LNG Taxes to Fall in Proposed Legislation

Within the Highway Trust Fund legislation passed by both Houses of the U.S. Congress this week and expected to be signed by President Obama, is a provision to equalize the federal tax on liquefied natural gas (LNG) to an energy-equivalent basis with diesel and gasoline. The result will lower the tax on LNG by 14.1 cents per gallon. Twenty-six State Legislatures have already taken similar action. Natural gas fuel costs up to $1.00 less than gasoline or diesel, depending on local market conditions, and also reduces greenhouse gas emissions up to 30% in light-duty vehicles and 23% in medium to heavy-duty vehicles. In addition, nearly all natural gas consumed in North America is produced domestically.