Finance Committee Approves Bennet LNG Tax Parity Amendment

Bipartisan Measure Puts LNG on Equal Footing with Diesel Fuel

Washington, DC - The Senate Finance Committee today approved a bipartisan measure authored by U.S. Senators Michael Bennet (D-CO) and Richard Burr (R-NC) to put liquefied natural gas (LNG) on equal footing with diesel fuel under the federal highway excise tax. The measure would allow LNG to compete fairly with diesel by taxing LNG on energy output rather than per gallon. The proposal was included in a tax extenders bill that was approved by the committee in a 23-3 vote.

"Our domestic energy markets have undergone a major shift with the development of new energy technologies and sources," Bennet said. "LNG is becoming a larger part of Colorado's diverse energy industry, and we have an opportunity to help grow this market and increase the use of natural gas as a transportation fuel. This bill will help us embrace that momentum and encourage the use of this domestic, cleaner burning fuel."

The current tax system can result in thousands of dollars of additional cost 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 paying an additional $3,402 in taxes because of the 14,000 gallons more of fuel.

A 2013 study commissioned by the Small Business and Entrepreneurship Council shows that increased international demand for LNG has had a positive effect on the nation's economy, particularly in Colorado. Colorado's natural gas production has risen by almost 45 percent resulting in large numbers of job growth particularly for small and midsize businesses in the state.

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