There's a lot to like about compressed natural gas.
It's cheaper than gasoline or diesel fuel.
It burns cleaner than those other fuels too.
Advocates also point out that it is an American product with abundant supply.
Those factors make CNG an increasingly popular alternative vehicle fuel, but it's not for everybody — yet.
It costs an additional $8,000 to buy the only available dedicated CNG vehicle or $10,000 or more to convert a vehicle to run on CNG.
Oklahoma tax credits can reduce the cost for some, but not everyone. There currently are no federal tax credits for CNG vehicles.
Edmond CPA David Phillips said Oklahoma's tax credits are only available to people who pay Oklahoma income tax; it is not a rebate.
“There's a whole lot of people ... that don't pay any income tax,” he said.
Still the Oklahoma Tax Commission expected to grant about $15.6 million in CNG-related tax credits in fiscal year 2009-2010. That figure includes credits for other alternative fuels and fueling equipment.
Phillips said people thinking about switching to CNG should look at their 1040 tax form to see how much income tax they paid.
“If that number is zero, you're not going to get a tax credit on CNG,” he said. “You have to remember that.”
Popular fleet alternative
Chesapeake Energy Corp. is an outspoken advocate of CNG as a vehicle fuel.
The Oklahoma City-based company, which bills itself as “America's Champion of Natural Gas,” recently finished converting its 800-vehicle Oklahoma fleet to run on CNG.
James Roller, Chesapeake's market development coordinator, acknowledged converting a vehicle to run on CNG is an expensive process, one he likened to building a house.
The cost varies according to a buyer's needs. He said some drivers will be OK with the 9-gallon tank used in some conversions, while others will want a vehicle that can hold more fuel for longer trips.
“So much of this is based on the size of the tanks,” Roller said.
Okarche's OEM Systems, which performed CNG conversions for Chesapeake and others, uses composite tanks that make up a large part of the cost for the conversion kits it uses, general manager John Luber said.
On the plus side, he said those tanks are good for 20 years, so they can be used on more than one vehicle over their life.
Luber said moving a tank from one vehicle to another can make subsequent conversions less expensive.
The conversion process takes about a day, with OEM capable of completing as many as 50 a day.
Roller said it is expensive because kit makers have to spend a lot of money to reverse engineer the CNG system for a particular engine type, meeting U.S. Environmental Protection Agency or California Air Resources Board standards along the way.
OEM's Luber recommends using certified
Luber said most conversion kits were developed for fleet vehicles, as companies like UPS and AT&T took advantage of the fuel savings offered by CNG.
Rising gasoline prices have persuaded more “regular drivers” to consider the alternative, he said. Kits are available for a number of newer-model Ford and General Motors vehicles, from the compact Ford Focus to the big SUVs like the Chevrolet Tahoe.
Tax credits aid switch
Phillips made the switch about two years ago after Chesapeake gave away three CNG-fueled Honda Civics at an Oklahoma City Thunder game.
In 2009, those Civics were only available to commercial customers at four dealers: three in California and one in New York, but Phillips was able to buy one through Bob Howard Honda in Oklahoma City.
Phillips said the CNG Civic, which has an 8-gallon fuel tank, works well as he just drives around town.
His purchase was aided by $7,500 in tax credits, including a federal tax credit that is no longer available.
Since then, the CNG Civic has become available for commercial buyers in every state, although Phillips said he has heard the manufacturer is only making about 1,000 of them each year.
“They've got to make more,” he said. “A thousand just isn't enough.”
State tax credits
Tax credits can help reduce the cost of converting to compressed natural gas as a vehicle fuel.
Oklahoma offers a credit good for 50 percent of the incremental cost of a CNG vehicle over a gasoline-fueled equivalent. It also applies to conversion costs and installation of fueling infrastructure.
There currently is no federal tax incentive for CNG use, although a five-year credit was included in legislation recently introduced by U.S. Reps. John Sullivan, Dan Boren and
The proposed tax credit would cover 80 percent of the incremental cost for dedicated CNG vehicles or 50 percent of the conversion cost for bi-fuel or dual-fuel vehicles.
Types of CNG vehicles
There are three types of vehicles that run on compressed natural gas:
Writer tests natural gas car
Business Writer Jay F. Marks is in the middle of a two-week compressed natural gas test, driving a bi-fuel Chevrolet Tahoe borrowed from Carter Chevrolet and OEM Systems in Okarche. Watch for updates in The Oklahoman or on the OKC Central blog on NewsOK. You can also follow him on Twitter: @OKenergybeat.