In Pittsburgh, positive environmental news coming out of DUG East carried more than a touch of irony in a city once tarred by its image of old-world steel and smokestacks. At the event held in mid-November, Range Resources Corp. chief operating officer Ray Walker said the U.S. recorded “the world’s largest decline in greenhouse gas emissions” in 2006-2012, reducing emissions by 450 million tons. In addition, the U.S. lowered COemissions by 500 megatons, equivalent to about twice the entire global reductions achieved over the past 20 years, he said, citing Copenhagen Consensus Center data.

Quite an accomplishment for a country that hasn’t ratified the Kyoto Protocol!

And, it is the abundance of natural gas from the Marcellus and a host of other unconventional plays that has helped improve air quality. For the first time, this past April, cheap natural gas began rivaling coal as the primary fuel source for U.S. power generation, and few see this trend at risk.

Tom Petrie, chairman of Petrie Partners, showed a “Future Fuel Mix Vision” slide, developed by Encana Corp. and updated by his firm. It projected natural gas capturing a 48% share of the power generation market, up from 26% in 2011, as coal’s share erodes further in the period to 2030.

In the transportation sector, there are also signs of accelerating demand.

Fleet vehicles have historically led the way in compressed natural gas (CNG) development—UPS has used CNG engines in its fleet since 1989—while growth in demand for smaller alternative fuel vehicles has materialized more slowly.

That may be about to change.

In a joint effort led by Oklahoma Governor Mary Fallin and Colorado Governor John Hickenlooper, an initiative has been successful in combining the purchasing power of 22 states for the purpose of buying CNG vehicles as aging government vehicles need to be replaced.

The multistate solicitation followed visits by the governors to the Big Three automakers in Detroit, as well as discussions by phone with Honda. The memorandum of understanding agreed to by the states describes a coordinated effort “to provide a demand base sufficient to support the design, manufacture, and sale of functional and affordable original equipment manufacturer (OEM) natural gas vehicles by auto manufacturers in the U.S.”

The savings possible through the multistate request for proposal (RFP) are big. Whereas a CNG version of a three-quarter-ton Dodge Ram 2500 would have cost $36,302 previously, the post-RFP price is $29,993, a savings of $6,309 per vehicle.

With a conventional gasoline counterpart costing around $24,350, the premium initially paid for a CNG vehicle—to be recouped through lower natural gas fuel costs over the life of the vehicle—has narrowed to almost $5,600 post-RFP, down from nearly a $12,000 premium previously.

With substantially lower fuel costs for CNG compared to gasoline, payout on a CNG vehicle is achieved in 30,000 to 36,000 miles versus an average vehicle life of 120,000 miles. Taxpayer savings to operate a three-quarter-ton CNG pickup truck over its life cycle versus its gasoline counterpart nets out to about $20,000, according to Governor Fallin’s office.

For now, it is not clear how many CNG vehicle orders will be funneled through the solicitation, given that state legislative sessions are beginning a new year and budgets are still pending. However, Oklahoma alone has already placed orders for more than 200 CNG vehicles.

For all 22 states, the talk is of demand adding up to several thousand CNG vehicle orders, and potentially more as counties, municipalities and other political subdivisions access the procurement process.

Importantly, in addition to ongoing annual CNG vehicle procurements, the initial solicitation may pave the way for an expansion of OEM production of CNG vehicles beyond one-ton and three-quarter-ton models and into half-ton pickup trucks as well as full and midsize sedans. Not yet manufactured on an OEM basis, these comprise the largest class of government vehicles in Oklahoma and many other states.

Could this become a turning point in accelerating demand for natural gas for CNG vehicles? Who knows for sure, but the size of the prize is clear.

“One of the things we need to do as an industry is to work on markets for our products,” said Walker. “Did you know that if we took all the one-ton and less vehicles in this country and converted them to CNG tomorrow, that would be 65 billion cubic feet per day of consumption? We only produce about 65 billion cubic feet per day. That’s a huge market.”