehicles that burn compressed natural gas or with the construction of refueling stations also open to the public.
Another idea, still in its infancy, would be add a "rider" or fee to the gas bills of consumers, business and industry, creating a loan fund, though it has not been determined who would manage that fund.
Jimmy Stewart, a former state senator from Zanesville, now president of the Ohio Gas Association, a trade group for the state's utilities, brought up the rider idea and said the utilities were actively discussing it.
Later, in an interview, he stressed it was only in the talking stage and that no amount had been discussed, and that no lawmakers had been asked to sponsor any legislation.
Chad Smith deputy chief of state's Development Services Agency, formerly the Ohio Department of Development, said the agency has been focusing on the "supply chain," Ohio companies that are or will supply parts not only to natural gas drillers, but to the the makers of conversion technology.
"Ohio (manufacturers) could provide most of everything we need," he said.
Smith also mentioned a revolving loan fund but did not say how it might be initially funded.
Jim Butler, a Republican state representative from the Dayton area, said he liked the loan fund idea as a way to help local governments switch to CNG vehicles.
He said local governments could pay the state what they have saved in fuel costs. Later, in an interview, he said he rejected the idea of adding a charge to gas bills.
Sam Spofforth, executive director of Clean Fuels Ohio, a non-profit dedicated to moving fleets from petroleum fuels to alternatives, including natural gas and electricity, also spoke in favor of a loan fund.
Todd Snitchler, chairman of the Public Utilities Commission of Ohio and the man Kasich asked a year ago to find a way to move Ohio trucking and other fleets away from diesel to Ohio natural gas, set the broad policy tone.
"Our primary concentration at the moment is to convince companies and municipalities to convert their fleets to compressed natural gas or liquefied natural gas, ," Snitchler said in a lunch keynote speech.
"Fleet vehicles are perfect candidates for CNG or LNG conversion as refueling can be done overnight at a central location.
"We hope to encourage private CNG/LNG filling stations used by governments and companies to allow access to the public so that widespread use of natural gas vehicle can begin to take hold. Thus, when demand for CNG and LNG fuel increases we can show suppliers and marketers the market value to increase supply by building more public filling stations."
Kasich himself unexpectedly showed up, with OSU President Gordon Gee along to introduce him, said he was not interested in any state involvement unless it created jobs.
"We are on the cusp of this, but we have a ways to go," Kasich said. "We have to bring about the market. The states will jumpstart this with our fleets. We will begin to see some conversion," he said. "But the business leaders will have to show this is something they care about.
Regional freight hauler J Rayl Transport, headquartered in Akron used the conference to announce it is replacing or converting its 200 diesel trucks to compressed natural gas by the end of next year.
"We are looking to buy 75 vehicles. The problem is getting a commitment to when they will be delivered, " Jeremy Rayl, ceo of the family-owned company, told the more than 200 attending the natural gas vehicle summit sponsored by America's Natural Gas Alliance.
The company is negotiating with a number of local trucking dealers, including Young Trucking of Canton, a Freightliner and Volvo truck dealer who sold several CNG trucks to Smith Dairy of Orrville last summer. Smith is also committed to a full switch from diesel to CNG
Rayl said each new truck will cost about $200,000 and the fueling station the company will have built on its own property another $1.7 million.
But with the cost of diesel at $4 per gallon -- more than twice what Rayl will be paying for natural gas - the company , expects the investment to pay for itself in about two years.
In an interview Rayl said his company would immediately replace all of its trucks if they were available.
He said the company has a letter of commitment from First Merit , its long-time banker.
With the shortage of new trucks, J Rayl Transport is planning to contract with a South Carolina company that will retrofit the older trucks to burn a combination of natural gas and diesel.