Wednesday, December 30, 2015

UCCC 2015 Annual Report Survey

Dear UCCC Stakeholders,

Utah Clean Cities Coalition would like to wish you and your families a very happy, healthy, and prosperous New Year!

We have big plans for 2016 and we look forward to working with you on many new and exciting initiatives! While we are rolling out the groundwork for those projects, we are also in the process of reporting on our progress in 2015. Please help us complete our Annual AFV and Alternative Fuel Use Report.

Each year UCCC collects data on alternative fuel (AF) and advanced technology vehicle (AFV) usage in Utah (see below for 2014 results). This data helps us quantify the success of our programs and our stakeholder's efforts to reduce the regions dependence on petroleum imports. This information also gives us insights into the local AFV market, allowing us to make informed decisions on how best to direct our efforts in the coming year. Last but certainly not least, this data is a significant help when competing for grants, which help bring funding and other resources into our region.

Please use the excel survey below to tell us what your company/fleet has done to reduce petroleum consumption in Utah in the 2015 calendar year. Remember, the more information you can provide the better our report will be!
To download the survey and/or survey instructions click on the images below (if they do not show up in the new browser, refresh the page). Once in full screen mode, click on the download icon in the toolbar at the top of the screen, and save file to your computer. Please read instructions carefully, complete, and return via email to by February 16th 2016.

 Thank you for your participation and for helping us advance our mission of energy, economic and environmental security!



2014 Survey Results

December 2015 Federal Alt Fuel Legislation Overview

December was a busy month on Capital Hill. On Friday, December 4th, President Obama signed the Fixing America’s Surface Transportation (FAST) Act, (Public Law 114-94). The FAST Act, like prior surface transportation legislation, authorizes funds for highway construction, as well as highway safety and public transportation programs. Two weeks later, on December 18th, the Protecting Americans from Tax Hikes (PATH) Act of 2015 was signed into law, as part of the $1.15 trillion omnibus spending package to fund the federal government through October 2016. Included with these appropriations are tax provisions that will retroactively extend several alternative fuel tax credits that expired in 2014, from Jan. 1, 2015, through Dec. 31, 2016. Both pieces of legislation contained critical provisions for the alternative fuel and advanced technology vehicle industry. 
FAST Act provisions with implications for Clean Cities portfolio items:

  • National Electric Vehicle Charging and Alternative Fuel Station Corridors. Section 1413 of the bill charges the U.S. Department of Transportation (DOT) with designating national plug-in electric vehicle (PEV) charging and hydrogen, propane, and natural gas fueling corridors in strategic locations along major highways by December 2016. DOT will update and re-designate the corridors every five years.
  • PEV Charging on Federal Property. Section 1413 also explicitly authorizes the U.S. General Services Administration or other federal agencies to install electric vehicle supply equipment (EVSE) that may be used by federal employees and certain others to charge their privately-owned vehicles. Those who use the EVSE to charge vehicles must pay to reimburse the agencies for the EVSE procurement, installation, and maintenance.
  • State High Occupancy Lane (HOV) Exemptions. Section 1411 extends the provisions related to HOV lane exemptions for U.S. Environmental Protection Agency (EPA)-certified low-emission and energy-efficient vehicles. Only alternative fuel vehicles (AFVs) and PEVs, however, may access HOV lanes toll-free through September 30, 2025. States are allowed to implement toll-access HOV programs for other low-emission and energy-efficient vehicles through September 30, 2019.
  • Tire Fuel Efficiency Standards. Section 24331 states that DOT, EPA, and the U.S. Department of Energy will develop regulations for passenger car tire fuel efficiency standards by December 2017. Some exemptions apply, including light truck, snow, and spare tires.
  • Natural Gas Vehicle Fuel Economy Calculation. Section 24341 moves up to 2017, from 2020, when natural gas vehicle fuel economy calculation methodology (see 40 Code of Federal Regulations 600.510) will change. Model year 2017 and later vehicles will use the new calculation methodology to better align with the conventional vehicle fuel economy methodology update schedule.

PATH Act provisions with implications for Clean Cities portfolio items:

  • Extension of excise tax credits relating to alternative fuels.Section 192 extends of the federal $0.50/gallon alternative fuels excise tax credit on compressed natural gas (CNG), liquefied natural gas (LNG), and and propane. However, according to Section 342, the excise tax credit equivalency for LNG and propane will be measured on on an energy-equivalent basis, rather than on a volumetric one. This provision will make the excise tax credit for LNG and propane used or sold after 2015 approximately $0.29/gallon and approximately $0.36/gallon, respectively.
  • Extension of credit for alternative fuel vehicle refueling property. Section 182 extends the 30% alternative refueling infrastructure tax credit, which is capped at $30,000
  • Extension of credit for new qualified fuel cell motor vehicles. Section 193 extends through 2016 the credit for purchases of new qualified fuel cell motor vehicles. The provision allows a credit of between $4,000 and $40,000 depending on the weight of the vehicle for the purchase of such vehicles.
  • Extension of second generation biofuel producer credit. Section 184 extends through 2016 the credit for cellulosic biofuels producers.
  • Extension of biodiesel and renewable diesel incentives. Section 185 extends through 2016 the existing $1.00 per gallon tax credit for biodiesel and biodiesel mixtures, and the small agri-biodiesel producer credit of 10 cents per gallon. The provision also extends through 2016 the $1.00 per gallon production tax credit for diesel fuel created from biomass. The provision extends through 2016 the fuel excise tax credit for biodiesel mixtures.
  • Extension of special allowance for second generation biofuel plant property. Section 189 extends through 2016 the 50-percent bonus depreciation for cellulosic biofuel facilities.
  • Extension of credit for 2-wheeled plug-in electric vehicles. Section 183 extends through 2016 the 10-percent credit for plug-in electric motorcycles and 2-wheeled vehicles (capped at $2,500).

To view the full text of the FAST Act, visit

In the News:

December Question of the Month

Question of the Month: I heard the Clean Cities website was recently revamped. What changed?

Answer: As the work of Clean Cities continues to grow, the Clean Cities team is committed to ongoing communication about the program’s resources and accomplishments. Last month, Clean Cities launched a new and improved version of its website (, which aims to highlight the program and assist the public and stakeholders.

The redesigned Clean Cities website has a fresh new look, is easy to navigate, and includes many new features to help users learn about and connect with the program.

Below are the top five changes you should know about the site: 

Reorganized Resources: Some resources have moved with the new design. Most notably, funding information ( publications ( now located in the About section, which can be accessed from the top website banner. As before, funding opportunities are separated into current and related categories, and the easily searchable publications are listed by popularity and publish date. Information about Clean Cities partnerships, such as the National Clean Fleets Partnership and the National Parks Initiative, is now conveniently accessed from the Partnerships & Projects section, , which can also be accessed from the top website banner (

Selective Communication Options: It’s easier than ever to stay up to date on Clean Cities. You can now subscribe to the newsletters and updates that you want – and choose to skip those you don’t! You can sign up to receive the Clean Cities Monthly Update, the Clean Cities Now Newsletter, or Webinar Alerts ( The “What’s Happening?” bar on the bottom of the homepage is another easy to way to catch up on the latest events, news, blog posts, and videos.

Searchable Clean Cities Projects: Under the Partnership & Projects section, which is accessed from the top website banner, users may now view and search Clean Cities funded transportation projects ( You can search by keyword or filter by the initiative or award, such as projects under the National Parks Initiative, Electric Vehicle Community Readiness, or American Recovery and Reinvestment Act Project Awards. Project descriptions include basic information, states impacted, partners involved, the Clean Cities award amount, and the amount of local matching funds.

Audience-Tailored Content: The new website design clearly separates information for different audiences. While the old website combined resources for the public and resources for Clean Cities coordinators, the new design restricts public access to the Coordinator Toolbox (located in the upper right corner of the header). The new arrangement allows coordinators to find tools and resources specific to their coalition in one place using one password, as well as ensures that all other website content is useful for and tailored to the general public. Coordinators with questions about accessing the Toolbox may refer to recent Clean Cities communication and webinars.

Clean Cities On-the-Go: Lastly, the new design has an updated, clean aesthetic. From the newly organized coalition pages ( the streamlined Technical Assistance page (, the website is intuitive and easy to read. As an added bonus, the new website is mobile-friendly and responsive, so you can access Clean Cities information wherever you go.

Visit the updated Clean Cities website to see all of these features and more!

Happy Holidays!

Clean Cities Technical Response Service Team

Monday, November 23, 2015

November Question of the Month

Question of the Month: What is renewable natural gas (RNG) and can it be used to fuel vehicles?

Answer: RNG is pipeline-quality natural gas made by collecting and purifying biogas, the methane produced from decomposing organic matter. Biogas can be collected from sources such as landfills, livestock operations, wastewater treatment plants, food manufacturing and wholesalers, supermarkets, restaurants, and hospitals. Once purified to remove contaminants and increase its heat content, the gas is called RNG and is a “drop-in” fuel that can be transported with conventional natural gas in pipelines, dispensed at the same fueling stations, stored in the same storage tanks, and used in natural gas vehicles without any engine modifications.

Despite its advantages, there are only 60 operational RNG production facilities in the United States. Many more use the biogas to generate electricity. This is due to federal and state programs, such as the federal Investment Tax Credit and state renewable portfolio standards, which incentivize the use of biogas for power generation rather than for vehicle fuel.

The purification process for biogas is called conditioning or upgrading, and it involves removing water, carbon dioxide, hydrogen sulfide, and various contaminants and trace elements. From there, RNG can be compressed to make renewable compressed natural gas (R-CNG) or super-cooled to make renewable liquefied natural gas (R-LNG).

RNG is produced from feedstocks that come from a wide range of industrial sectors, many of which already collect and process biomass as part of their daily operations:
·        Landfills: Landfill gas (LFG) is collected from decomposing waste in landfills. According to the U.S. Environmental Protection Agency (EPA), landfills are the third largest source of human-related methane emissions in the United States. Landfills account for 70% of the operational RNG projects in the United States. One of the largest LFG-to-vehicle fuel projects is Waste Management's Altamont Landfill near Livermore, California. This project produces up to 13,000 gallons of R-LNG each day to fuel 300 refuse trucks.
·        Livestock Operations: Animal manure can be collected and taken to an anaerobic digester for RNG production. A few farms across the country have started to use biogas to produce RNG vehicle fuel, including Hilarides Dairy in California and Fair Oaks Dairy in Indiana.
·        Wastewater Treatment Plants: Approximately 9% of the more than 16,000 wastewater treatment plants in the United States use anaerobic digestion to produce biogas. The Janesville Wastewater Treatment Plant in Wisconsin is an example of a plant that uses biogas to produce RNG for use in vehicles.
·        Other Biomass Sources: RNG can also be produced from lignocellulosic material, such as crop residues and dedicated energy crops, through thermochemical conversion, co-digestion, and dry fermentation. These technologies are being used in Europe, but have limited applications in the United States. RNG also can be produced from food waste, either alone or in conjunction with biosolids from livestock operations or wastewater treatment plants. CleanWorld Partners’ Sacramento BioDigester and quasar’s Central Ohio BioEnergy project convert food waste to RNG for vehicle fueling.
RFS2 Compliance
RNG qualifies as a cellulosic biofuel under the EPA’s Renewable Fuel Standard (RFS2) program. In fact, RNG accounted for more than 50 million renewable identification numbers (RINs) in 2014 – 98% of all cellulosic biofuel RINs.  According to organizations that track biofuels market data, cellulosic biofuel RINs were valued at $0.70– 0.85 per diesel gallon equivalent in 2014; this value is expected to increase in the future. 

Other Benefits
Like conventional natural gas, RNG can be produced domestically and can displace the petroleum currently being imported for transportation use. However, RNG offers some additional benefits. RNG has practically a net zero carbon impact. On a lifecycle basis, RNG accounts for fewer greenhouse gas (GHG) emissions than most currently available motor fuels. RNG can reduce GHG emissions by 95% compared to conventional gasoline and diesel fuel. This is partially because capturing biogas from landfills and livestock operations can reduce GHG emissions by preventing methane releases that were occurring into the atmosphere. Additionally, RNG produced through anaerobic digestion eliminates odors and results in nutrient-rich liquid fertilizer as a by-product. Also, biogas feedstocks are plentiful, so RNG could make use of the 450 million pounds of municipal solid waste dumped in landfills, 160 billion pounds of food waste generated, or the 500 million tons of animal waste produced each year.

Like conventional natural gas, the main barriers to RNG are lack of vehicle availability and fueling infrastructure, though efforts are underway to address both of these obstacles. However, RNG production costs exceed those for conventional natural gas, especially for small-scale operations. Small-scale RNG production can cost around $5.50$9 per million British thermal units compared to $4.50 for conventional natural gas. Additional financing and incentive opportunities, as well as state renewable portfolio standards that encourage the investment in biogas for vehicle fuel production, may spur additional production.

More Information
For more information on RNG, please see the following additional resources:
·         Alternative Fuels Data Center’s RNG Production page:
·         American Biogas Council:
·         EPA
o   Landfill Methane Outreach Program:
o   AgSTAR Program:

Clean Cities Technical Response Service Team

Sunday, October 25, 2015

October Question of the Month

Question of the Month: How can I improve my gas mileage while driving this winter?

Answer: Whether taking that long-awaited ski trip or just commuting to work in the frigid weather, there are several things you can do to improve your fuel economy and save money in the wintertime.

Why You Get Worse Gas Mileage When It's Cold

Cold weather and winter driving conditions can reduce your fuel economy significantly. On particularly chilly days,when temperatures drop to 20°F or lower, you can expect to see up to a 12% hit on your fuel economy for short city trips. During very quick trips—traveling only three to four miles—your fuel economy could dip even lower (as much as 22%)!

This reduction in fuel economy is due to several factors. First of all, cold temperatures increase the time it takes your vehicle to warm the cabin, engine, drive-line fluids, and other components up to fuel-efficient operating temperatures. Cold fluids increase the friction on your engine and transmission, which can reduce fuel economy. 

Let’s take a moment to address one of the main myths about driving in cold weather:

Myth: To warm up your engine and vehicle cabin in the wintertime, you should let the engine run for several minutes before driving.

Truth: Most manufacturers recommend driving off gently after about 30 seconds of idling. In fact, the engine will warm up faster when driving. Idling can use a quarter to half a gallon of fuel per hour, and even more fuel if the engine is cold or accessories like seat heaters are on.

Also keep in mind that winter gasoline blends in cold climates have slightly less energy per gallon than summer blends. This is because refineries alter the chemical makeup of gasoline to allow it to evaporate more easily in low temperatures, ensuring proper engine operation.

Aerodynamic drag is another consideration. In simple terms, cold air is denser than warm air, so when temperatures drop, wind resistance increases slightly. This requires a little more power from your engine to drive at a given speed. The effects of aerodynamic drag on fuel economy are most significant at highway speeds.

Winter Fuel-Saving Tips

The following tips can help you warm your car (and fingers!) more efficiently and improve your fuel economy in the winter:
·         Park in a warmer place like a garage that traps heat to keep the initial temperature of your engine and cabin higher than it would be outside in the elements.
·         Avoid idling to warm up the engine and cabin. See more information above.
·         Avoid using seat warmers more than necessary, as they require additional power.
·         Plug-in electric vehicle (PEV) owners: Pre-heat your vehicle while still plugged inSince PEVs use battery power to provide heat to the cabin, cabin and seat heaters can drain the vehicle’s battery and reduce the overall range. If you need to warm up quickly, warm the vehicle while it’s still charging.
·         PEV owners: Use seat heaters instead of the cabin heater when able. Using seat heaters instead of the cabin heater can save energy. Seat heaters use less energy than cabin heaters and can often be more efficient at warming you up quickly in the winter.
·         Read the owner’s manual for detailed information on how your vehicle’s cabin and seat heaters work and how to use them efficiently.

Do you live in a place where snow and ice isn't an issue? Check out the May Question of the Month ( for year-round warm weather driving tips.

More Information

For more information on how to improve your fuel economy, please refer to the following tips:
·         Fuel Economy in Cold Weather -
·         Gas Mileage Tips -
·         Keeping Your Vehicle in Shape -

Clean Cities Technical Response Service Team

Sunday, September 27, 2015

September Question of the Month

Question of the Month: Are fuel taxes equal for all fuels?

Answer: In theory, if all motor fuels were taxed equitably it would ensure tax consistency among jurisdictions and reduce consumer burdens. In practice, motor fuel taxes vary widely between jurisdictions and across fuel types. This is largely because federal and some state highway excise taxes are based on volume, not onenergy content, resulting in significant tax inequity among fuels. As discussed in the July and August Questions of the Month, motor fuel taxes are used to fund transportation infrastructure. The number of vehicle miles traveled on a specific amount of fuel is linked to the amount of energy in the fuel. Therefore, energy content provides a more accurate measure of a vehicle’s impact on a roadway. 

Before we go any further, let’s make sure you understand some basic keywords and phrases regarding energy content:

  • Btu: British thermal units, or the unit of measure to show an amount of energy.
  • Heating value: A measure of energy content in Btus, which represents the amount of heat released during combustion. Typically, we use the lower heating value when comparing fuels.
  • Gasoline gallon equivalent (GGE): The amount of fuel that has the equivalent energy to a gallon of gasoline. Similarly, diesel gallon equivalent (DGE) is the amount of fuel that has the equivalent energy to a gallon of diesel. GGE is used for alternative fuels that typically replace gasoline (e.g., ethanol), whereas DGE is used to measure fuels that replace diesel (e.g., liquefied natural gas, or LNG).

Federal Excise Taxes
Last month, the President signed H.R.3236 (Public Law 114-41), the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, which assesses the federal fuel excise tax levied against LNG and propane on a Btu basis relative to diesel and gasoline, respectively, beginning on January 1, 2016. Compressed natural gas (CNG) is already taxed based on an energy content basis relative to gasoline. Prior to Public Law 114-41, the federal excise taxes for LNG and propane were higher than the conventional fuel counterpart. This is still the case for biodiesel and ethanol, leaving these fuels at a tax disadvantage compared to diesel and gasoline, respectively.

State Excise Taxes
Motor fuel tax variations within and between states are even more complex. Many states have some of the same tax equity issues that we see at the federal level. Plus, there are many different fuel definitions and measures, which create an undue burden for interstate fleets that must comply with the International Fuel Tax Agreement ( For example, only some states tax CNG and LNG on a GGE or DGE basis. Though a number of states are currently evaluating legislative proposals to tax fuels this way, others states are waiting for a decision by the National Conference on Weights and Measures (NCWM). And if NCWM does adopt a standard, states will still have to individually adopt the standard into their laws or regulations before it can be implemented. 

Taxes on Electricity as a Transportation Fuel
Other motor fuels, such as electricity and hydrogen, do not have federal excise tax requirements. Although plug-in electric vehicles (PEVs) and fuel cell electric vehicles (FCEVs) currently represent a very small portion of the total vehicle population, it is likely PEV and FCEV registrations will continue to grow in coming years. Any effort to collect taxes on electricity to pay for highway infrastructure would need to account for the fact that PEVs are capable of fueling at home. In addition, some plug-in hybrid electric vehicle owners pay taxes on their gasoline use. Making the situation even more complicated, electricity is already taxed in ways not tied to highway funding. Some states have implemented annual PEV fees through registration or vehicle decal programs to account for lost revenue from motor fuel taxes, which we discussed in the August Question of the Month.

Refer to the following for more information on motor fuel taxes:

Clean Cities Technical Response Service Team

Friday, July 24, 2015

Outlook: The Fuel Cell and Hydrogen Industry

By Guest Blogger: Sandra Curtin
                           Research and Communications Manager
                           Fuel Cell and Hydrogen Energy Association 

It’s an exciting time to be part of the hydrogen and fuel cell industry.  This energy technology has moved into the commercial realm, with proven benefits spurring repeat customers, growing sales and deployments in a wide range of market sectors.

Fuel cells – devices that utilize hydrogen and hydrogen-rich fuels to generate electricity through a chemical reaction, rather than combustion – are low-to-zero emission, efficient, resilient technologies sold to provide stationary and backup power, portable power, and power for industrial vehicles, zero-emission light duty motor vehicles, and buses.

The hydrogen and fuel cell industry now supplies fuel cells to Fortune 500 companies to deliver clean, reliable, efficient, and cost-effective power for retail sites, warehouses, data centers and other critical facilities.  Municipalities are using them, too, to power facilities like public buildings, emergency services, and waste water treatment plants.  By using fuel cells, both public and corporate facilities can remain up and running when grid power goes down.

Fuel cells are scalable, allowing the technology to power a building, or produce enough power to supply tens of thousands of homes.  eBay boasts one of the largest fuel cell installations in the U.S., with 6 megawatts (MW) installed at its South Jordan,Utah, data center. There are more than 230 MW of fuel cells installed in the U.S. across thousands of sites, ranging in size from a few kilowatts for off-grid applications, providing primary or backup power to cell phone towers, lighting, and monitoring equipment, to multi-MW power plants that supply power directly to the utility grid.  Fuel cells are also a leading solution in the material handling market, with more than 7,000 fuel cell-powered forklifts operating in warehouses and distribution centers across North America.

After finding success in stationary power generation and material handling applications, fuel cells are now moving into the mainstream, available to everyday customers, with the commercial introduction of fuel cell electric vehicles (FCEVs).  In December, Hyundai began leasing Tucson FCEV to individual customers in southern California, Korea and in Europe.  Toyota plans to sell its Mirai FCEV  to the public this autumn and Honda is expected to follow shortly after in 2016.  Most of the other major auto manufacturers are also developing FCEVs.  By 2020 the industry expects to place tens of thousands of FCEVs in the hands of customers in the U.S., Europe and Asia.

Governments and businesses around the world are investing in developing hydrogen infrastructure to prepare for these vehicles.  California has set aside $20 million per yearto fund at least 100 hydrogen stations, enough to support an initial FCEV market.  Automakers are also supporting the launch of FCEVs in California by investing millions in funding and loans to hydrogen station developers.  Beyond California, a network of hydrogen stations is also planned across five northeastern states.  Japan’s government has an initial goal of opening 100 hydrogen stations and had allocated more than $175 million to subsidize construction and operation and  major Japanese automakers have joined to help develop the country’s hydrogen fueling infrastructure.  Korea’s government has a goal of opening 200 hydrogen stations by 2025.  In Europe, Germany, the United Kingdom, and Scandinavia are developing networks of hydrogen stations and are emerging markets for FCEV introductions.

Ultimately, we are confident in the outlook of our industry.  Whether powering homes, businesses, data centers, cell towers, municipalities, forklifts, cars, or buses, fuel cell technologies have a proven track record of providing clean, efficient, and reliable power, and we expect continued growth in the coming years in existing markets, as well as new ones.

UCCC invites guest bloggers to share their insights into the alternative fuel and advanced technology vehicle market. We appreciate their contributions and the opportunity to broaden the conversation with others in the community.

July Question of the Month

Question: What factors affect fuel prices?

Answer: When gasoline and diesel prices spike, we often want to blame someone for our pain at the pump. The reality is that the oil industry is a complex market. Though there are numerous factors that could ultimately influence the price of fuel, such as weather, government policies, and international relations, there are four factors that have the most significant influence. These factors include the cost of crude oil, refining costs and profits, distribution and marketing costs, and fuel taxes. Alternative fuels, such as natural gas, propane, electricity, and biofuels, can mitigate some price fluctuations attributable to short-term events, like natural disasters, because they diversify the fuel supply; however, some alternative fuel prices are also dependent on similar factors.

In May 2015, the average retail price of regular grade gasoline was $2.72, according to the Energy Information Administration (EIA). Below is a summary of the factors that affect gasoline prices, and the relative percentage of each component. We have also described how each of these factors may affect alternative fuel prices.

Crude Oil
As of May, approximately 51% of the cost of gasoline was related to the price of crude oil. The fluctuation in crude oil price is the biggest factor in the volatility of the price of gasoline, as the other costs (described blow) are relatively static.

Crude oil prices are largely a product of supply and demand. Global demand has grown in recent years due to world economic growth and increased access to vehicles, particularly in developing nations. The Organization of Petroleum Exporting Countries (OPEC), which produced about 40% of the world’s crude oil between 2000 and 2014, also has significant influence on oil prices by setting production limits among members. Part of the reason oil prices have declined significantly since July 2014 is that OPEC nations are not limiting production, resulting in a global ‘glut’ of crude oil. Much of this glut stems from a surge in oil production in the United States and Canada over the last few years from unconventional sources, like shale. This price could change dramatically, however, if there is a major global supply disruption. 

With the exception of electricity and natural gas, alternative fuel prices can also be impacted by the price of crude oil and the price and demand for petroleum products. Higher or lower demand for gasoline also influences ethanol demand, for example, and ethanol is closely linked to the price of gasoline, as shown in the Clean Cities Alternative Fuel Price Report. Biodiesel wholesale costs are largely influenced by the price of diesel. Propane costs historically tend to follow crude oil prices, though not to the same extent as other fuels, and change seasonally because of the demand for propane as heating fuel in the winter.

Alternative fuel prices are also affected by the applicable commodity price, though the impact varies by fuel. For example, the price of natural gas only comprises 20% of the compressed natural gas (CNG) price at the pump, according to the American Gas Association (AGA). Because the natural gas is a relatively small percentage of the overall fuel price, a swing in the natural gas commodity prices has less of an effect on the CNG price at the pump. In addition, natural gas costs are typically regulated and less expensive than petroleum (on a gasoline gallon equivalent, or GGE, basis) and the infrastructure is independent of oil infrastructure.

Refining Costs and Profits
Crude oil must be refined into gasoline and diesel so it is compatible with our vehicles. Refining oil takes energy and costs may vary based on the type and origin of the crude oil used in the process. In May, refinery costs and profits represented about 22% of the cost of a gallon of gasoline.

Alternative fuels, such as propane, natural gas, and biofuels, are also “refined” or otherwise altered before they can be used in vehicles. Propane is a by-product of crude oil refining and is also produced as a liquid from natural gas and oil wells. Propane from natural gas liquids does not require refining; however, it must go through a scrubbing process to remove contaminants, as well as a separation process. Natural gas is produced from natural gas and oil wells, and is also subject to a separation and treatment process to remove contaminants. It must also be compressed in order to be transported in major distribution pipelines. Biofuel production facilities are often called ‘biorefineries’ because they produce and refine crude biofuels at the same location.

Distribution and Marketing
Since many of us do not live next to oil refineries, gasoline and diesel must be transported to local fueling stations first through a sophisticated system of pipelines, trucks, or barges to a network of fuel terminals, which can also be referred to as a distribution rack. The distributors, also called jobbers, load and blend the gasoline and diesel with other products (e.g., ethanol, biodiesel) in tanker trucks, which is driven to your local retail outlets and placed in underground storage tanks. In every part of the supply chain there are costs associated with employee salaries and benefits, equipment, taxes, insurance, and other types of overhead. In May, these resulting costs equaled about 10% of the price of a gallon of gasoline.

Finally, motor fuel taxes contribute to the construction and maintenance of the roads we use on a regular basis. In the early 1900s, state governments devised ways to collect taxes on each gallon of fuel to help cover these costs and increase revenue. In May, federal, state, and local taxes accounted for 17% of the average retail price of a gallon of gasoline. Federal excise taxes are currently $0.184 per gallon of gasoline or ethanol and $0.244 per gallon of diesel or biodiesel. Propane and CNG are taxed at $0.183 per gallon of propane or GGE of CNG, and liquefied natural gas is taxed at $0.243 per gallon. The September Question of the Month will delve into this topic in more detail.

State and local fuel taxes vary widely by jurisdiction. Though motor fuel taxes are applied to each gallon of gasoline or diesel sold, alternative fuels can also be taxed on an energy equivalent basis with gasoline and/or diesel. Some states use alternatives to traditional state fuel taxes, such as annual fees for alternative fuel vehicles or taxes based on the number of miles traveled. Look for the August Question of the Month for more information on these alternatives.

Though the alternative fuel supply chain differs slightly from conventional fuels, many of the same factors influencing oil prices also impact alternative fuels. Now when you fill up your vehicle, take a moment to think about all the infrastructure and people required to process and deliver fuel from the field to the pump.

For more information on fuel prices, please refer to the following websites:
·         EIA’s Factors Affecting Gasoline Prices (
·         EIA’s Gasoline and Diesel Fuel Update (
·         Clean Cities’ Alternative Fuel Price Report (
·         U.S. Internal Revenue Service (IRS)’s Quarterly Federal Excise Tax Return, Form 720 (
·         AGA’s 2015 Playbook (

Clean Cities Technical Response Service Team