NATURAL GAS FOR CARS AND TRUCKS: OPTIONS AND CHALLENGES - Natural Gas-powered Cars and Trucks: Options and Issues - page 21

Bridge to a Clean Energy Act of 2014, but it has not been acted on by the Ways
and Means Committee.
S. 1486, the Postal Reform Act of 2014, among other provisions, would
require the postmaster general to submit a report to Congress on the feasibility
of a pilot program to use natural gas and propane in U.S. Postal Service long-
haul trucks. The bill was reported from the Senate Homeland Security and
Governmental Affairs on July 31, 2014.
Several bills have been introduced 104 to change the Motor Fuels Excise
Tax so that LNG would be taxed on an energy-equivalent basis instead of a
volume basis. As 1.7 gallons of LNG equates to one gallon of diesel on an
energy-equivalent basis, transportation users of LNG pay more tax than users
of an equal amount of energy from diesel. The federal excise tax on CNG is
already assessed on an energy content basis. The Senate Finance Committee
included this tax change in the Preserving America's Transit and Highways
Act (PATH Act), but the Senate adopted the House Highway and
Transportation and Funding Act (H.R. 5021), which did not include the LNG
tax provision. 105

Tax Policy

In the recent past, federal tax policy has supported the production and sale
of alternative fuels and vehicles, including those powered by natural gas
( Table 1 ). However, many of those provisions have expired. 106

Table 1. Tax Provisions Affecting Natural Gas Vehicles
Existing and Recently Expired Provisions

Existing Provisions

P rogram Description Expiration Date Eligible Fuels

Motor Fuels
Excise Tax

Gasoline: 18.4 cents per
gallon Diesel: 24.4 cents
per gallon LPG: 18.3 cents
per gallon CNG: 18.3 cents
per gallon equivalent LNG:
24.3 cents per gallon

4.3 cents per gallon of
the gasoline/diesel fuel
tax is permanent; the rest
expires on September
30, 2016.

Gasoline, diesel,
LPG, LNG,
CNG, fuels with
methanol from
natural gas.

Plug-In Electric
Drive Vehicle
Credit

Credit of up to $7,500 for
purchasers of these
vehicles, depending on
battery capacity.

Credit is phased out
when automaker sells
200,000 qualified
vehicles.

Plug-in electric
vehicles.