Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Three Suggestions From Westport CEO At U.S. Senate Hearing On May 14, 2013

|Includes: CLNE, Westport Fuel Systems, Inc. (WPRT)

The U.S. Senate Committee on Energy and Natural Resources had a roundtable discussion on natural gas and transportation on May 14, 2013: some suggestions previously suggested by others and reiterated by Westport's CEO stood out as practical and likely to be considered as alternatives or as supplement to subsidizing class 8 trucking purchases:

The first disincentive relates to how liquefied natural gas is taxed. Specifically, LNG is taxed under the federal excise tax system at a rate that is 70% higher than diesel fuel on an energy equivalent basis. This means a trucker using LNG pays several thousand dollars more, every year, in fuel tax. This should be corrected.

Second, heavy duty trucks are subject to 12% federal excise tax and the additional cost of a natural gas truck is subject to this tax. Truckers that buy a natural gas truck pay anywhere from $4,000 to over $10,000 more excise tax than they would if they bought a diesel truck. We believe waiving or offsetting this additional tax would remove a significant disincentive to buying a natural gas fueled vehicle.

Third, natural gas fuel tanks weigh more than diesel tanks. This weight reduces the amount of paying cargo that a trucker can carry under their weight limits, meaning they get less revenue per trip than a diesel truck. Providing a modest allowance for the additional weight of natural gas fuel tanks would eliminate this disincentive. In fact, the State of Ohio recently passed just such a measure.

Disclosure: I am long WPRT, CLNE.