The almighty government dollar is back at work.
At least when it comes to encouraging the expansion of cleaner trucking.
Last month, the U.S. General Services Administration, the government's purchasing arm, said it wants companies that deliver packages across the government to not only be selected based on price but on their ability to meet annual targets for fuel efficiency, greenhouse gas intensity and alternative fuel use.
Translation: We need more electric and natural-gas vehicles.
UPS currently holds the contract, which expires this year. FedEx had it the previous five years.
Who wants $1.5 billion over the next five years? That's express and ground shipping of 15 million to 35 million packages per year.
In early October, UPS announced plans to invest about $50 million to build nine liquefied-natural-gas fueling stations, including expansion into Pennsylvania. It previously announced four stations. All 13 should be operational by the end of 2014.
"This new GSA contract could set an important new benchmark for government transport contracts," said Gregory Staple, CEO of the American Clean Skies Foundation, a Washington, D.C.-based nonprofit that has been urging the GSA to make the move.
The foundation also is urging the Department of Defense to do the same in selecting vendors for its $2.5 billion Worldwide Express delivery services contract. The federal government could leverage the $150 billion it spends each year on freight services to meet environmental objectives, they say.
What does it mean?
Bottom line: It should lead to a much faster progression of alternative fueling stations.
The Alternative Fuels Data Center said there are currently 1,263 compressed natural gas, or CNG, stations in the U.S., including private stations. On the LNG side, there are just 81.
On electric, the number of stations totals more than 8,300, including private facilities.
According to the U.S. Department of Energy, costs for installing a CNG fueling station can range from $10,000 to $2 million, depending on the size and application. The Energy Information Administration estimates the cost of LNG fueling sites at $1 million to $4 million.
What do you think? Will the green carrot from the government help grow a robust network of new fueling sites?