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LNG ‘Level Playing Field’ Bill Introduced

February 6, 2015 in Legislation, LNG, NGVs by Rich Piellisch  |  No Comments

Would Fix Current Tax Disparity, NGVAmerica Is ‘Encouraged’

Two U.S. senators are backing legislation to tax diesel fuel and liquefied natural gas by energy content rather than volume, ending the current tax code disparity they say puts LNG at a market disadvantage.

Senators Richard Burr of North Carolina and Michael Bennet of Colorado

Senators Richard Burr of North Carolina and Michael Bennet of Colorado

“LNG could be a better and more economical fuel choice,” Colorado Democrat Michael Bennet said in a release, “but the current tax system has built in disincentives.”

“This bill would allow LNG and diesel to compete more fairly in the market, while offering a cleaner fuel source to help keep our air clean.”

34¢ Per Mile Penalty

“This is a no-brainer,” said North Carolina Republican Richard Burr. “Our bill would eliminate a current tax disincentive… Our bill will take steps toward decreasing our dependence on imported energy sources.”

“The current tax system for LNG can result in thousands of dollars of additional cost for companies choosing to use the fuel,” states a summary. “If a diesel truck travels 100,000 miles at 5 miles per gallon it consumes 20,000 gallons of diesel fuel. However, an identical LNG truck would require 34,000 gallons of LNG to travel the same distance.

Matt Godlewski

Matt Godlewski

“The current tax system would result in the LNG truck operator paying an additional $3,402 in taxes because of the 14,000 gallons more of fuel to travel the same distance.”

‘Resolving the Federal Roadblocks’

The current excise tax rate for both LNG and diesel fuel is 24.3¢ per gallon. But it takes about 1.7 gallons of LNG to equal the energy in one gallon of diesel fuel, “resulting in LNG being taxed at 170% of the rate of diesel fuel on an energy equivalent basis.

“Taxing LNG based on energy output versus volume removes a disincentive to use the fuel.”

“We are encouraged that critical issues such as fixing the LNG/diesel tax disparity are receiving attention in the new Congress,” NGVAmerica president Matt Godlewski said in an association release.

“It is a solid signal that we’re getting close to resolving the federal roadblocks that are standing in the way of further accelerating natural gas use in the trucking sector,” Godlewski said.


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NGVAmerica (legislation), Paul Kerkhoven, 202-824-7362; [email protected]; www.ngvamerica.org


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Source: NGVAmerica with Fleets & Fuels follow-up

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