Natural Gas – Conversions, Vehicles and Technology

Congressmen Call For Fair Taxes On Alt Fuels

March 27, 2015

A bi-partisan group of congressmen seeking a fair excise tax on liquefied natural gas and propane introduced the Alternative Fuel Tax Parity Actwas on Thursday. Reps. Todd Young (R-IN), John Larson (D-CT), Mac Thornberry (R-TX), and Ron Kind (D-WI) jointly authored the bill.

The legislation would ensure that excise taxes on LNG and propane for highway use would be levied at a rate consistent with energy output relative to diesel and gasoline. Because natural gas and propane have lower energy output per gallon than diesel and gasoline, many have called a per gallon tax, unfair to the alternative fuel industry.

“As we see more and more alternative fuel service stations popping up around my district and the country, it’s important that we ensure inequitable tax rates don’t discourage consumers from adopting alternative fuel vehicles,” said Young. “This bill is an easy way to ensure a level playing field for this burgeoning sector of our economy.”

LNG produces 58% of the energy output per gallon as diesel fuel but is taxed at the same 24.3 cents per gallon rate. Propane has 72% of the energy output of gasoline but again is charged at the same 18.3 cents per gallon rate.

By those numbers, LNG is taxed at a rate 70% higher than diesel fuel on an energy content basis which makes the fuel type prohibitively expensive to adopt for businesses, according to the alternative fuels advocacy group NGVAmerica. The group sees this legislation as a signal that Congress is interested in removing obstacles standing in the way of further natural gas adoption.

“The introduction of this bill demonstrates continued support in the Congress for natural gas as a transportation fuel,” said Matthew Godlewski president of NGVAmerica.  “Reps. Young, Larson, Thornberry and Kind recognize the important role that clean-burning, domestic natural gas can play in improving our air and supporting American jobs at home.”


  1. 1. Dennis O. Taylor [ March 30, 2015 @ 06:38AM ]

    The "simple" answer is to tax all transport fuels by the pound (mass). Of course, that would mean changing all of the Diesel fueling stations as well. The industry already went all around that argument with the Diesel fuel temperature dispute.
    Surely there is an equitable conversion between the various fuels; especially with natural gas, which can be dispensed as liquid or as compressed gas. What about electricity for the various hybrid arrangements? How many watts/gallon (not counting conversion efficiency). Perhaps the answer is to tax the miles driven - after all, isn't the purpose of the tax to support the infrastructure? The road(s) don't care what kind of fuel is used to propel the vehicle.

  2. 2. Ralph [ March 30, 2015 @ 07:21AM ]

    FET is only one tax on fuel and the only one that CNG and Propane are required to pay an "equal" share.
    Those fuel are treated "favorably" by all other "road taxes."
    So by all means let's have "fair " treatment of ALL "road fuels"
    Including CNG, LNG, Propane, Electric, as well as Diesel and Gasoline.
    As Dennis said, "the roads don't care what type of fuel is used"


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