Senators reintroduce LNG fair tax bill

US Senators Michael Bennet and Richard Burr have reintroduced a bill to put LNG on equal footing with diesel fuel under the federal highway excise tax.

The legislation will allow LNG to compete fairly with diesel by taxing LNG on energy output, rather than per gallon.

Market competition

Commenting on the potential impact of the bill, Bennet said: “LNG could be a better and more economical fuel choice for Colorado’s business owners, but the current tax system has built in disincentives that may prevent them from using it. 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.”

Burr added: “This is a no-brainer. Our bill would eliminate a current tax disincentive for using LNG, a fuel that is not only environmentally cleaner but would also reduce our dependence on foreign oil. Energy security is absolutely vital to national security, and our bill will take steps toward decreasing our dependence on imported energy sources.”

Costly fuel tax

The current tax system can result in considerable additional costs for companies choosing to use LNG. For example, 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. The current tax system would result in the LNG truck operator paying an additional US$3402 in taxes.

A recent study commissioned by the Small Business and Entrepreneurship Council shows that increased international demand for LNG has had a positive impact on the nation's economy, particularly in Colorado.

Adapted from press release by Katie Woodward

Read the article online at: https://www.lngindustry.com/small-scale-lng/04022015/bill-to-create-level-playing-field-for-lng-fuel-177/