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U.S. Senate Subcommittee Hearing to Examine NGV Incentives

Industry representatives from the natural gas vehicle (NGV) sector are slated to push for extension of tax incentives for NGVs at a U.S. Senate Finance subcommittee hearing in Washington, DC, Wednesday.

Congress failed last month to come up with an agreement on a tax incentive extension bill.

NGV advocates from both vehicle and fueling perspectives are scheduled to testify at a hearing of the Senate Finance Subcommittee on Energy, Natural Resources and Infrastructure, chaired by Sen. Michael Bennet (D-CO), offering arguments for NGVs' contributions to job creation, energy security and environmental benefits.

Among the industry representatives scheduled to appear are Robert Carrick, Daimler Trucks North America's NGV sales manager; Mike Whitlatch, senior director for global energy and procurement at Atlanta-based UPS; Joseph Calabrese, CEO at the Greater Cleveland (OH) Regional Transit Authority; Ronald Jibson, CEO at Salt Lake City-based Questar; Rich Kassel, senior vice president at environmental communications firm Gladstein, Neandross & Associates; and Harrison Clay, president of California-based Clean Energy Renewable Fuels.

Several of the representatives joined Natural Gas Vehicles for America and the American Gas Association in writing to the Senate Finance Committee leadership in November urging Congress to extend NGV tax incentives and include liquefied natural gas (LNG) used in transportation.

They cited the importance Congress has placed in the past on fuel diversity as an economic, national security and environmental benefit to the nation. The NGV leaders have long urged a level playing field for natural gas use in transportation (see Daily GPI, Feb. 14, 2012).

Dating back to the Energy Policy Act of 2005, the NGV sector has received a 30% income tax credit for the cost of new NGV fueling equipment up to $30,000 of a fleet fueling facility and $1,000 for home refueling appliances. There was also a 50-cent credit/gasoline gallon equivalent on the sale of natural gas as a transportation fuel. Advocates are urging for similar incentives for LNG in the form of a fix of excise tax laws relative to diesel fuel.

"Because LNG has less energy/gallon than diesel fuel, on an energy equivalent basis LNG effectively pays 170% of the diesel rate," the industry advocates said in their letter to the Senate Finance Committee.

The industry is also looking to have LNG get a credit based on an energy content of a diesel gallon instead of a per-gallon basis. "Correcting both the LNG excise tax treatment and the excise tax credit treatment at the same time creates policy consistency and would restore the competitive balance between LNG, compressed natural gas and diesel as transportation fuels," the industry said in its Senate letter.

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