Source: Ship and Bunker
February 4th 2015
The bill proposes taxing LNG on energy output rather than per gallon, especially as LNG creates less power per gallon than diesel.
Two American senators Tuesday announced that they are making another effort to change the way liquefied natural gas (LNG) is taxed in the country in a bid to make the fuel more economically competitive with diesel.
The reintroduced bipartisan bill brought forward by U.S. Senators Michael Bennet and Richard Burr propose that LNG be taxed on energy output rather than per gallon, as it currently is under the federal highway excise tax.
The senators said that as it stands LNG is at a disadvantage because it produces less energy per gallon than diesel, with about 1.7 gallons of LNG needed to produce the same amount of energy as one gallon of diesel.
Though shipping is not explicitly named, the taxation change would also translate favorably for shippers looking to convert to LNG‑powered vessels.
“Our bill would eliminate a current tax disincentive for using LNG, a fuel that is not only environmentally cleaner would but also reduce our dependence on foreign oil,” said Burr.
“Energy security is absolutely vital to national security, and our bill will take steps toward decreasing our dependence on imported energy sources.”
Last year Federal Maritime Commissioner William P. Doyle also said that America’s natural gas basins had enough gas to last for 100 years.