Lawmakers Propose Waterway LNG Parity Act

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Several U.S. senators have reintroduced a bill requiring that excise taxes on liquefied natural gas (LNG) for marine transportation on inland waterways be levied at a rate consistent with energy output relative to diesel and gasoline.

U.S. Sens. Bill Cassidy, R-La., Michael Bennet, D-Colo., and Todd Young, R-Ind., proposed the bipartisan Waterway LNG Parity Act on Tuesday. They explain that it takes about 1.7 gallons of LNG to provide the same amount of energy as a gallon of diesel, yet fuel usage is taxed on volume. So, LNG usage would be taxed 50 cents for the same amount of energy contained in a gallon of diesel fuel that is taxed only at 29 cents.

This legislation, however, would change the inland waterways financing rate to provide equal treatment within the federal tax code, according to the senators.

“Natural gas is a clean, domestic energy source that should be treated equally to gasoline and diesel,” says Cassidy. “We should be encouraging the use and production of LNG, benefiting the economy and workers in Louisiana.”

Young describes the bill as a “market-based fix for how we tax liquefied natural gas.”

“The bill levels the playing field for this important alternative fuel source,” he says, “which represents a growing sector of our economy.”

“Diesel fuels should not be provided better tax treatment than natural gas,” notes Bennet. “Our legislation acknowledges the shift to cleaner-burning fuels, which is an important step in moving us to a cleaner energy economy.”

Endorsing the bill is NGVAmerica, whose president, Dan Gage, says, “We applaud this extremely important legislation as we continue to promote clean fuel alternatives in our country. LNG is domestic, clean and abundant, ensuring that marine operators have decades of affordable fuel that produces near-zero sulfur oxide emissions and significantly reduces particulate matter and nitrogen oxides.”

He adds, “We hope this legislation passes through the Senate and House so we can work toward the climate goals that remain a priority in Congress and around the country.”

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Rudolf Huber
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Rudolf Huber

Fuel taxation is a joke in most countries and the reasons are historical. When gasoline and diesel were the only mass market fuels, taxing by volume (by the liter or the gallon) made sense. The energy content of a liter diesel and a liter gasoline are different but they are not worlds apart. Now that’s different. What should be important is the km (or mile) that can be driven with this, regardless of how much volume it takes. The cleanest technically and economically mature fuel is methane and its liquid embodiment LNG. The current system taxes the cleanest fuel the… Read more »