Momentum building for CNG station in Glenwood
September 8, 2012
GLENWOOD SPRINGS – Members of the Glenwood Springs City Council Thursday night expressed strong support for a proposed public/private partnership to build a compressed natural gas filling station in the city.
Although the body stopped short of offering concrete financial incentives for the station’s construction, they made it clear that they will likely do so before an official request for proposals is released to potential station builders and gas suppliers.
“I support this, but I’d like to see some [more concrete] schemes before I commit taxpayer money,” said Glenwood Springs Mayor Matt Steckler.
Representatives from Garfield Clean Energy (GCE), the intergovernmental agency that has been coordinating a push for a natural gas station in Glenwood Springs, presented the council with a plan in which $90,000 in county funds and $10,000 in city funds would be combined with $200,000 from a private energy company to create an incentive for station construction.
The total, $300,000, is the amount that GCE staff believes is necessary to convince a private operator to build a station in the city.
The need for an incentive stems from the so-called “chicken and egg” problem that has long plagued CNG technology: Potential station operators are hesitant to build until more drivers purchase CNG vehicles, but drivers are unlikely to buy natural gas cars until they have a place to fill them.
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An unnamed gas drilling company and a group that handles station construction and financing have already expressed interest in a Glenwood Springs station, according to GCE’s Head of Special Projects, Tom Baker. His group is awaiting an official letter of intent from the energy company to confirm its commitment, he said.
However, a potential owner/operator of the station has yet to materialize.
“It’s a tough nut to put $900,000 of your own money into a station right now,” said Kirk Swallow, who has operated a CNG fueling station in Rifle since April 2011. His station, which he said cost about $900,000 to build, was funded in part by a $675,000 grant from the Governor’s Energy Office. Swallow covered the difference.
CNG vehicles, he said, have been “slow in coming,” despite a state tax credit that offers buyers a 75 percent rebate on the cost difference between a conventional vehicle and a CNG model. Swallow sold about 5,200 gallons of fuel last month. At that rate, it will take him 8 to 10 years to recoup his initial investment.
Another CNG station is currently operating in Grand Junction, and the energy company Encana is planning to build a station in Parachute, according to Baker.
A station in Glenwood Springs, he noted, would expand fueling options for CNG vehicle owners living in the 1-70 corridor.
Although council members Thursday night appeared unanimous in their support for a CNG station, they differed on the need for additional incentives to encourage consumers to buy natural gas-powered vehicles.
As a way to educate consumers and stimulate demand, Councilman Steve Bershenyi suggested that the city could purchase a CNG vehicle and raffle it off to the public.
But councilman Ted Edmonds insisted that the largest obstacles to widespread adoption of CNG technology remain on the supply side. “I hear many people say, ‘I would buy a vehicle if I could just get CNG,'” he said.
Baker said the city could easily focus on constructing a station first, and turn their attention to stimulating demand at a later date.
“If there’s a need for demand-side incentives down the road, then we could go that route,” he said.