Compressed natural gas has dipped below $1 a gallon at a handful of stations around Oklahoma, thanks to a tax credit revived in last week's “fiscal cliff” settlement.
The American Taxpayer Relief Act included a package of tax credit extensions that had been recommended by the Senate Finance Committee. One of them was a 50-cents-a-gallon credit on compressed natural gas (CNG).
“As soon as we could verify it, we immediately dropped our price,” said Jim Griffith, CEO of Stillwater-based fuel retailer OnCue Express.
He said he hopes the new lower price will encourage more drivers to convert to CNG.
Taylor Shinn, Chesapeake Energy Corp.'s senior director of corporate development, said the tax credit makes CNG an even more attractive option for those looking to save money on fuel.
“This credit continues to boost natural gas in the transportation market and further stimulates the necessary adoption scale that is developing in our country,” Shinn said. “Supporting natural gas vehicles means a stronger economic future for our state, and a stronger energy future for our country.”
Rich Kolodziej, president of advocacy group NGVAmerica, said the tax credit means 2013 will be a good year for natural gas vehicles, with the release of a new natural gas engine for trucks coming this spring.
Kolodziej said the tax credit should increase the price gap between CNG and gasoline or diesel, making it easier for drivers to switch. The payoff could come in as little as three years for some fleet vehicles.
“I think that is going to throw a lot of people off the fence, toward natural gas,” he said.
That has happened already at OnCue and Love's Travel Stops and Country Stores, two of Oklahoma's leading CNG retailers.
Love's spokeswoman Jenny Love Meyer said the lower prices also will forward the company's plan to add CNG at more of its locations.
“We are constantly monitoring demand for domestically-produced natural gas as a transportation fuel, and we see a need for it across the country, especially in the trucking industry,” she said.
Griffith said that OnCue Express expects to add CNG at as many as another dozen of its locations this year.