Lawmakers weigh in on debate about natural gas labels

HOUSTON — Advocates of compressed natural gas promote it as  as a cheaper alternative to gasoline.

Filling up with CNG costs around $2.15 per gasoline gallon equivalent, according to the latest estimates from the U.S. Department of Energy. It’s easy to see the savings.

But what if prices were listed differently? Would 38 cents for a pound of CNG be a good deal? 

Most people would need a calculator and some research to answer that question. And that’s the heart of a debate about how alternative fuels should be measured and priced.

The topic may seem esoteric.

But it’s a big enough deal that an association of state regulators will put it to a vote next week in Detroit.

And it’s contentious enough that  the natural gas industry and some lawmakers are weighing in loudly.

The National Conference on Weights and Measures comprises  state government offices  tasked with ensuring that consumers get a gallon of gasoline when they pay for one.

Typically, state inspectors visit gas stations with a container known to hold a gallon. They dispense what the pump registers as a gallon  and make sure it fills the container all the way.

The problem: natural gas fuel can’t be poured into a can and generally is measured in terms of mass. That complicates things because consumers think of fuel in terms of gallons.

Twenty years ago, the conference came up with a sort of workaround and decided that, based on its energy content,  a gallon of gasoline is comparable to about 5.66 pounds of compressed natural gas. That made it easy for gas stations to advertise alternative fuel costs in terms familiar to consumers.

They know how to compare $2.15 with the cost of a gallon of gasoline. Compressed natural gas at 38 cents a pound calculates to the same price, but it’s not a formula most people carry in their heads.

The topic is emerging now because compressed natural gas and another form of the fuel, liquefied natural gas, are being adopted more widely as motor fuels since a production surge has made U.S. natural gas relatively cheap.

That has  prompted the commission to reexamine the approach to pricing both types of natural gas fuels.

While natural gas retailers prefer pricing their fuel relative to gasoline or diesel, some members of the conference have argued pricing it by mass — either in pounds or kilograms — would be more transparent and precise.

Lawmakers and natural gas industry officials argue such a system would confuse consumers and stall the momentum of the natural gas vehicle industry, which benefits from the easy-to-see savings when prices are listed relative to gasoline and diesel gallons. “Not having it will slow down conversion to natural gas,” said Richard Kolodziej, president of Natural Gas Vehicles for America, a trade association for the natural gas fuel industry.

In May, more than 50 members of Congress signed a letter to U.S. Secretary of Commerce Penny Prizker urging her to support a plan that would allow retailers to dispense CNG and LNG by gasoline and diesel gallon equivalents.  On Thursday, a group of senators followed up with their own letter.

They expressed concerns that the National Institute of Standards and Technology — an agency of the Commerce Department that works closely with National Conference on Weights and Measures — would oppose the status quo and support pricing by mass.

“Requiring LNG to be sold by the kilogram will confuse consumers and stall the growing momentum behind natural gas as a transportation fuel,”  said Kathryn Clay, vice president for policy strategy at the American Gas Association, in a statement.

Natural gas industry officials fear that as the commission decides how LNG should be listed, the decision could be applied to CNG as well.

Earlier this year, a steering committee of the National Conference on Weights and Measures recommended selling on the basis of gasoline or diesel equivalents. But the topic was hotly debated by the that committee, causing stakeholders to worry that the vote won’t be an easy one to win. They also worry the commission could vote to approve the standard they oppose.

Those who want a change from the status quo say it’s not really even possible to make accurate comparisons between gasoline and natural gas, and pricing by mass would be a better way to verify customers get exactly what they pay for.

“We’re trying to raise these points that should be further examined and developed,” said Tina Butcher, supervisory physical scientist at National Institute of Standards and Technology.

The commission will vote whether to officially declare a gallon of gasoline as comparable to 5.66 pounds of CNG and a diesel gallon the equivalent to 6.06 pounds of LNG.

But Butcher said there is some debate about those types of numbers, and even if a standard was settled on,  it wouldn’t be perfect, because the contents of the fuels can fluctuate slightly.

She also downplayed the importance of having a way to compare prices between natural gas and conventional fuels. Those comparisons are useful when making the determination to buy an alternative fuel vehicle, she said, but they’re not as important once a natural gas vehicle has been purchased and it’s time to fill it up.

NIST is suggesting a hybrid approach that requires natural gas be measured and sold by mass but allows retailers to also provide supplemental information about its gasoline or diesel equivalency.

The system would be similar to how laundry detergent is sold and marketed, she said. A bottle of detergent can be labeled as “16 loads,” but since loads aren’t a perfect unit of measure, it also lists how many ounces of liquid are inside.