Nat-Gas Vehicles, LNG Projects Get a Little Stimulus Money Lovin' From DOE's Clean Cities Initiative

The case for natural gas just keeps on picking up steam this summer, even if there are lingering concerns of volatility. The latest boost comes in the form of the Department of Energy's Clean Cities Grants project, which will provide $300 million in stimulus funds to speed up the transition to alternative fuel and energy efficient cars and trucks.

BNET recently wrote about the difficulty of selling the public and lawmakers on the benefits of shifting the country's power generation systems away from coal and towards the cleaner alternative of natural gas. Price volatility -- or the fear of it -- has been one of the larger stumbling blocks for folks advocating greater use of natural gas.

But perhaps that hurdle is a bit lower than I previously thought, at least when it comes to a willingness to use natural gas as a transportation fuel.

The Clean Cities Grants project will establish 542 refueling locations around the country and more than 9,000 alternative fuel cars. Natural gas is not the only alternative fuel included in the plan, but it makes up a large percentage of the projects.

Some of the grants include $13.2 million to add 251 hybrid electric and 97 compressed natural gas cars to the city's fleet along with different alternative refueling stations in the Dallas-Fort Worth, Texas area. School district vehicles, taxis and high visibility commercial vehicles used by Coca-Cola, Sysco and Frito Lay are included in the grant. A $5.6 million grant will help complete a regional liquid natural gas fueling corridor across the southwestern U.S. and a $9.4 million grant will be used to replace 180 diesel trucks with ones that operate on LNG in the Los Angeles area.

Folks like Oklahoma oilman and billionaire T. Boone Pickens have waved the natural gas flag for more than a year in hopes of convincing lawmakers and consumers that its the perfect "bridge fuel" to wean the U.S. off of foreign oil.

Not too long ago, corn-based ethanol -- and later biodiesel and second-generation cellulosic biofuels -- was the sweetheart of alternative fuels. But this summer more folks are talking up natural gas than ever before.

This summer, the New Alternative Transportation to Give Americans Solutions or NAT GAS Act was introduced in the Senate this July, much to Pickens delight. The House introduced a similar piece of legislation this spring. And natural gas -- along with energy efficiency -- was the go-to topic in the National Clean Energy Summit 2.0 in Las Vegas this summer.

Perhaps it's because natural gas futures are trading at seven-year lows. Or maybe it is the country's ever-growing supply, thanks to technological breakthroughs that have unlocked shale gas reserves in recent years.

This recent embrace of natural gas is bound to produce a few losers as well. Corn-based ethanol hasn't received much love this year, although the government continues to back the industry. Biodiesel -- along with first and second-gen biofuels -- may be the biggest loser in all of this, as the WSJ's Environmental Capital notes.

Of course, climate change legislation is still floating out there. And if farm-state politicians get their way, the tide may turn back in the biofuel industry's favor.