Hearing Emphasized Need to Reauthorize Alternative Fuel Tax Credits
Washington, DC -- Colorado U.S. Senator Michael Bennet today held a hearing of the Senate Finance Subcommittee on Energy, Natural Resources, and Infrastructure to highlight the benefits of natural gas as a transportation fuel and to explore how the tax code can spur increased use of natural gas in the sector.
Bennet also used the hearing to emphasize the need to reauthorize expired alternative fuel tax credits and the importance of passing his bipartisan LNG parity bill. This legislation will allow liquefied natural gas (LNG) to compete fairly with diesel fuel by requiring that LNG be taxed based on its energy content rather than strictly on a per gallon basis.
"Our country has undergone a dramatic change in our domestic energy picture over the last decade. Thanks to new innovations in drilling, our domestic production of natural gas has quadrupled," Bennet said. "And Colorado has led the way in demonstrating we can produce natural gas safely and in a way that protects drinking water, air quality, and adjacent communities."
"Now we have a huge opportunity to grow this market and increase the use of natural gas as a transportation fuel. Specifically, we can level the playing field on fuel taxes so natural gas isn't taxed at a higher rate than diesel," Bennet added. "Senators Burr and Hatch worked with me on a bill to do just that that passed this committee. Passing this bill, along with other needed energy legislation, will demonstrate that Congress understands the growing natural gas vehicle industry and its positive effect on our economy, national security, and our environment."
"NGVAmerica commends Senator Bennet and his efforts to accelerate the use of natural gas vehicles," said Matthew Godlewski, President of NGVAmerica. "The Congress has long recognized the importance of fuel diversity in the American economy and has sought to encourage this diversity through tax policy. The U.S. now leads the world in natural gas production but ranks only fifteenth in total NGVs in operation. Senator Bennet's efforts will help reduce our reliance on imported oil, lead to fewer tailpipe emissions, and create American jobs."
"We commend the Senators for their dogged determination in resolving this inequity," said Lem Smith, Director of Federal and State Relations at Encana Corporation. "Natural gas provides great promise for U.S. Energy independence and its versatility relative to use as a transportation fuel increases this opportunity for Colorado and our Nation, and a permanent fix to this problem is an issue of parity."
The current tax system can result in thousands of dollars of additional cost for companies choosing to utilize 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 study commissioned by the Small Business and Entrepreneurship Council shows that increased international demand for LNG positively affects 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.
The full hearing can be viewed here.