The U.S. Senate passed a provision introduced by Sens. Richard Burr (R-NC) and Michael Bennet (D-CO) on Thursday that modifies the federal excise tax on liquefied natural gas (LNG) and propane.
The measure will make changes to the tax calculations on these fuels, allowing natural gas to compete on a level playing field with diesel. Under the provision, LNG and propane will be taxed on an energy output basis, rather than the existing per-gallon method. Currently, American consumers are paying up to 70 percent more in taxes to fill their gas tanks with natural gas instead of diesel fuel.
“As we continue to develop alternative fuels, it’s critical that the federal government stays away from picking winners and losers and encourages consumers to use the products that best suit their needs,” Burr said. “America is fortunate that our energy markets have diversified in the last few years, and in order to foster more innovation, this legislation is sorely needed so that we’re not unfairly punishing consumers with higher taxes for choosing cleaner fuels.”
The provision was included as part of the three-month extension of federal highway funding,
“Natural gas is a growing part of Colorado’s diverse energy industry, and this bill recognizes the ongoing shift to alternative transportation technologies and fuels,” Bennet said. “Providing parity to LNG creates an opportunity to help grow this market and encourages the use of natural gas as a transportation fuel.”