Why Las Vegas is crucial in Obama’s natural-gas crusade

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Leila Navidi

President Barack Obama speaks at a UPS facility in Las Vegas Thursday, Jan. 26, 2012.

Thu, Jan 26, 2012 (3 a.m.)

President lands in Las Vegas

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KSNV coverage of President Barrack Obama landing in Las Vegas on a five day, three state tour to discuses job creation, Jan. 25, 2012.

When he speaks to an assembly of employees at a UPS facility in Las Vegas today, President Barack Obama will be christening the opening of the country’s first multistate, natural gas-powered transit corridor, and laying out the road map for a greater domestic energy strategy.

The president’s energy plan, which he introduced in Tuesday night’s State of the Union address, has three core components: the safe and responsible development of oil and gas, the creation of clean-energy jobs in the U.S., and increasing energy efficiency, with a special focus on the industrial sector.

That begins at the UPS facility in Las Vegas. The company, in cooperation with local governments and the South Coast Air Quality Management District, won a $5.6 million cost-share investment through the stimulus bill to purchase a fleet of trucks that could run on liquefied natural gas (LNG is a cleaner-burning fuel than regular gas or diesel) and construct a publicly accessible LNG refueling station — the first of its kind in the country.

The natural gas-fueled corridor allows UPS to move merchandise through more energy-efficient engines from Long Beach, Calif., to Salt Lake City, according to senior White House advisers.

It’s a model the president wants to replicate in other areas of the country as well, primarily by upping the incentives to get the country’s transport vehicles off gasoline.

Natural gas has become a focus of this administration, as well as lawmakers and energy advocates of all political stripes, not only because it burns about 30 percent cleaner than petroleum products, but also because it’s far more plentiful than oil in the United States. And, it’s cheaper.

The president aims to begin raising consumption of natural gas by encouraging companies to invest in trucks that run on natural gas with a tax credit, equivalent to about 50 percent of the cost difference between trucks that have engines that run on natural gas versus the standard diesel engine. Implementing such tax credits, senior White House advisers admitted, would require an act of Congress.

There’s already one such bill on the books: This fall, Nevada Sen. Harry Reid and a bipartisan group of lawmakers introduced the NatGas Act to extend tax credits for natural gas vehicles and building refueling infrastructure, to be paid for in full by a “temporary user fee on natural gas used as a vehicle fuel.”

“Creating clean-energy jobs and reducing our dependence on foreign oil is an economic and national security imperative,” Reid said at the bill’s introduction. “We cannot afford to continue spending hundreds of billions of dollars a year to buy oil from foreign countries, many of which are unfriendly to the United States. This bill will create over 1 million jobs by accelerating the development of clean alternative vehicles and fuels here at home, and make our nation more secure.”

By the bill’s sponsors’ count, only 117,000 of the 14 million natural gas-powered vehicles in the world exist in the United States; they want to up that to over 700,000 in 10 years, saving the need for over 20 billion gallons of conventional fuel in the process.

The White House also aims to expand the fleet and variety of natural gas vehicles on the roads by providing assistance to local municipalities to purchase public transport vehicles, such as buses, that run on natural gas. The president will also propose funding community challenge programs and research competitions to further extend the demand and efficiency of cleaner fuel-burning vehicles.

Ultimately, the president hopes to replicate the multistate natural gas-fueled system anchored around Las Vegas to up to five other corridors in the United States.

To keep such corridors running, the Obama administration wants to capitalize on the widespread support for natural gas development by opening up new leases on domestic and offshore natural gas fields.

The president will announce a new lease sale for such natural gas deposits on Thursday: It will take place June 20 and encompass 38 million acres of leasable stocks in the central part of the Gulf of Mexico, senior administration officials said. The leases will be structured to encourage quicker development of the parcels to get the natural gas flowing; once done, administration advisers say, 75 percent of discovered, technically recoverable oil and gas deposits will be under lease.

Later in the day, the president will travel to Colorado’s Buckley Air Force Base, where he will announce two more initiatives: the Department of Interior’s plan to open up public lands to private investments in renewable energy generation, and he will announce the U.S. Navy’s 1 gigawatt purchase of renewable energy — the largest such commitment in U.S. history, the equivalent of how much it takes to power 3.25 million homes.

That the president would focus so intently on natural gas in a state like Nevada, which may be implementing the fruits of the product but has little of the resource, is a bit out of the ordinary — in the past, when administration officials have come to Nevada to talk energy, the topic is renewables. Nevada’s sun corridor has made the Silver State a national leader in turning golden rays into an energy resource. Natural gas, though clean, isn’t renewable.

But the unorthodox choice of topic may turn out to be wise in terms of political timing. Just hours before the president touched down in Las Vegas Wednesday night, one of the Las Vegas Valley’s best-known solar panel manufacturers laid off two-thirds of its employees, citing the need to do some “retooling.”

The plant is co-owned by Amonix, which received $5.9 million in stimulus money in 2010.

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