House Bill on Tax Breaks for Natural Gas Gains Supporters for Senate Version

Truckers who purchase vehicles powered by natural gas could reap federal tax credits of up to $64,000 a truck under a bill already introduced in the U.S. House of Representatives and expected to be introduced soon in the Senate.

The measure also would provide as much as $100,000 in tax breaks for building natural gas fueling stations and millions more in tax breaks to the manufacturers of natural gas vehicles.

The bill, dubbed the New Alternative Transportation to Give Americas Solutions Act of 2011, was introduced in April in the U.S. House of Representatives by Rep. John Sullivan (R-Okla.), a member of the House Energy and Commerce Committee and vice chairman of the subcommittee on energy and power.

A hearing was held in September in the House Ways and Means Committee, but the bill has yet to be voted out of there.

The Senate version is to be introduced this month by Sen. Robert Menendez (D-N.J.), said Menendez spokeswoman Tricia Enright.

“This bill’s very important for a lot of reasons; it’s going to revolutionize the trucking industry for one,” Sullivan said, stressing his belief that natural gas would significantly lower trucking’s fuel costs.

“Fuel and drivers are the biggest cost drivers in the trucking industry,” said Sullivan, who worked in trucking in Oklahoma before entering politics.

According to the U.S. Department of Energy’s October price report on alternative fuels, between Sept. 30 and Oct. 14. the average gallon of diesel sold for $3.81 a gallon, while the average energy equivalent unit of compressed natural gas sold for $2.33.

Natural gas is also a national security issue, Sullivan told Transport Topics in a recent interview.

“We’re sending over a billion dollars every single day to foreign countries; we’re subsidizing foreign nations; we’re subsidizing foreign economies and, in some instances, funding . . . the war on terror against ourselves,” he said.

In addition to Sullivan, primary sponsors of the bill in the House are Rep. John Larson (D-Conn.), Rep. Kevin Brady (R-Texas), and Rep. Dan Boren (D-Okla.).

“It has 182 bipartisan co-sponsors, which, I dare say, there’s no bill in Congress that has that many,” Sullivan said.

He also said President Obama told him during a White House meeting this summer that, if the bill reaches his desk, he would sign it.

Although natural gas is a less expensive fuel than diesel, natural gas trucks are more expensive to buy than diesel-powered trucks; hence, the tax credit of up to $64,000 per truck is to offset the cost differential, Sullivan said.

American Trucking Associations supports Sullivan’s approach.

“The promise of an abundant, less expensive and clean fuel such as natural gas has a growing appeal for the trucking industry,” said ATA spokesman Sean McNally. “Yet, purchasing the costly equipment is difficult for most trucking companies.”

For that reason, ATA welcomes a proposal that would expand the fueling infrastructure and make heavy-duty natural gas vehicles more affordable, McNally said.

This is the third time Sullivan has tried to get a natural gas trucking bill through the House. His first two bills mandated some purchases of natural gas vehicles and contained tax subsidies that would have lasted 18 years.

This latest attempt makes natural gas vehicle purchases voluntary and would reduce to five years the life of the tax credits. “Just in and out, just to stimulate getting the infrastructure built, just to get this going,” Sullivan said.

One of the biggest problems facing truckers or anyone else looking to switch from diesel and gasoline to natural gas is the lack of fueling stations (9-6-10, p. 1).

Sullivan said that the lack of infrastructure support for natural gas vehicles is one reason the United States has only 133,000 natural gas vehicles versus about 13 million vehicles elsewhere around the world in Europe, Asia and Latin America.

“If someone said today, ‘Boy I think it’s great to get natural gas. It’s cheap. I want a truck that runs on natural gas and we’re going to save money,’ well, you would but you wouldn’t have a place to fill up,” Sullivan said.

Today, many of the natural gas vehicles being used in the United States are public buses because they return to municipal or country depots each night where they are refueled, he said.

By Sullivan’s estimate, the infrastructure and manufacturing stimulus he is proposing for the natural gas industry would create as many as 500,000 jobs across the country. And, he added, the nation has as much as 120 years’ worth of natural gas reserves yet untapped.