US lawmakers press Bessent on LNG ships that are taking tax credit

A group of Democratic U.S. senators on Tuesday pressed Treasury Secretary Scott Bessent on whether enormous tankers that ship liquefied natural gas qualify for a lucrative tax credit meant for smaller boats that burn the fuel.

Here are details about the issue.

* The Alternative Fuel Excise Tax credit, signed by formerPresident George W. Bush in 2005, was meant to decrease oildependence by subsidizing a transition among smaller motorboatsto alternative fuels, such as natural gas, propane and LNG. * Burning the fuel in LNG tankers does not help transitionoff liquid fuels such as bunker fuels, critics say, because manyLNG tankers are already designed to burn LNG that boils offduring shipping. That boiled-off gas otherwise would be ventedto the atmosphere or chilled back into LNG. * "Providing tankers with AFET credits would unnecessarilywaste taxpayer money while doing nothing to protect theenvironment, reduce costs for everyday Americans, or lessen theUnited States' dependence on oil," the senators said in theletter. Senators Jeff Merkley, Elizabeth Warren and ChuckSchumer and four others signed the letter. * The AFET credit was meant for motorboats, the senatorssaid, which some federal regulations define as less than 65 feetlong (20 metres) - tiny compared to LNG tankers, which canmeasure about three football fields long. * Cheniere Energy disclosed in February that it got a $370million tax break for burning the fuel in its LNG tankers.Cheniere said it had no comment. * The Treasury Department did not immediately comment. * Senate Democrats have limited power now because they arein the minority, but that could change after the Novembermidterm elections.