NATSO Joins Industry Group in Supporting DGE for Natural Gas

NATSO joined stakeholders representing the natural gas industry, fuel retailing groups and the trucking industry in urging the National Conference on Weights and Measures (NCWM) to support the diesel gallon equivalent (DGE) standard for liquefied and compressed natural gas sales and retain the DGE standard as a voting issue on its upcoming fall agenda.

In a letter sent to the four NCWM regional conferences, nine organizations said that their industries already embrace DGE in commercial practices and they were disappointed that the DGE standard failed to be approved at the NCWM annual meeting in July. NATSO attended that meeting and, together with the other groups signing the letter, urged the NCWM to approve the DGE standard.

Signatories included NATSO, the American Gas Association, American Public Gas Association, America’s Natural Gas Alliance, American Trucking Associations, National Association of Convenience Stores, NGVAmerica, Society of Independent Gasoline Marketers of America, and the Truck Renting and Leasing Association.

At issue before the conference is whether to sell natural gas in “gallon equivalents” or by unit of mass (such as pounds or kilograms). NATSO supports DGE standards for CNG and LNG because they would simplify consumers' purchasing decisions (by, for example, enabling them compare prices with traditional diesel fuel on an energy content basis) while simplifying retailers' tax obligations and limiting their exposure to frivolous consumer protection lawsuits. This would facilitate additional natural gas penetration into the market. Many NCWM officials have pushed for several years to mandate the sale of natural gas in mass, despite strong push back from the natural gas industry, NATSO and other fuel retailing groups.

After the NCWM failed to adopt a DGE standard in July, the proposal and was sent back to the Laws and Regulations committee for more work.

The U.S. Congress in July passed legislation that adjusts the federal motor fuels tax to ensure that LNG, when used on federal highways, will be taxed at the same rate as diesel fuel according to the energy content of each fuel product. This provision, which goes into effect Jan. 1, 2016, augments NATSO's position that federal policymakers support using DGE standards for natural gas sales.

Ten states already have enacted legislation or adopted regulations to recognize DGE as a unit of sale. Another 26 states tax LNG based upon the DGE. No state authority has proposed an alternative to using DGE for selling LNG.

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