Sens. Michael Bennett (D-CO) and Richard Burr (R-NC) introduced bipartisan legislation last month that natural-gas industry advocate NGVAmerca said would more equitably tax liquefied natural gas, or LNG, as a transportation fuel.
The bill changes the LNG tax from volume or gallon based to an energy-based rate that is equivalent to diesel. The current federal highway excise tax is 24.3 cents for both LNG and diesel, but NGVAmerica said that that it takes about 1.7 gallons of LNG to equal one gallon of diesel. As a result, NGVAmerica added that LNG unfairly is taxed a 70-percent higher rate than diesel.
“We commend Senators Bennet and Burr for this common-sense measure,” said NGVAmerica President Richard Kolodziej. “Removing this tax penalty will accelerate the use of LNG in our nation’s trucking fleet and help reduce America’s reliance on foreign oil.”
While technically available to the school bus industry, LNG is most commonly used in heavy-duty truck applications. Brian Sheehan, a spokesman for NGVAmerica said the technology is more expensive and more suited for longer-range driving.
“Due to the nature of typical school bus routes (less distance requirements and a return-to base routine), CNG is appropriate due to much less costs,” he added.
NGVAmerica saida diesel truck traveling 100,000 miles per year at 5 miles per gallon would consume 20,000 gallons of diesel fuel. But an identical LNG truck would require 34,000 gallons of LNG to travel the same distance.
“While the LNG truck uses a cleaner form of fuel, it would pay an additional $3,402 per year in taxes for using LNG,” the organization said in a statement.
