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The use of natural gas and propane vehicles is an important way to diversify U.S. transportation fuel supply and reduce U.S. reliance on foreign oil. Both natural gas and propane are primarily produced in the U.S., which increases U.S. energy security and creates job opportunities. Most natural gas and propane vehicles in Indiana are used by government or commercial fleets, and natural gas and propane filling stations are spreading quickly across Indiana.
Natural gas can power vehicles in the form of compressed natural gas (CNG) or liquefied natural gas (LNG). Natural gas is mainly found in underground rock formations, but it can also be derived from renewable biomass resources, such as the break down of plant or animal waste in landfills or anaerobic digestors.
Compressed Natural Gas (CNG) stays in a gaseous form and is stored on a vehicle in high pressure tanks—up to 3,600 pounds per square inch. A CNG-powered vehicle gets about the same fuel economy as a conventional gasoline vehicle on a gasoline gallon equivalent (GGE) basis (a GGE equals about 5.7 lb of CNG). Light duty trucks tend to use CNG instead of LNG.
Propane becomes liquid when pressurized and is then known as liquefied petroleum gas (LPG). LPG is stored on a vehicle in a tank pressurized to around 150 pounds per square inch. LPG has high energy density and low maintenance costs. LPG's high octane rating (104 to 112 compared with 87 to 92 for gasoline) has resulted in documented engine life of up to two times that of gasoline engines. However, a gallon of LPG has about 25% less energy than a gallon of gasoline.
Federal Tax Credits for Fueling Equipment:The Alternative Fuel Vehicle Refueling Property credit applies to CNG, LNG, and propane fueling equipment. Consumers who purchase qualified residential fueling equipment prior to December 31, 2013 may receive a federal tax credit of up to $1,000. Businesses and investors who purchased fueling equipment may receive a federal tax credit of 30% of the equipment and installation cost, up to $30,000. If you installed a fueling station in 2012, you have until April 15 to prepare and file your income tax return for 2012. Learn more about the Alternative Fuel Vehicle Refueling Property credit here.