NGVAmerica Applauds House for LNG Fix in Highway Legislation

 July 15, 2015

Washington, D.C. — NGVAmerica applauds the U.S. House of Representatives passage of H.R. 3038, legislation to fund and extend the authorization for America’s highway and transit programs through the end of 2015. The proposed legislation corrects a longstanding inequity in the way liquefied natural gas (LNG) is taxed that has the potential to further expand the use of clean-burning domestic natural gas in truck fleets across the nation.

The legislation specifies that LNG be taxed per diesel gallon equivalent (DGE), and defines a DGE to be 6.06 pounds of LNG. This change places LNG on parity with diesel fuel by taxing the fuels equally based on energy content, rather than volume. Currently, LNG is effectively taxed at a rate that is 70 percent higher than that of diesel, which creates an unfair penalty on those using domestically produced LNG in their trucking fleets.

“We commend the House of Representatives for including this common-sense fix that further strengthens the economic value proposition of natural gas as a transportation fuel,” said NGVAmerica President Matthew Godlewski. “This is great news for current and prospective LNG fleet operators who will see even greater savings on their fuel costs should this fix become law.”

The authorization for federal transportation funding expires at the end of July, which necessitates the passage of an extension by the Congress.  The Senate must still consider H.R. 3038 or their own transportation funding legislation. The Senate has previously voted to fix the LNG tax inequity as recently as 2014.