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Natural Gas

About Natural Gas (CNG & LNG)

Natural gas first became available as a transportation fuel in the 1930s. Advancements in engine and storage technology, more stringent emissions standards, and lower costs have led to an increase in the interest in and the viability of natural gas as a transportation fuel. Natural gas is a clean burning, domestically produced, and widely available fuel.

Natural gas is used in two forms in vehicles—either as Compressed Natural Gas (CNG) or as Liquefied Natural Gas (LNG). The U.S. Department of Energy’s Alternative Fuels Data Center highlights the following Natural Gas Fuel Basics:

CNG is stored onboard vehicles in cylinders at a pressure of 3,000 – 3,600 pounds per square inch. Vehicles fueled by CNG achieve a similar fuel economy to conventional gasoline-powered vehicles on GGE basis. A GGE equals about 5.66 pounds of CNG. CNG is appropriate for light-, medium-, and heavy-duty applications.

LNG is a clear, odorless liquid that forms when natural gas is cooled to -259 degrees Fahrenheit through a process called liquefaction. LNG is stored onboard vehicles in double-walled, vacuum-insulated pressure vessels. A GGE equals about 1.5 gallons of LNG. LNG is appropriate for medium- and heavy-duty vehicles.

Natural Gas Vehicles Applications

The industry is ever-changing and new makes and models of vehicles available with natural gas options or conversion systems are regularly announced. Natural gas vehicles can be dedicated, bi-fuel, or dual-fuel.

Below is a list of markets with natural gas vehicle options currently available. The Alternative Fuels Readiness Workbook has resources to help identify available vehicles, engines, and conversion systems.

  • Light-duty vehicles, including models such as sedans, cargo vans, and pick-up trucks
  • Medium- and heavy-duty vehicles:
    • School buses
    • Shuttle buses
    • Transit buses
    • Trolleys
    • Refuse haulers 
    • Street sweepers
    • Tractors
    • Vans
    • Vocational trucks

Click on the Vehicle Availability icon above to search for currently available natural gas vehicles, engines, and conversions.

Maintenance and Fueling for Natural Gas Vehicles

There are maintenance-related aspects to consider when deploying alternative fuels into a fleet. Access to qualified technicians to service vehicles, modifications to existing on-site maintenance facilities, and access to adequate fueling stations are critical considerations.

The Alternative Fuels Readiness Workbook has additional guidance and resources regarding maintenance and fueling considerations. Click on the Alternative Fueling Station Locator icon above to search for accessible natural gas fueling stations.

Cost Calculators

There are many tools available online to help calculate different aspects of natural gas vehicle deployment including petroleum reduction, return of investment, yearly savings, emissions, etc. The tools range in complexity, with the more basic calculators providing estimated savings and payback and more complex models addressing cost of ownership and emission reductions.

U.S. Department of Energy’s Vehicle Cost Calculator - Calculates total cost of ownership and emissions based on individual driving habits, comparing up to eight vehicle makes and models

Vehicle and Infrastructure Cash-Flow Evaluation Model - Evaluates return on investment and payback period for natural gas vehicles and infrastructure

Alternative Fuel Life-Cycle Environment and Economic Transportation Tool - Calculates a fleet’s petroleum use, cost of ownership, and air pollutant and greenhouse gas emissions

Cynergy Fuels Calculator - Calculates an estimate of annual fuel savings, net savings, fuel cost savings per mile, and simple payback on incremental cost

Natural Gas Vehicle and Infrastructure Incentives

There are a variety of incentives available to help offset the costs of purchasing natural gas vehicles, fueling equipment, and conversions, as well as to encourage the use of natural gas vehicles. Incentives are available at both the federal and state levels. Information about federal incentives and the incentives in Alabama, Georgia, South Carolina, and Tennessee are included below. Additional federal and state incentives for all types of alternative fuels can be found at the U.S. Department of Energy's Alternative Fuel Data Center as well as in Part 3: Policy of the Alternative Fuels Readiness Workbook.

Federal Natural Gas Vehicle Incentives

  • Alternative Fuel Tax Exemption: The federal government provides a tax exemption on alternative fuels used in some nontaxable circumstances. Common nontaxable uses in motor vehicles can include: in a school bus, on a farm for farming purposes, in certain intercity and local buses, and exclusive use by a nonprofit educational organization. This exemption is not available to tax exempt entities that are not liable for excise taxes on transportation fuels. For more information, visit: http://www.afdc.energy.gov/laws/397
  • Improved Energy Technology Loans: The U.S. Department of Energy is providing loan guarantees to eligible projects that support early commercial use of advanced technologies, including AFVs that reduce air pollution and greenhouse gases. For more information, visit: http://www.afdc.energy.gov/laws/laws/US/tech/3253
  • High Occupancy Vehicle (HOV) Lane Exemption: States are allowed to exempt certified low emission and energy-efficient vehicles from HOV lane requirements within the state. Eligible vehicles must be certified by the U.S. Environmental Protection Agency (EPA) and appropriately labeled for use in HOV lanes. The U.S. Department of Transportation is responsible for planning and implementing HOV programs, including the exemption criteria established by EPA. States that choose to adopt these requirements will be responsible for enforcement and vehicle labeling. The HOV exemption for low emission and energy-efficient vehicle expires September 30, 2017. For more information, visit: http://www.afdc.energy.gov/laws/law/US/386

Natural Gas Incentives in the Southeast Region

Alabama

  • AlabamaSaves: Alabama businesses are provided one percent fixed rate financing for LNG/CNG or propane fleet conversions, lighting, HVAC, and other energy projects. As of April 2013, more than 20 loans have closed and nearly $17 million of funds have been deployed. For more information, visit: http://www.alabamasaves.com/Overview.aspx
  • Local Government Energy Loan Program: The Alabama Local Government Energy Loan Program (LGELP) provides low-cost revolving loans for energy efficiency projects in buildings as well as for conversion of vehicles to LNG/CNG or propane. Through the program, local governments and public colleges and universities can borrow up to $350,000 for fleet conversions. For more information visit: http://www.adeca.alabama.gov/Divisions/energy/Pages/EnergyFinancing.aspx

Contact the Alabama Clean Fuels Coalition for more information.

Georgia

  • Alternative Fuel Vehicle (AFV) Tax Credit: The state of Georgia offers an income tax credit for 10 of the cost to purchase or lease a new dedicated Alternative Fuel Low Emission Vehicle (LEV) or to convert a vehicle to operate solely on an alternative fuel that meets the standards for a low emission vehicle, up to $2,500 per vehicle. It is important to note that this incentive does not apply to hybrid electric, flex fuel, or biPfuel vehicles. Any portion of the credit not used in the year the LEV is purchased or converted may be carried over for up to five years. For more information, visit: http://www.afdc.energy.gov/laws/law/GA/5424
  • Alternative Fuel Vehicle (AFV) High Occupancy Vehicle (HOV) Lane Exemption: The state of Georgia offers a special license plate for alternative fuel vehicles, which allows access to the designated HOV lanes. Any vehicle that has been certified by the EPA in accordance with the Federal Clean Air Act may apply for the Georgia AFV License Plate. Alternative fuel vehicles displaying the proper AFV license plate may use HOV lanes, regardless of the number of passengers. In addition, vehicles with the AFV tag may also use the state’s High Occupancy Toll (HOT) lanes toll-free. For more information, visit http://www.afdc.energy.gov/laws/law/GA/5183
  • Commercial Alternative Fuel Vehicle (AFV) Tax Credit: Beginning July 1, 2015, the state of Georgia will offer an income tax credit is available to taxpayers who purchase new commercial medium-duty or heavy-duty AFVs that operate using at least 90 alternative fuel. Eligible alternative fuels include electricity, propane, natural gas, or hydrogen fuel. Medium-duty hybrid electric vehicles also qualify. Eligible medium-duty AFVs with a gross vehicle weight rating (GVWR) between 8,500 and 26,001 pounds (lbs.) may qualify for a credit of up to $12,000. Heavy-duty AFVs with a GVWR over 26,001 lbs. may qualify for a credit of up to $20,000. The maximum credit per taxpayer is $250,000 and no unused portion of the credit may be carried forward. Qualified AFVs must be purchased before June 30, 2017, remain registered in Georgia for at least five years, be certified by the Georgia Board of Natural Resources, and accumulate at least 75 of their annual mileage in Georgia. The Georgia Department of Revenue will pre-approve credit applications on a first come, first served basis. Up to $2.5 million in total credits will be available each fiscal year. For more information, visit: http://www.afdc.energy.gov/laws/law/GA/11420

Contact Clean Cities–Georgia for more information.

South Carolina

  • Energy Efficiency Revolving Loan (EERL): This loan fund is open to business or industry, utilities, and government agencies and fleet conversions are eligible under the program and the loan can be used for fuel kits in conversion or the alternative fuel upfit cost in a new vehicle. It has a low interest rate that varies on a transaction-by-transaction basis. Interested parties must complete an application, and have an approved energy conservation plan and a technical analysis. This loan, which lasts for one-and-a-half times the expected payback of the loan, is evaluated based on financial stability of the borrower and technical merit of the proposed energy plan and has a maximum amount of $1 million. For more information, visit: http://www.energy.sc.gov/incentives/eerl
  • ConserFund: The South Carolina Energy Office administers a low-interest loan program for energyGefficiency improvements and is available to state and local governments, school districts, and non-profits. Fleet conversions to alternative fuels are eligible under the program and the loan can be used for fuel kits in conversion or the alternative fuel upfit cost in a new vehicle. The loan has a two percent interest rate for up to $500,000 per fiscal year. For more information, visit: http://www.energy.sc.gov/incentives/conserfund
  • SouthCarolinaSaves: Abundant Power offers low cost financing to South Carolina governmental, institutional, and commercial and industrial properties for qualified conservation measures, including LNG/CNG or propane fleet conversions. A below market rate is enabled through the use of Qualified Energy Conservation Bonds allocated by the South Carolina Energy Office and issued through the South Carolina Jobs-Economic Development Authority (JEDA). The Program's funding may be used to purchase and install energy efficiency and alternative fueling projects (fleets and infrastructure) that achieve a 10Gyear payback or better. For more information, contact Greg Montgomery with Abundant Power: This email address is being protected from spambots. You need JavaScript enabled to view it.

Contact the Palmetto State Clean Fuels Coalition for more information

Tennessee Incentives

  • Reduced Valuation of CNG Infrastructure for Property Tax: Any public utility, commercial, or industrial property certified to fuel natural gas vehicles will be valued for property tax purposes at no more than 30 of its total installed cost. (Reference House Bill 1272, 2013, and Tennessee Code 67G5G601 and 67G4G2004). http://www.afdc.energy.gov/laws/10960
  • High Occupancy Vehicle (HOV) Lane Exemption: Any Inherently Low Emission Vehicles or Low Emission and EnergyGEfficient Vehicles as defined by the U.S. Environmental Protection Agency weighing 26,000 lbs. or less, are permitted the use of HOV lanes with no restriction on passenger number. There are designated AFV stickers that indicate single occupant AFVs permitted to drive in the HOV lane. For more information, visit: http://www.afdc.energy.gov/laws/law/TN/6433
  • Green Parking Permit (Nashville): Clean technology vehicles may be eligible for a Green Parking permit that allows for free parking only at metered spaces located within the Downtown Central Business Improvement District. The permit is only available for private passenger vehicles. For more information, visit: http://www.nashvilleclerk.com/motor-vehicles/green-parking-permit/

For more information, contact the Tennessee Clean Cities Coalition in your area: East Tennessee Clean Fuels Coalition | Middle Tennessee Clean Fuels | West Tennessee Clean Fuels Coalition

Utility Programs Influencing NGV Deployment in the Southeast Region

In addition to the federal and state policies, there are several utility-sponsored programs that may be of assistance to fleets interested in deploying NGVs or installing natural gas fueling infrastructure. Highlights of these programs are included below.

Georgia Utility

  • Compressed Natural Gas Infrastructure Analysis: AGL Resources and its subsidiaries (Atlanta Gas Light, Chattanooga Gas, Elkton Gas, Florida City Gas, Elizabethtown Gas, Nicor Gas, and Virginia Natural Gas) offer preliminary feasibility studies and energy analysis to assist in evaluating potential CNG fueling stations for fleet applications.
  • Reduced Compressed Natural Gas Fueling Infrastructure Lease: Atlanta Gas Light (AGL) offers a reduced cost lease on the BRC FuelMaker Phill CNG vehicle home refueling appliance. To qualify, applicants must be AGL customers, meet the specified credit requirements, and agree to the terms of the standard lease agreement. The $60 per month lease option is available to the first 500 applicants and includes installation costs of up to $2,000.
  • Atlanta Gas Light: Atlanta Gas Light (AGL) has a VG52 rate which provides for AGL to build and maintain CNG stations for fleet customers and CNG retailers. Generally speaking, AGL installs all of the specialized CNG equipment such as compressor(s), storage, controls, dispenser(s), card reader(s), etc. and this can also include the concrete work for dispenser island(s) and canopy. The customer would typically provide the land and do any site work such as grading, paving, lighting, signage, etc. AGL provides comprehensive maintenance of the CNG equipment and the customer would operate the station, including setting the price at the dispensers (in the case of a retail CNG station), and remitting any motor fuel taxes that are due. AGL recovers its costs of capital and maintenance of the station through the VG52 Facilities Charge that is added to the customer’s gas bill.

Tennessee Utility

  • Compressed Natural Gas Infrastructure Analysis: AGL Resources and its subsidiaries (Atlanta Gas Light, Chattanooga Gas, Elkton Gas, Florida City Gas, Elizabethtown Gas, Nicor Gas, and Virginia Natural Gas) offer preliminary feasibility studies and energy analysis to assist in evaluating potential CNG fueling stations for fleet applications. Chattanooga Gas is the gas utility in Hamilton County and Bradley County, TN.
  • Chattanooga Gas Company VL1 Rate: Chattanooga Gas Company (CGC) has a VG1 rate which provides for CGC to build and maintain CNG stations for fleet customers and CNG retailers. Generally speaking, CGC installs all of the specialized CNG equipment such as compressor(s), storage, controls, dispenser(s), card reader(s), etc. and this can also include the concrete work for dispenser island(s) and canopy. The customer would typically provide the land and do any site work such as grading, paving, lighting, signage, etc. CGC provides comprehensive maintenance of the CNG equipment and the customer would operate the station, including setting the price at the dispensers (in the case of a retail CNG station), and remitting any motor fuel taxes that are due. CGC recovers its costs of capital and maintenance of the station through the VG1 Facilities Charge that is added to the customer’s gas bill.

Natural Gas Case Studies

Click on the Case Studies icon above for case studies highlighting the successful deployment of natural gas from the four-state region.

Alternative Fuels Readiness Workbook

The Alternative Fuels Readiness Workbook provides resources and tools to help educate fleets about natural gas and propane vehicles, including an introduction to the fuel, applications appropriate for the fuel, discussions regarding vehicle acquisition and fueling infrastructure, as well as information regarding incentives and programs that may be available to a fleet. Download the natural gas section of the workbook.

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