Breitling Oil and Gas Morning Podcast #123 August 2nd, 2012

Proponents of natural gas vehicles (NGVs) told a US Senate committee that they’re seeking equal, not special, treatment under federal law. NGVs provide comparable environmental and energy security benefits as their electric counterparts and deserve similar federal support.

Two federal tax code changes could remove barriers for the NGV market to grow. Each gallon of LNG sold incurs an effective tax rate of double that of diesel because LNG has a lower energy density, but the tax is applied on a gallon basis.  The discrepancy has been removed for the sale of compressed natural gas, but not for LNG where it provides unfair discrimination for long haul truckers.

Heavy duty trucks, which run on Natgas, cost $30,000-60,000 more than diesel models and with the additional excise tax it may put it out of reach of most buyers.

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