Natural Gas Laws and Incentives in Oklahoma

The list below contains summaries of all Oklahoma laws and incentives related to natural gas.

Laws and Regulations

Access to State Alternative Fueling Stations

The Oklahoma Office of Management and Enterprise Services (OMES) Fleet Management Division may construct, install, acquire, operate, and provide alternative fueling infrastructure where public access to alternative fuel infrastructure is not readily available. OMES must discontinue public access to their fueling stations if a privately owned alternative fueling station opens within a five-mile radius. Alternative fuels include natural gas, propane, ethanol, methanol, biodiesel, electricity, and hydrogen.

(Reference Oklahoma Statutes 74-78 and 74-130.2)

Alternative Fuel Technician Training

The Alternative Fuels Technician Certification Act (Act) regulates the training, testing, and certification of technicians and trainees who install, modify, repair, or renovate equipment used in alternative fueling infrastructure and in the conversion of any engine to operating on an alternative fuel. Alternative fuels include propane, natural gas, methanol, ethanol, electricity, hydrogen, biodiesel, and more. This includes original equipment manufacturer engines dedicated to operating on an alternative fuel. Electric vehicles (EVs), EV charging infrastructure, and EV technicians must also comply with the rules and regulations of this Act.

(Reference Oklahoma Statutes 40-142.1 through 40-142.16)

Alternative Fuel Vehicle (AFV) Acquisition Requirements

All school and government fleets may convert their vehicles to operate on alternative fuels, and all school districts should consider purchasing only vehicles able to operate on alternative fuels. Alternative fuels include natural gas, propane, ethanol, methanol, electricity, biodiesel, hydrogen, and more. School and government vehicles capable of operating on an alternative fuel must use the fuel whenever a fueling station is located within a five-mile radius of the respective school district or government department and the price of the alternative fuel is cost competitive with the displaced conventional fuel. If school and government vehicles must be fueled outside the five-mile radius and no fueling station is reasonably available, the school and government vehicles are exempt from this requirement.

(Reference Oklahoma Statutes 74-130.2 and 74-130.3)

Alternative Fuel Vehicle (AFV) Tax and Fee

Compressed natural gas (CNG) used in motor vehicles is subject to a state motor fuel tax of $0.13 per gasoline gallon equivalent (GGE). Liquefied natural gas (LNG) is also subject to a state motor fuel tax rate of $0.13 per diesel gallon equivalent (DGE).

In lieu of the motor fuel tax, some AFV owners are subject to a motor vehicle fee. An annual flat fee applies to passenger automobiles, pickup trucks, vans and heavy-duty vehicles using propane, natural gas, methanol, or blends of 85% methanol and 15% gasoline (M85). Propane and natural gas vehicles with a payload capacity of less than 2,000 pounds (lbs.) are taxed at a rate of $50 per vehicle per year. Methanol and M85 vehicles with a payload capacity of less than 2,000 lbs. are taxed at a rate of $100 per vehicle per year. Propane, methanol, and M85 vehicles with a payload capacity greater than 2,000 lbs. are taxed at a rate of $150 per vehicle per year. If the owner acquires the vehicle or converts it to run on the alternative fuel after July 1 of the tax year, the flat fee is half of the above-mentioned amount. AFVs must display a decal that the Oklahoma Tax Commission issues on an annual basis.

(Reference Oklahoma Statutes 68-500.4 and 68-723)

Alternative Fuels Technician Certificates

The Department of Labor (DOL) will issue a certificate to any person who has successfully passed the appropriate alternative fuels equipment, alternative fuels compression, or electric vehicle technician examination as provided in the Alternative Fuels Technician Certification Act. A certification fee applies. For companies, partnerships, or corporations involved in the business of installing, servicing, repairing, modifying, or renovating equipment used in converting or modifying engines or fueling equipment to be used with alternative fuels, DOL will issue a separate certificate. Alternative fuels include propane, natural gas, methanol, ethanol, electricity, hydrogen, biodiesel, and more.

DOL can issue an alternative fuels trainee certificate to any person who submits a trainee application within 15 business days of being hired by a licensed alternative fuels conversion or fueling station installation company.

(Reference Oklahoma Statutes 40-142.3 and 40-142.8)

Committee of Alternative Fuels Technician Examiners

The Committee of Alternative Fuels Technician Examiners (Committee) was established to assist the Commissioner of Labor on matters relating to the formulation of rules and standards to comply with the Alternative Fuels Technician Certification Act. The Committee includes experts in the natural gas, propane, and electric vehicle industries.

(Reference Oklahoma Statutes 40-142.6)

Compressed Natural Gas (CNG) Fueling Infrastructure Inspection

The Oklahoma Department of Labor may access and inspect any equipment, practices, or methods used in association with public CNG fueling infrastructure.

(Reference Oklahoma Statutes 40-142.2)

Compressed Natural Gas (CNG) Vehicle Loan Program Development

The Oklahoma Cooperative Circuit Engineering Districts Board must develop and adopt rules and processes for a no-interest loan program to allow qualified county governments to purchase or convert CNG vehicles. Counties that borrow funds must sell to a nongovernmental entity or properly dispose of a comparable number of conventional vehicles. Loan terms will be up to five years.

(Reference Oklahoma Statutes 69-687.3C)

Natural Gas Measurement

The Oklahoma Department of Labor (DOL) must standardize compressed natural gas (CNG) and liquefied natural gas (LNG) measurements for retail motor vehicle fuel, unless the National Conference on Weights and Measures has established equivalent measures. Until the DOL standardizes measurements, a gasoline gallon equivalent is equal to 5.66 pounds (lbs.) of CNG and a diesel gallon equivalent is equal to 6.06 lbs. of LNG.

(Reference Oklahoma Statutes 83-119)

Oklahoma Commercial Property Assessed Clean Energy (C-PACE) Program Authorization

Counties are authorized to establish C-PACE programs to facilitate loans between qualifying property owners and private lenders. Loans may be offered to commercial properties for projects related to alternative fuel vehicles and associated infrastructure. For more information, including eligibility requirements, see the Oklahoma C-PACE website.

(Reference Oklahoma Statutes 19-460.5)

State Incentives

Alternative Fuel School Bus and Electric Vehicle (EV) Charging Station Rebate Program

The Oklahoma Department of Environmental Quality (DEQ) offers rebates for projects that repower or replace an actively used, engine model year 2009 or older, diesel school bus with a model that operates on alternative fuel. Eligible alternative fuels and technologies include all-electric, propane, and natural gas. Applicants may receive rebates of up to 45% of project costs. Charging infrastructure for electric buses is eligible for funding, but is subject to a per-charger maximum and project cap. The program is funded by Oklahoma’s portion of the Volkswagen Environmental Mitigation Trust. Applications must be submitted through Oklahoma’s Clean Diesel Program. For more information, see the DEQ Alternative Fuel School Bus Program website.

Alternative Fuel Vehicle (AFV) Tax Credit

For tax years beginning before December 31, 2028, a one-time income tax credit is available for up to $50,000 towards the cost of purchasing a new original equipment manufactured AFV or converting a vehicle to operate on an alternative fuel. Tax credit amounts vary depending in the gross vehicle weight rating (GVWR) of the vehicle:

GVWR Maximum Amount
6,000 pounds (lbs.) or below $5,500
6,001 lbs. to 10,000 lbs. $9,000
10,001 lbs. to 26,500 lbs. $26,000
Greater than 26,501 lbs. $100,000

The state also provides a tax credit of 10% of the total vehicle cost, up to $1,500, if the incremental cost of a new AFV cannot be determined or when an AFV is resold, as long as a tax credit has not been previously taken on the vehicle. Equipment used for conversions must be new, not previously used to modify or retrofit any vehicle, meet applicable federal and state safety standards, and must be installed by a state certified alternative fuels equipment technician. Eligible alternative fuels include natural gas, propane, and hydrogen. Tax credits may be carried forward for up to five years.

(Reference Oklahoma Statutes 68-2357.22)

Alternative Fuel Vehicle and Idle Reduction Weight Exemption

A vehicle powered in whole or part by natural gas, electricity, or hydrogen may exceed the state’s gross and axle weight limits by up to 2,000 pounds (lbs.), equal to the difference between the weight of the vehicle with the natural gas tank, battery, or hydrogen fueling system and the weight of a comparable diesel tank and fueling system. The exemption is allowed on all state roads and interstate highways, as defined in Title 23 of the Code of Federal Regulations section 127(s).

Any vehicle equipped with idle reduction technology may exceed the state’s gross vehicle weight limits by up to 400 lbs. to compensate for the additional weight of the idle reduction technology. The additional weight may not exceed the actual certified weight of the idle reduction unit. Upon request, vehicle operators must provide proof or certification of the weight of the idle reduction technology and proof that the idle reduction technology is fully functional.

(Reference Oklahoma Statutes 47-14-109,47-14-109.3,and 47-14-109.4)

Alternative Fueling Infrastructure Tax Credit

For tax years beginning before December 31, 2028, a tax credit is available for up to 45% of the cost of installing commercial alternative fueling infrastructure. Eligible alternative fuels include natural gas, propane, hydrogen, and electricity. The infrastructure must be new and not previously installed or used to fuel alternative fuel vehicles. A tax credit is also available for up to 50% of the cost of installing a residential propane, compressed natural gas, or liquefied natural gas fueling system for noncommercial purposes, up to $2,500. The tax credit may be carried forward for up to five years.

(Reference Oklahoma Statutes 68-2357.22)

Utility / Private Incentives

Alternative Fuel Vehicle (AFV) and Infrastructure Grants for Public Fleets

Under the Creating Long-term Energy Alternatives Now by Advancing Improvements Regionally (CLEAN AIR) Grants program, the Association of Central Oklahoma Governments (ACOG) issues grants for alternative fuel and advanced technology vehicle projects in the Oklahoma City Area Regional Transportation Study (OCARTS) area. Projects must provide a reduction in vehicle equipment emissions and cannot increase the number of vehicles in applicant fleets. Eligible projects may also include AFV fueling stations or charging infrastructure. Eligible applicants include OCARTS-member governments, certain public trusts and public authorities providing essential services to OCARTS-member governments, member entity public transit fleets, and public-school fleets whose district boundaries are contained partially or wholly within the OCARTS area. For more information, including open solicitations, see the ACOG CLEAN AIR Grants for Public Fleets website.

Natural Gas Vehicle (NGV) and Infrastructure Rebate - Oklahoma Natural Gas

Oklahoma Natural Gas (ONG) offers rebates for the purchase or conversion of NGVs. Rebates are available for up to $5,000 for Class 1 and Class 2 vehicles and up to $10,000 for Class 3 through Class 8 vehicles. ONG also offers up to $5,000 toward the cost of a compressed natural gas (CNG) home fueling station and up to $2,500 for installation costs. Rebates are available on a first-come, first-served basis. For more information, including funding availability, see the ONG CNG Rebate Program website.

Point of Contact
Steve Plummer
Energy Efficiency Technical Consultant
Oklahoma Natural Gas
Steve.Plummer@onegas.com

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