Original Article

The fight over the Senate offshore drilling “spill bill” shifted Wednesday from the Gulf of Mexico to the mountains of western Pennsylvania, as Republicans slammed the last-minute inclusion of language to regulate a controversial technique to extract onshore natural gas.

Senate Majority Leader Harry Reid (D-Nev.) added the language Tuesday requiring natural gas drillers to disclose the chemicals they pump into the ground as part of the hydraulic fracturing, or hydrofracking, process.

Republicans are wary of the addition, which comes on Page 404 of the 409-page spill response bill that Reid wants the Senate to take up before the recess. The language is not in the bill the House will vote on by Friday.

GOP objections to any portion of the larger bill could stall Senate progress, since senior Democratic staff indicated that Reid will not allow amendments.

Sen. Jim Inhofe of Oklahoma said the new requirements could effectively end onshore natural gas production. He noted that some states already have hydrofracking safety and disclosure regulations but that making the requirements national would freeze the industry.

“This has been done at the state level successfully,” said Inhofe, the top Republican on the Senate Environment and Public Works Committee. “There’s not a problem with hydraulic fracturing, and there are a lot of people who want to kill the system because they don’t like fossil fuels,” Inhofe said. He noted, however, that he had not closely read the language in the bill.

Reid dismissed the GOP criticism, saying the new language simply requires companies to disclose the mix of their chemical blends, not to stop extracting gas.

“I’m disappointed that the Republicans are still looking for an excuse to say no,” said Reid. “Right now, we have more natural gas than any country in the world. Is there anything wrong with taking a look at how that’s extracted? I guess if you’re looking for an excuse to say no, there is.”

Several observers suggested that Reid’s last-minute inclusion of the hydrofracking language was intended as a consolation prize to soothe the ruffled feathers — and win the grudging support — of environmentalists still smarting from Reid’s decision last week to abandon a comprehensive climate change and renewable energy bill.

The language was not in a draft outline circulated early Tuesday afternoon but was added to a final version of the bill sent out at 10 p.m. Tuesday.

“We’d been talking to Sen. Reid about this for a long time. This is Sen. Reid doing something we’ve been asking for,” said Daniel Weiss, a climate policy expert at the Center for American Progress, which was active in lobbying on the climate bill and signed a letter Tuesday from 10 environmental groups, asking Reid to include the language.

The hydrofracking disclosure provision comes from a bill Sens. Chuck Schumer (D-N.Y.) and Bob Casey (D-Pa.) circulated this year. Democrats in both chambers have sought for months to find a vehicle for new regulations on hydrofracking, which has come under intense scrutiny over the past year as lawmakers celebrated vast new discoveries of domestic natural gas.

The abundant supply of the clean-burning fuel has promised to change the nation’s energy landscape — but it comes with potential peril. Extracting the gas, which is mostly in unconventional shale formations, involves fracturing the ground surface above the deposit and injecting a cocktail of sand and liquid chemicals.

But now there is fear that the process could pollute local water supplies. That phenomenon came under the spotlight earlier this summer with the documentary film “Gaslands,” in which people living near hydrofracking projects showed their tap water running dark and murky and sometimes even igniting on fire.

Fracking is exempt from many of the federal regulations that govern other forms of energy extraction under the 1974 Safe Drinking Water Act, including a requirement that companies disclose what chemicals they inject into the ground. (That’s thanks to a provision inserted in a 2005 energy law by then-Vice President Dick Cheney, known as the “Halliburton loophole” — Halliburton is one of the nation’s leading providers of hydrofracking services.)

Industry reaction has been mixed. There has been growing support among some gas producers and fracking companies for new disclosure regulations, and the bill would not require the Environmental Protection Agency to permit hydrofracking.

But Jason Hutt, an analyst for Bracewell and Giuliani, which lobbies for several major energy interests, including the Gas Processors Association, said there will be pushback on the provision. Some gas producers said that being forced to reveal the chemical combinations in energy extraction is akin to companies like Coca-Cola being forced to reveal their recipes. “A lot of folks in the industry have a problem with protecting their intellectual property on this,” he said.

Original Article

Energy industry executives knew the Obama administration would play havoc with their ability to supply oil and natural gas. And this was before the Gulf oil disaster that led to the petty pace of offshore drilling moratorium edicts.

Oklahoma City’s Chesapeake Energy and Devon Energy have been summoned by a congressional committee examining hydraulic fracturing. They’re in good company: Others on the summons list include ExxonMobil and ConocoPhillips.

Hydraulic fracturing’s effect on water supplies has been examined for years and likely will be until the last syllable of this administration’s executive orders is written. Tomorrow and tomorrow can’t come soon enough for energy executives.

No adverse impact from fracturing has been proven. Shaking up rock through fracturing is essential for releasing natural gas from shale formations; natural gas is essential for transitioning power generation away from coal. Gas is also key (along with offshore oil drilling) in reducing dependence on foreign supplies.

Nevertheless, some poor players in Congress won’t let the fracturing issue die a dusty death. California U.S. Rep. Henry Waxman seems obsessed by it. Yet natural gas is a relatively green, clean and abundant fuel.

We hope Waxman isn’t on a witch hunt. Yet we’re not encouraged by his antics when insurance firms made accounting adjustments following passage of Obamacare. Then, Waxman waxed indignant and demanded answers. It was all sound and fury, signifying nothing.

Perhaps the fracturing probe will also be a brief candle. Waxman’s strutting and fretting, though, appears to be a drama with no final act.

Original Article

ARCADIA — Chances are if you drive the interstate at any point you’ll see an escort vehicle with two or three 18-wheelers loaded with massive green-colored pipes that stick out beyond the rear axle.

Those loads eventually will make up the 105,000 tons of steel to be lowered into trenches along a 175-mile stretch across most of north Louisiana. Once it’s all in the ground, the 42-inch diameter pipe will carry 2.4 billion cubic feet per day of natural gas, most of which is coming from the Haynesville Shale region of northwest Louisiana.

“We will be serving the whole eastern half of the U.S. with Haynesville Shale gas,” Energy Transfer Partners Interstate Pipeline Division Vice President Lee Hanse told a crowd of local, parish and state officials who gathered Thursday in the Willow Bay Ballroom for a luncheon to celebrate the start of the ETC Tiger Pipeline project.

Another reason for the event: To allow state senators and representatives to add their appreciation to the company for its $1 billion investment in the state and to pass along Gov. Bobby Jindal’s proclamation recognizing Thursday as ETC Tiger Pipeline Day in Louisiana.

The pipeline is following the footprint of a 42-inch CenterPoint pipeline that was installed prior to the Haynesville Shale to transport gas from the Barnett Shale in Texas to other parts of the country. The route originates in Panola County, Texas, and makes crossings through Caddo, DeSoto, Red River, Bienville, Jackson, Ouachita, Richland and Franklin parishes and ends at the Perryville Hub.

Construction began in June, which was no secret to communities in the area because of the influx of workers who the month before started looking for pads in already crowded RV parks in which to place their travel trailers during the work period that will last until March. Approximately 2,828 temporary jobs have been created, including 2,578 working on the pipeline itself.

Arcadia Mayor Eugene Smith said he routinely promotes his town as being on the grow, but acknowledges with the pipeline going through Bienville Parish “it’s helping us grow even more.”

Bob Harper, state Department of Natural Resources secretary, was scheduled to be the keynote speaker for the luncheon. But with a tropical storm looming in the Gulf, Harper had only a few minutes to note the significance of the project to the state’s economy.

The Haynesville Shale, Harper said, has proven to be an “economic mainstay” in the state, with two-thirds of all natural gas drilling in the state taking place in northwest Louisiana.

Greg Brazaitis, vice president of Energy Transfer Partners government and state affairs, echoed Harper somewhat, saying the shale is a “golden opportunity” but it’s an opportunity that won’t happen until all of the dots are connected and that includes getting the gas from the shale and into homes.

And it also positions the state to bring the nation’s attention to the need for energy independence, Hanse said.

“Louisiana is doing its part to be energy independent,” state Rep. Henry Burns said, adding that more incentives are needed to promote natural gas powered vehicle. “The rest of the country needs to recognize what we are doing.”

The natural gas that will be transported in the pipeline is already sold to customers. A second phase of the project is adding the additional 400,000 million cubic feet of gas a day to the pipeline that was originally designed at 2 billion cubic feet a day. The expansion will be accomplished by adding 20 miles of pipeline looping and additional horsepower to the compressor stations.

“All of America will share in the benefits of this pipeline,” Hanse said.

By Ben Geman

Original Article

House Energy and Commerce Committee Democrats are expanding their probe of a controversial natural-gas drilling method and alleging that drilling services companies do not track whether wells are located in underground drinking water supplies.

Chairman Henry Waxman (D-Calif.) and Rep. Edward Markey (D-Mass.) sent letters Monday to some of the nation’s biggest energy producers — such as Exxon Mobil Corp. — asking about their use of “hydraulic fracturing.”

The letters to the 10 oil-and-gas producers say that service companies the producers employ did not have vital information the committee requested.

The letters are the latest step in the Democratic duo’s months-long probe of hydraulic fracturing, or “fracking,” which involves high-pressure injections of chemicals, water and sand to break apart rock formations and enable trapped gas to flow.

The technique has helped enable a boom in development of gas from shale rock formations in a number of states. The viability of shale gas has helped boost U.S. proven gas reserves to their highest level in more than 30 years, according to the federal Energy Information Administration.

But the boom is also creating fears — which the industry calls overblown — about contamination of water supplies.

Waxman and Markey months ago sent letters to drilling services companies asking about their practices, and on Monday the lawmakers said the responses revealed information gaps.

“The Committee asked that each recipient of our February 18 and May 6 letters provide data on whether it has performed hydraulic fracturing in or near underground sources of drinking water as defined by the Safe Drinking Water Act. The hydraulic fracturing service companies informed us that they do not track whether the wells they fracture are located in underground sources of drinking water. They said that the operators of the oil and gas wells would be more likely to maintain the requested information,” Waxman and Markey said in a memo to other committee members.

The memo adds that they had also asked the service companies about recovery and disposal of water and other fluids that flow back to the surface of the wells.

“The recipients informed us that the well operators, not the service companies, are responsible for any flowback or water produced from the wells and therefore do not maintain information on the volumes or chemical contents of this waste,” the memo states.

The probe comes as several Democrats are floating measures that would tighten regulation of fracking. Bills introduced in both chambers would require EPA regulation of the practice under the Safe Drinking Water Act and disclosure of chemicals used.

But the industry says state regulations provide adequate oversight, and that a suite of new federal requirements would make many operations uneconomical.

EPA has launched a major study of the water quality and health effects of the practice.

Update: Energy in Depth, an industry-backed group fighting new regulation of fracking, had this to say about the new Waxman letters:

“The basic geological reality of shale gas exploration is the formations we fracture are separated from the formations carrying potable underground water by thousands and thousands of feet — and millions and millions of tons — of solid, impermeable rock. If the chairman is looking for some additional information on that scientific phenomenon, or on the steps that operators take at every wellsite in America to ensure what happens inside the wellbore has no way of communicating with what occurs outside it, that’s a conversation we look forward to being part of,” spokesman Chris Tucker said.

Original Article

By Jeff Moore

The oil has stopped, but the bleeding continues for local oil and gas service companies affected by a moratorium on deepwater drilling.

As BP cautiously celebrates the stanching of the worst oil spill in U.S. history, work has slowed to a crawl for much of Acadiana’s oil and gas industry.

Dozens of drilling projects have been suspended, forcing local service companies to make difficult decisions about their operations and employees.

The moratorium hasn’t led to significant job losses yet — local unemployment claims have actually decreased in recent weeks, according to the Louisiana Workforce Commission. But they’re coming, industry leaders warn. And nowhere might the effect be greater in Acadiana than along U.S. 90.

A Connector

U.S. 90 forms a key link in the nation’s energy supply chain, connecting oil and gas production in the Gulf of Mexico to the mainland through a network of ports, supply bases and other infrastructure.

It provides access to four of the nation’s 10 largest ports, including Port Fourchon, which services 90 percent of all deepwater rigs and platforms in the Gulf of Mexico.

In a 20-mile stretch of U.S. 90 from Lafayette to New Iberia, there are dozens of energy service

companies, ranging from locally owned small businesses to huge, publicly-traded Fortune 500 companies.

Three of the world’s largest oilfield service providers — Baker Hughes, Halliburton, Smith International — have major complexes along the corridor. Diamond Offshore, which operates dozens of deepwater drilling rigs around the world, has facilities in New Iberia, and Weatherford International has manufacturing and operations hubs in Broussard.

There are homegrown companies, too. PHI has built itself into one of the largest helicopter companies in the world servicing the offshore oil and gas industry in the Gulf of Mexico. C&C Technologies has grown into the world’s largest privately owned survey company, capable of mapping seafloors in oil-producing areas across the world.

Frank’s Casing Crew & Rental Tools, founded in 1938 out of Frank Mosing’s garage, has grown into a multi-service company with branches in six continents.

Engine Of Growth

In an era when other industrial areas have struggled, business has flourished along U.S. 90.

Two metropolitan areas along the corridor, Lafayette and Houma-Thibodaux, have consistently enjoyed the lowest unemployment rates in the state. Along the corridor, billboards announcing openings for boat captains, deckhands and divers outnumber advertisements for car dealers and restaurants.

But those jobs are in jeopardy now, industry officials say, because of a federal moratorium on drilling.

A study by the Lafayette Economic Development Authority predicts more than 3,750 oilfield jobs will be lost from the moratorium, with an even greater total of indirect job losses.

“There will not be a business that’s not affected, from Baker Hughes to Shannon Hardware,” said Brady Como, executive vice president of Delmar Systems in New Iberia.

“Lafayette’s economy — it’s all tied to the oil and gas industry.”

Jobs At Risk

Outside Delmar Systems, a sign asks, “Mr. Obama, why are you eliminating our jobs?”

Como predicts the moratorium will do just that to his company, which employs about 170 people.

Delmar Systems provides mooring and anchoring services to semi-submersible drilling rigs in the Gulf of Mexico. Thirteen of the 33 rigs impacted by the moratorium were anchored or moored by Delmar Systems. Nine of those rigs are now idle.

“They’re at the beach, pending what’s going to happen with the moratorium,” Como said.

When the four other rigs are idled, sometime in the next 60 days, Como predicts his company will be “severely impacted.” While the company has some international projects, 90 percent of its work is in the Gulf of Mexico.

“If those rigs leave the Gulf, we can either chase those rigs or other folks will get that work,” he said. “It’s a major concern.”

Aries Marine of Lafayette operates 28 vessels in the Gulf of Mexico. The company currently employs 240 people, but has supported as many as 300 in the past. A slowdown in drilling led to a round of layoffs last year. But in March, Aries Marine started hiring many of those workers back as the drilling industry appeared to be gaining strength.

That momentum came to a screeching halt with the drilling moratorium, said Aries Marine President Court Ramsay.

Currently, eight boats are out of work and tied up at dock. Several of the active boats are working in response to the oil spill. Once that work finishes, those boats will be off contract.

“It’s going to be dire,” Ramsay said.

“If there’s a significant reduction in activity in the Gulf of Mexico, the demand for our equipment will go down accordingly. If there’s no demand for the equipment, there won’t be any demand for labor to operate the equipment and jobs will be at risk. It will require Aries Marine to downsize.”

It’s bad timing for Aries Marine, which has been in business for 30 years.

Three years ago, the company decided to build two large vessels to serve the then-booming ultra deepwater market.

The 292-foot boats are coming out of the shipyard this year, but their future remains largely uncertain.

“Less than four months ago, these boats were in very high demand,” Ramsay said. “As it is now with the moratorium, those boats are not needed in the Gulf of Mexico.”

Rigs Moving

Advanced Logistics in Lafayette has 15 employees, but the company provides fleet management software to hundreds of vessels in the Gulf of Mexico.

Company president Jeffery Svendson said his company has lost some business from the moratorium, but many of the vessels it serves have gotten jobs skimming oil, a job Svendson figures will last for months.

Once cleanup efforts moves to beaches and marshes, those boats will be offline, Svendson said. And Svendson’s company will have to look elsewhere for work.

“You can’t have your equipment or people idle,” Svendson said. “When you shut down an industry like the drilling industry, it doesn’t take long for companies to go out of business. The cash just dries up.”

It’s the same dilemma confronting drilling contractors in the Gulf of Mexico, which are beginning to move their rigs and people overseas, even though they will receive lower rates at those jobs.

Since the moratorium was announced, Diamond Offshore said it would move two of its rigs out of the Gulf — one to Egypt and one to the Republic of Congo — and was considering moving a third.

“Drilling contractors are not going to stay in the Gulf of Mexico waiting for something to happen,” Svendson said. “If they don’t have confidence, they will seek work for their equipment in other parts of the world.”

Redirecting Resources

No jobs are at risk at Knight Oil Tools, said vice president of sales and marketing Doug Keller. But some employees in critically-affected areas could be transferred to aid the company’s expansion in other parts of the country, he said.

The world’s largest rental and fishing tool company, Knight Oil Tools has offices in seven other states. The company is in the process of opening a facility in Shreveport to support activities in the Haynesville Shale.

“Personnel has been a major issue in all those places prior to this incident,” Keller said. “We will re-direct internal resources toward those areas to help us expand a little bit faster.”

Svendson said he is trying to “think outside the box” and adapt his company’s applications to provide additional value to the production side of the business.

But there’s no simple solution when shipping companies can’t operate in the Gulf of Mexico, he said.

“It’s not as simple as sailing the boat to another region and saying I’m open for work. Putting together the infrastructure to support just one vessel is a big process,” Ramsay said.

“And there’s a steep learning curve involved with working in foreign areas. It’s not an easy endeavor to take on.”

Making A Statement

Industry leaders were hopeful a court victory might put an end to the moratorium, but those hopes were dashed days later when a second one was imposed.

Now, their hopes hinge on the recommendations of a presidential commission investigating the spill. Business leaders and elected officials testified before the commission in New Orleans last week about how the moratorium is hurting the state.

Companies hope to make another statement at the Rally for Economic Survival on Wednesday in Lafayette.

Keller said Knight Oil Tools has sent out mass e-mails encouraging employees to participate in the event, hoping to bring national attention to the local area’s plight.

“We feel like something has to be done to get the powers that be to understand,” Keller said.

Original Article

Experts are so focused on analyzing the BP spill that they’re overlooking the next big thing.

By John Deutch

Even energy experts tend to forget the enormous impact unanticipated events can have on markets and public policy. Today there are two developments that have the potential to cause dramatic change: the existence of enormous reserves of natural gas and the BP spill.

As recently as two years ago, we had no idea that there were vast natural gas resources in unconventional reservoirs like coal seams, tight sand and shales in the United States and elsewhere. That’s the positive surprise. On the negative side, the severity of the oil spill in the Gulf of Mexico could well turn the global public against oil and natural gas exploration.

If the past is any guide, accidents in the energy sector profoundly affect this country’s energy outlook. Reactor incidents at the nuclear power stations at Three Mile Island in Harrisburg, Pa., in 1979 and in Chernobyl, Ukraine, in 1986 interrupted nuclear power plant construction in the U.S. and Europe for two decades. The 1973 oil embargo by OPEC and the 1978-79 oil crisis caused by the fall of the Shah in Iran permanently changed expectations about the security of the oil supply and the long-term price trend.

The BP spill will certainly lead to a major review of the risks involved in offshore drilling. Re-examining operating practices and regulations will likely take more than a year, during which time new deepwater operations will be curtailed. The danger is that public attitudes and government policy will lead to an extended period of reduced investment and licensing.

Some observers will characterize the blowout as an exceptional case due to chance or negligence. Others will see it as evidence of general inattention. Few will recall the facilities in the Gulf survived Hurricane Katrina in 2006, an unusually stressing event, without appreciable problems.

Yet even as we endlessly debate U.S. energy and climate policy in the wake of the BP gusher, we aren’t spending enough time considering what’s on the horizon—particularly natural gas’s transition from a dwindling to an abundant resource. According to the Energy Information Agency (EIA), natural gas could become a much more important fuel for the U.S. in the coming decades.

In its 2010 International Energy Outlook, the EIA predicts growth in natural gas production principally from shale in Latin America, China, Australia, North Africa and the former Soviet Union. Global unconventional gas production is projected to increase to 7.9 trillion cubic feet in 2035 (1/3 of total natural gas production) from its 2008 level of 3.5 trillion cubic feet (about 1/6 of total production). The 2010 EIA projection of world-wide production of unconventional gas increases at 5.2% per year between 2008 and 2035, compared to 1.4% for total gas production.

What will this mean? In the short run, natural gas will displace coal in the electricity sector. This will significantly lower carbon emissions. In terms of renewable energy, low-cost natural gas will make hybrid solar plants that use both sunlight and natural gas to make electricity more economically attractive.

As oil gets more expensive and natural gas cheaper, there will also be an enormous incentive to use far more natural gas in the transportation sector. Compressed natural gas can power buses, medium-duty trucks and light-duty vehicles that operate in urban environments close to fueling stations.

But the U.S. is far behind the rest of the world in using this source of energy for transportation. As of 2009, Pakistan led the world with 2.4 million vehicles fueled by compressed natural gas and over 3,000 fueling stations. By comparison, the U.S. had about 100,000 such vehicles and 1,300 stations, consuming 0.1% of the 12 million barrels of oil per day devoted to transportation.

The penetration of natural gas into the U.S. market will be determined by the cost of kits to convert gasoline-fueled vehicles to natural gas. That cost should decline sharply with scale, new vehicle offerings, the availability of fueling stations, and, of course, continuation of the favorable cost of natural gas compared to motor gasoline.

Even 10% penetration in the next decade or two would displace 1.2 million barrels of oil per day. This may not be decisive, but it certainly could have as big of an impact as other proposals to reduce import dependence, like gasohol (a mixture of motor gasoline and ethanol from corn).

Natural gas can also be transformed into liquid fuels, such as methanol, for transportation or industrial use at a production cost that I estimate to be approximately $45-$60 per barrel of product. This is expensive, but lower than the likely price of crude oil and the anticipated cost of synthetic liquids from coal or shale (plus it has less carbon emissions).

The continued expansion of gas pipelines around the world, as well as the expanding trade of liquefied natural gas, indicate a movement toward a global market for natural gas similar to oil, and ultimately with a single world price. A global price implies major changes in patterns of gas trade between the North American market, where gas is priced to coal, and the Asian market, where gas is priced to oil. Because coal is cheaper than oil on an energy efficient basis, this means that current natural gas prices in North America are $4 per thousand cubic feet compared to $10 per thousand cubic feet in Asia.

That’s where things seem to be heading now, but our thinking should remain agile. There undoubtedly will be other energy surprises that will disrupt conventional thinking.

Political instability or military conflict in the Persian Gulf could create a lengthy supply disruption, while a resolution with Iran could lead to welcome additions to world supply. An extended global economic downturn would reduce demand but also reduce energy investment critical for the future. Unexpected advances in photovoltaics, batteries or biofuels likely will change the affordability of new technologies.

The U.S. should have a comprehensive, long-term energy strategy. But when unforeseen events arise, we should adjust as necessary to take advantage of unexpected opportunity.

Mr. Deutch is a professor at MIT and former under secretary of the Department of Energy. He currently serves on the board of directors of Cheniere Energy and was formerly on the boards of Schlumberger, CMS Energy and Citigroup.

Original Article

By Benson Kong

After announcing its intent to offer compressed natural gas and liquefied petroleum gas-compatible Chevrolet Express and GMC Savana vans in May, we have learned General Motors is ready to begin offering the CNG versions this fall.

The CNG-ready Vortec 6.0-liter V-8 engines will be assembled at GM’s Wentzville, Missouri, plant, and the Express and Savana full-size vans will be fully compliant with emissions regulations. To help with the necessary conversions, GM tapped Productive Concepts to assist with the fuel delivery, storage system, and emissions testing. Vans in tow, GM will be looking for sales this fall, and the LPG versions are due early next year. Each van will come with a three-year, 36,000-mile new vehicle limited warranty and a five-year, 100,000-mile limited powertrain warranty.

“Our focus from the beginning has been to offer fleet customers a simple ‘check the box’ approach with our CNG Chevrolet Express and Savana vans,” said Brian Small, general manager for GM’s fleet and commercial operations. “Our robust production process is a key enabler and certainly separates us from any competitive offering.”

Original Article

Russia, Moscow

The city council of Moscow passed Resolution # 553-PP –State of the Works and Further Measures to Promote the Use of Compressed Natural Gas as a Motor Fuel for the Automotive transport of Moscow — in June. The Resolution aims to reduce the harmful effects of transport on environment and health of the population of Moscow by expanding the use of CNG as a motor fuel in the city. Practical implementation is underway, facilitated by an earlier decision by the Moscow government, N 170-PP (March 2002), which introduced alternative motor fuels for road transport to the city.

Eugene Pronin, NGVRUS president, referred to the Resolution as opening Moscow to CNG investment and development.  Areas for potential investment are:

• Building CNG/LNG filling stations;
• Assembly / construction of OEM NGVs;
• Manufacturing high pressure cylinders;
• Setting up transportation companies (taxis, buses, trucks) that use NGVs.

The key points of the Resolution are:

• Social facilities (hospitals, kindergartens, schools) shall be served by Euro-4 vehicles or CNG vehicles.
• Electrical and CNG trucks vehicles will be exempt from the ban to enter the central area of Moscow.
• Communal vehicles in the central are of Moscow shall use alternative fuels (CNG, electric power).
• Multifuel filling stations in Moscow, where CNG make no less than 30% of the overall fuel sales, and automotive companies, where no less than 50% of the fleet are vehicle powered by alternative fuels (CNG and electric power) may get at least 5 year land tax holidays.
• Six Moscow bus companies will switch to CNG.
• 21 sites are approved for construction CNF filling stations.
• Filling stations without CNG options will not be allowed in Moscow.
• A Moscow law on the Use of Alternative Transportation Fuels will be developed.
• Electrical and CNG trucks vehicles will be exempt from the ban to enter restricted traffic zones.
• Government of Moscow intends to begin OEM production of NGVs in the city.
• Moscow NGVs will be used to serve the XXII Olympic Winter Games in Sochi, in February 2014.
• Biomethane from sewage water and landfills will be produced in Moscow.

Responsibility for rolling out the implementation and operation of the project, including development of associated infrastructure, has been allocated to the Department of Transport and Communications of Moscow.