WASHINGTON, D.C. – Natural gas is among the cleanest-burning fossil fuels, but it seldom is used to move cargo across the country, a situation examined Thursday by U.S. Sen. Michael Bennet.
Bennet, D-Colo., led a hearing of the Subcommittee on Energy, Natural Resources, and Infrastructures to discuss the obstacles of alternative fuel sources such as natural gas in transportation.
“Natural gas is the cleanest of all the fossil fuels,” said Sen. Ron Wyden, D-Ore..
Bennet sought to boost the market for natural gas as a fuel for long-haul trucking by seeking rational incentives for its use.
“Specifically, we can level the playing field on fuel taxes so natural gas isn’t taxed at a higher rate than diesel,” Bennet said.
In 2013, Bennet and Sen. Richard Burr, R-N.C., co-sponsored a bill to equalize the tax of using liquefied natural gas, or LNG, with diesel.
Currently, both fuels are hit with a federal tax by volume, of 24.3 cents per gallon, a figure that adds up for long-haul trucking.
However, liquefied natural gas gives off less than 60 percent of the energy of diesel. Because more natural gas needs to be purchased to match the same energy output from diesel the tax discourages use of clean burning natural gas.
Bennet and Burr’s bill sought to tax liquefied natural gas and diesel based on its energy equivalence, not on its volume, a change that would equalize the taxes on the fuels.
However, the tax adjustment, which had passed the Senate, was stripped in the House of Representatives.
Mike Whitlatch, senior director of global energy and procurement with UPS, said equalizing taxes between the two fuels would lead his company to use more trucks powered by LNG.
“The extra tax burden on LNG fuel is a bigger impediment to our buying LNG trucks than the extra initial cost of the LNG truck, over a conventional diesel truck,” Whitlatch said.
One benefit of using more natural gas would be the creation of jobs. According to the U.S. Energy Information Administration, Colorado ranks sixth nationally in natural-gas production.
The Ignacio Gas Plant can store almost 40,000 barrels of liquefied natural gas. The plant’s proximity to the Rocky Mountain LNG pipeline cutting across Montezuma County makes it essential as the largest capacity for storage of the fuel in Southwest Colorado.
Beyond tax treatment, other hurdles exist.
For instance, Natural Gas Vehicles for America reports a gap between natural-gas stations and regular retail stations: for every LNG retail station there are 16,800 operating gas stations in the country.
“The lack of a national network of natural-gas stations is the leading obstacle facing natural gas long-haul trucking,” said Robert Carrick, natural gas sales manager of Daimler Trucks North America.
The closest retail natural-gas stations to Durango are in Grand Junction and Moab, Utah.
igheorghiu@durangoherald.com. Iulia Gheorghiu is a student at American University in Washington, D.C., and an intern for The Durango Herald.
