It’s all fun and games until the IRS knocks on your door. At least that’s what Bob Teixeira must be thinking after his home state of North Carolina fined him $1,000 for converting his 1981 diesel Mercedes to run on straight-vegetable-oil (SVO). Bob was minding his own business when fuel inspectors, out to nab weekend-RVers using illegal fuel, noticed his “Powered By 100% Vegetable Oil” bumper sticker. After being fined by the state for allegedly avoiding motor fuel taxes, Bob was told he should also expect a nice fat $1,000 fine from the Feds, in addition to a $2500 bond if he wants to continue using vegetable oil in his fuel tank.

Prompted by high gas prices, global warming, and good old curiosity, more and more proud diesel owners are converting their vehicles to run on 100% vegetable oil. While the concept isn’t new, the number of dedicated users is steadily increasing, and this means more potential conflict with regulators who have no idea what to do with the vegetable oil crowd. Since vegetable oil is not recognized by the EPA as an official alternative fuel, most states have not decided how to handle the issue.

Few states. . .are prepared to regulate the new fuels, says the National VegOil Board, which promotes vegetable oil fuel.

“State offices do not have the forms to appropriately and fairly deal with VegOil, nor the staff to enforce the nonexistent forms,” said director Cynthia Shelton. “So either they tell people inquiring about compliance to get lost, or they make them jump a bunch of arbitrary hoops.”

It really comes down whether revenue collectors see using a more-or-less free fuel, vegetable oil, as blatant avoidance of paying the road tax. Unfortunately, the public typically receives mixed messages from different departments within the same state. The Department of Energy in Oregon actually offers tax credits for alternative fuel vehicles and fueling stations of 25% of the conversion or construction cost (up to $750/year). That’s what the law says, but call up the office or the Department of Revenue and you may here a different story.

Under the present circumstances it seems reasonable to promote grassroots activity focused on alternative transportation, so why doesn’t Uncle Sam just leave SVO’ers alone? Obviously, the road tax is an important source of revenue ($1.2 billion/year in NC), but it no one would argue that SVO, at least today, significantly affects that.

Is there any reason why these backyarder-greaseballs should get a free ride?

Well, ingenuity perhaps? Or doing there part to reduce our nation’s reliance on foreign oil? At a time when groundbreaking biofuel legislation passes daily, and the Department of Energy is practically throwing money at anything combining the words “cellulosic” and “ethanol”, this seems a little incongruous.

State Sen. Stan Bingham, R-Denton, is known around Raleigh for his diesel Volkswagen fueled by used soybean oil. The car sports a “Goodbye, OPEC” sign. “If somebody was going to go to this much trouble to drive around in a car that uses soybean oil, they ought to be exempt” from state taxes, he said.

If you want to find out where your state stands on the issue, call your state Department of Energy and see what they have to say about it. You might also consider offering to pay road taxes for the road miles you use each year, but don’t expect this to be a straightforward process. Also keep in mind that these taxes apply to homebrew biodiesel, though proper regulation should already be in place.

If you get busted by the man for attempting sustainable transportation, don’t say I didn’t warn you.

Interested in SVO or want to learn how a vehicle can actually be converted? - stay tuned for more posts on the subject. In the mean time, (and not that I’m trying to give anyone away to the Feds) check out Megan’s recent post on the subject.

Driver ticketed for using biofuel: Vegetable oil sticks him with $1,000 fine. Bruce Henderson, The Charlotte Observer

National VegOil Board