Been to a gas station lately? If you drive a car, like most Americans, you’ve probably seen the numbers at the pump keep climbing higher and higher. For most families and businesses, that also means higher costs in other areas of life, including groceries and other products that are shipped using large trucks. Unlike traditional gasoline and diesel fuel, CNG can be produced domestically in the US, keeping the dependency on foreign oil low.
Compressed natural gas (CNG) is a fossil fuel substitute for gasoline, diesel, or propane/LPG. Although its combustion does produce greenhouse gases, it is a more environmentally clean alternative to those fuels, and it is much safer than other fuels in the event of a spill because natural gas is lighter than air, and disperses quickly when released. CNG may also be mixed with biogas, produced from landfills or wastewater. Currently vehicles that used CNG pay a set fee and have to put a decal on their vehicle that designates them as an alternative fuel vehicle.
House Bill 2141, sponsored by House Floor Leader Rep. John Diehl, R-Town and Country, would specify measurement standards and tax rates for CNG and LNG as a motor fuel and remove them from the provisions regarding alternative fuel decals and tax requirements. The tax on CNG fuel must be five cents per gallon until December 31, 2019 and then ten cents per gallon until Dec. 31, 2024, and then 15 cents per gallon thereafter. The bill was heard in the House Transportation Committee.
“The taxation of this fuel needs to be on par with traditional fuels,” Rep. Diehl testified. “If we make it equivalent to traditional fuels it will create tax parity for more vehicles.”
Currently the fee paid by some vehicles for the decal costs more than a traditional tax on the fuel they are using.
Larry Plescia testified on behalf of Missouri Chamber members Laclede Gas.
“The decal fee system is a barrier,” Plescia testified. “13 states in the last 18 months have abolished their decal feels and phased in a fee system like this bill proposes. It creates a better system because drivers are actually paying by the amount of fuel they are using rather than a fee system that is costing them more.”
Natural gas has become easier to obtain in the US due to the shale gas revolution. Natural gas can be found in large amounts in shale rock formations and with improved drilling techniques, is more readily available for consumption in the US. The price difference between the two fuels can be as much as $3.50/gallon for diesel and $1.25/gallon for CNG, presenting a huge savings by switching to natural gas.
Alternative fuels are known to greatly optimize engine performance, increase fuel mileage, lower the need for expensive exhaust systems, increases horsepower and torque, decreases engine oil dilution and contamination, increases engine life and saves the owner of the vehicle money over time.
The committee took no action on the bill.
For more information, please contact Jay Atkins, Missouri Chamber general counsel, at firstname.lastname@example.org or by phone at 573-634-3511.