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Natural Gas and Propane
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 digesters. Learn more about natural gas here.
- 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.
- Liquefied Natural Gas (LNG) allows more energy to be stored on board in a small volume, so it is suited for long distance or heavy duty trucks. LNG is produced when natural gas is purified and condensed into liquid at 260°F. At atmospheric pressure, LNG occupies only 1/600 the volume of natural gas in vapor form. A gasoline gallon equivalent (GGE) equals about 1.5 gallons of LNG.
Propane becomes liquid when pressurized and is then known as liquefied petroleum gas (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. Its 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. Learn more about propane here.
Fueling Station Locations
Navigate to our Find A Pump Near You page to use the map to find the closest CNG, LNG and Propane stations near you. There you can locate...
- CNG: You can find Indiana's 26 CNG stations here.
- LNG: You can find Indiana's 1 LNG station here.
- Propane (LPG): You can find Indiana's 12 propane stations here.
Tax Credits for Natural Gas Vehicles and Fueling Equipment
State Natural Gas Tax Credit: Effective January 1, 2014, a carrier operating a commercial natural gas vehicle (NGV) in Indiana may claim a credit equal to 12% of the road taxes imposed on its consumption of compressed natural gas in the previous year. The credit is refundable. (Reference House Bill 1324, 2013, and Indiana Code 6-6-4.1-1 and 6-6-12).
Propane Equipment and Infrastructure Liability Exemption: Propane equipment, infrastructure, and fuel providers are exempt from civil liability for personal injury or property damage resulting from an individual who modifies, repairs, materially alters, or uses propane equipment or fuel for purposes not intended by the manufacturer or fuel producer. (Reference Indiana Code 34-31-11.2)
State Natural Gas Tax Exemption for Public Transportation: Natural gas purchased by a public transportation is exempt from the state gross retail tax until December 31, 2017. (Reference Indiana Code 6-2.5-5-27)
Alternative Fuel Tax Exemption: Alternative fuels used in a manner that the Internal Revenue Service (IRS) deems as nontaxable are exempt from federal fuel taxes. Common nontaxable uses in a motor vehicle are: on a farm for farming purposes; in certain intercity and local buses; in a school bus; exclusive use by a non-profit educational organization; and exclusive use by a state, political subdivision of a state, or the District of Columbia. This exemption is not available to tax exempt entities that are not liable for excise taxes on transportation fuel. For more information, see IRS Publication 510 (PDF). (Reference 26 U.S. Code 4041).
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, 2016 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.
Federal Volumetric Excise Tax Credit (VEETC) for CNG and LNG: Private and public entities and individuals can claim a federal excise tax credit of 50 cents per gallon of natural gas transportation fuel for their 2014. This tax credit expired after December 31, 2014.
Financial Analysis Tool
This tool shows what the payback period could be for using CNG versus diesel.