Gas Parity Bill Introduced in USA

| USA: Washington DC

Logo-USA_NGVAmericaIn March this year, Daniel Gage, President of NGVAmerica, went to Washington to argue for parity for natural gas compared to other emerging fuel-related technologies. Gage and his team have subsequently applauded legislation (H.R. 5959) introduced last week by U.S. Representatives Markwayne Mullin (R-OK) and John Larson (D-CT) intended to expand the use of clean alternative transportation fuels and bring parity to natural gas alternative fueled vehicles. 

Gage testified before the U.S. House Ways and Means Tax Policy Subcommittee in March, detailing how a 5-year extension for 2018 – 2022 of the Alternative Fuel Tax Credit would offset the cost of new, cleaner-burning trucks and accelerate the investment payback for consumers and businesses. He argued this would provide some partial parity with other emerging technologies and encourage natural gas usage and new research and development.  H.R. 5959 addresses these issues.

Upon adoption, the Natural Gas Parity Act of 2018, H.R. 5959, would ensure fair treatment in the tax code, federal acquisition policy, and research and development funding for vehicles and other transportation uses fueled by natural gas and related alternative sources.

“Current federal incentives and regulatory rules do not encourage the use of super clean and efficient natural gas for transportation,” Gage said. “With the introduction of this legislation, Representatives Mullin and Larson recognize that the world’s cleanest heavy-duty engines run on natural gas.  And as the movement of goods and freight continues to dominate our economy, if we want cleaner air, we need cleaner trucks, cleaner locomotives, and cleaner ships.  Natural gas technology is proven, domestic, and commercially ready-right-now for every major freight and passenger transit application.”

Existing programs do not provide sufficient incentive for manufacturers to produce natural gas vehicles nor do they fully account for all the environmental benefits of natural gas in transportation; today, federal incentives mostly favor electric drivetrains.

The Mullin/Larson Bill would:

  • Extend the expired Alternative Fuels Tax Credit (AFTC) of $.50 per gallon equivalent through 2022, providing greater certainty for businesses, municipalities, and fleet managers interested in investing in alternative fuel transportation options;
  • Encourage investment in new natural gas technologies by providing a partial exclusion from the federal excise tax imposed on heavy-duty natural gas truck purchases, effectively exempting the technology’s incremental cost from the existing 12 percent rate;
  • Bring parity to the purchase of natural gas motor vehicles on par with the Federal government’s $7,500 tax credit for the purchase of new light-duty electric vehicles and include a new tax credit for medium and heavy-duty natural gas trucks;
  • Promote the continued development of natural gas refueling infrastructure through the extension and increase of the Alternative Fuel Vehicle Refueling Infrastructure Tax Credit;
  • Encourage the use of more clean-fueling Liquified Natural Gas (LNG) marine and shipping applications on inland waterways;
  • Support the transitioning of federal fleets to alternative fuels like natural gas; and
  • Invest in new domestic natural gas R&D activities and Clean Cities program initiatives, supporting local clean air and climate change community efforts across the country.

NGVAmerica explains that currently, the federal government incentivizes electric vehicle deployment but does not also incentivize abundant, domestic, clean transportation options fueled by natural gas. Ensuring natural gas competes on an even playing field enables American energy and American manufacturing to provide cleaner air and grow our economy.

The cleanest heavy-duty engine in the world is American-made and powered by natural gas. Pair this technology with renewable natural gas—derived from agriculture, food, and landfill waste as well as wastewater systems—and even greater CO2 and GHG emissions reductions are achieved. With renewable natural gas, fuel can be carbon neutral or even carbon negative.

“We can wait and wait for possible electric and fuel cell options to be developed, commercialized for heavy-duty applications years from now and live with our transportation sector’s current negative air quality impact until then,” added Gage.  “Or we can accelerate the transition to domestically-fueled natural gas vehicles today and begin to immediately enjoy clean air benefits.”

Congressman Mullin says, “Under current laws and regulations, alternative fuel sources enjoy federal subsidies that cut down on production costs while clean, natural gas shoulders a greater financial burden.  The federal government should not be picking winners and losers in the energy industry, but instead should allow consumers and accessibility to drive demand.  The Natural Gas Parity Act levels the playing field for natural gas and gives the consumer the power to choose a cheap and efficient fuel source that suits their lifestyle.”

Congressman Larson agrees, saying H.R. 5959 aims to incentivise uptake of this cleaner fuel while decreasing dependence on foreign fuel imports. “This will reduce pollution, spur investment in alternative fuel sources, and bolster our national security by enhancing energy independence,” he said.

NGVAmerica member Clean Energy Fuels Corp also welcomed the Bill with enthusiasm: “There has never been a better time for Congress to support the adoption of natural gas vehicles (NGVs) as a proven transportation model, one that has already been successfully adopted by municipalities across the U.S.,” said Andrew J. Littlefair, president and CEO of Clean Energy Fuels Corp.  “Whether transferring goods, transporting passengers, picking up trash, or shuttling airport passengers, natural gas vehicles are helping to move America with a cleaner fuel.  It’s important that Congress provide incentives for the utilization of domestically-available energy sources—including the use of natural gas in Federal government fleets—and provide funding for natural gas research to accelerate the advancement of natural gas engines and vehicles.”

Sources: Congressmen Mullin and Larson, NGVAmerica, Clean Energy Fuels Corp.

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