CNG Tax Fails to Dampen Industry

Article excerpt

By Ronda Fears

Journal Record Staff Reporter

Oklahoma enthusiasts of compressed natural gas aren't discouraged with its addition to the federal fuel tax roll by the so-called deficit reduction package signed into law Tuesday by President Clinton.

"I don't think it'll affect it that much. We don't think it will be a negative marketing factor," said Eldridge Luber with Oklahoma Natural Gas Co., the state's largest gas utility and loudest cheerleader for CNG.

"The thing that we were concerned about was the Btu tax," he said. Clinton originally proposed a tax based on British thermal unit energy content of fuels.

Congress tacked on an additional 4.3 cents a gallon in federal excise taxes on motor fuels, in lieu of the Btu tax plan. Fuel taxes would have risen about 8 cents a gallon under the Btu tax plan.

Oil and gas producers in Oklahoma are relieved that Clinton's original plan was axed, but economists have said Sooners will be harder hit by the fuel tax than many Americans because Oklahomans drive farther than the average American.

While the tax hike falls at 4.3 cents a gallon on gasoline and diesel, on a per gallon equivalent it is higher for all alternative fuels. Alternative fuel proponents, especially those partial to CNG, are not overly concerned about the fuel tax, though. They, like oil and gas producers, are more relieved that the Btu tax was killed. …