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WASHINGTON—US Senators Bill Cassidy, MD (R-LA), Michael Bennet (D-CO) and Todd Young (R-IN) introduced the Waterway LNG Parity Act of 2017. This bipartisan legislation would ensure that excise taxes on liquefied natural gas (LNG) for marine transportation on the inland waterways are levied at a rate consistent with their energy output relative to diesel and gasoline, respectively. On an energy equivalent basis, it takes about 1.7 gallons of LNG to provide the same amount of energy as a gallon of diesel. In other words, a user of LNG in marine transportation would have to pay 50 cents in tax for the same amount of energy contained in a gallon of diesel fuel that is only taxed at 29 cents. LNG is a cheaper, cleaner, domestic energy source and the current financing mechanism for the inland waterways system puts its use at a disadvantage. This legislation would change the inland waterways financing rate to provide equal treatment within the federal tax code.
Cassidy, Bennet and Young released the following statements:
“LNG is taxed at a 72 percent higher rate for the same amount of energy provided as diesel. That needs to change,” said Dr. Cassidy. “Establishing equal tax treatment for LNG will encourage its use and production—benefiting the economy, environment and workers of Louisiana.”
“Natural gas is a vital part of Colorado’s diverse energy industry,” Bennet said. “Colorado now ranks sixth in natural gas production in the United States. This legislation acknowledges the shift to cleaner burning fuels. Providing equal treatment to LNG for marine transportation – as we did for cars and trucks in 2015 – expands this market and encourages the use of domestically produced natural gas.”
“This is a market-based fix to ensure consumers aren’t discouraged from adopting alternative fuel vehicles. Liquid natural gas is a growing sector of our economy, and this legislation guarantees it competes on a level playing field with other forms of energy,” said Young.
To read the Waterway LNG Parity Act of 2017 legislative text, click here.
In 2015, Cassidy and Bennet introduced the Waterway LNG Parity Act of 2015 in the US Senate—(then Congressman) Young introduced a companion bill in the US House of Representatives.
The following organizations have offered statements in support of this legislation:
“NGVAmerica commends Senators Bill Cassidy, M.D. (R-LA) and Michael Bennet (D-CO) for introducing the Waterway LNG Parity Act of 2017. This common-sense, bi-partisan legislation would remove another barrier to the greater utilization of clean-burning, low-cost domestic natural gas in the transportation sector by leveling the playing field for the taxation of LNG fuel used in marine vessels operating on inland waterways in the U.S.” -Matthew Godlewski, President of NGVAmerica
“LNG has proven itself as a viable alternative fuel. It’s cleaner, more economically stable, and domestically produced. Now used across the entire transportation industry, it’s time it’s treated the same as diesel, and I encourage full support of this important, bipartisan legislation.” -Andrew J. Littlefair, President and CEO of Clean Energy Fuels Corp
“Pivotal LNG supports equalizing the tax on liquefied natural gas for inland waterway use. The excise tax for highway use was recently changed to tax LNG at the same rate as diesel. That modification made a huge difference in the trucking industry. Pivotal LNG believes that fuels should compete based on commodity cost and not be disadvantaged by an outdated tax code. The Waterway LNG Parity Act of 2017 addresses this long-standing issue in the maritime industry.” -Tim Hermann, President, Storage and Fuels, for Southern Company Gas and President, Pivotal LNG
“LNG is the cleanest marine fuel available. Equalizing the tax will allow LNG to be offered at a competitive price when compared to heavy fuel oil or HFO and even more attractive when compared to the low-Sulphur gas oil, as fuel on ships. Applied supports the Waterway LNG Parity Act of 2017.” – Ray Watkin, Vice President Business Strategy for Applied LNG.
“We welcome a correction to the tax policy which helps level the playing field for LNG’s continued use in marine applications. The International Maritime Organizations’ 2020 low sulfur rule has already helped make natural gas an increasingly viable option, and taken with this decision, it will make domestically produced LNG more attractive than ever for vessel owners.” – Charlie Riedl, Executive Director, Center for Liquefied Natural Gas. |
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