AT&T Inc. will spend up to $565 million over 10 years on alternative-fuel vehicles for its corporate fleet, the most significant investment by a U.S. company in transportation powered by natural gas. The Dallas-based telecommunications provider will purchase 8,000 vehicles that run on compressed natural gas for its fleet of installation and repair vans, and replace about 7,100 passenger cars with hybrid-electric models. The move expands on similar initiatives by U.S. companies including United Parcel Service Inc. and PG&E Corp., which already operate thousands of natural-gas-powered vehicles. AT&T will begin by deploying 800 new CNG and hybrid electric vehicles in 2009. The company said it is paying, on average, 29% more for the vehicles than it would for gasoline-powered models, which it hopes will be offset by lower fuel costs. The company said it anticipates a positive return on its investment in a six-to-10-year timeframe. The nonprofit Center for Automotive Research, in Ann Arbor, Mich., said the AT&T vehicles also would reduce carbon emissions by 211,000 metric tons over 10 years, equivalent to the annual emissions of38,600 gasoline-powered passenger vehicles. The organization estimated the initiative will create or save 5,000 jobs, between manufacturing the vehicles and building and operating CNG stations. AT&T is planning to work with natural gas providers to build up to 40 fueling stations across its operating region. The move comes at a time when green initiatives are fashionable. Moreover, President Barack Obama proposes that the U.S. government invest billions of dollars annually in renewable energy sources and technology to make vehicles more efficient. There are only about 110,000 natural-gas vehicles in the U.S., a sliver of the overall auto market, though there are 10 million such vehicles world-wide. The market is limited by the vehicles' shorter range and high cost, and a dearth of filling stations. Also, the fuel savings for the distance a typical consumer drives is relatively modest. Real-time pricing on natural gas isn't collected, but a comparison of fuel prices in an October U.S. Department of Energy report had the average gasoline price at $3.04 per gallon nationally, while natural gas was $2.01 per gallon equivalent. Since then, the prices of both fuels have fallen. CNG is gaining traction as an alternative fuel for fleets like delivery trucks and buses, which rack up a lot more mileage. UPS recently added 300 CNG delivery trucks to its fleet, bringing its total to over 1,800. AT&T's CNG vehicles would amount to about 10% of the company's fleet. AT&T said Ford Motor Co. will be its initial vendor. AT&T said it will work with U.S. suppliers to convert the vehicles to run on CNG.