Evaluation of Potential Impacts of Alternative Vehicle Fuels on TxDOT Funding

This study presents an evaluation of the potential impacts on Texas Department of Transportation (TxDOT) revenues of substituting liquefied natural gas (LNG), compressed natural gas (CNG), and liquefied petroleum gas (LPG) for traditional diesel or gasoline vehicle fuels in Texas. Time series analyses are conducted for LNG, CNG, and LPG to estimate a model to forecast diesel and gasoline consumption for years 2012 to 2025. Taking into account the federal and state fuel taxes, the revenue generated from traditional fuel consumption is compared to three alternative fuel substitution scenarios. Overall, if the Federal and State excise tax rates remain at current levels the analysis suggests that substitution of LNG and LPG for traditional fuels will generate more revenue for the forecast years. However, substitution of CNG for gasoline consumption will reduce revenue if the Federal and State excise tax rates remain the same for the forecast years.