On November 15, a bipartisan group of legislators — U.S. Senator Robert Menendez (D-NJ), Majority Leader Harry Reid (D-NV), and Senator Richard Burr (R-NC) — introduced a bill that would provide incentives to U.S. manufacturers for producing or retrofitting natural gas-powered vehicles (NGVs), as well as for building natural gas refueling infrastructure.
The New Alternative Transportation to Give Americans Solutions (NAT GAS) Act of 2011, also would expand tax credits to consumers of dedicated natural gas vehicles and certain bi-fuel and dual-fuel alternative natural gas vehicles to help offset incremental cost; subject to caps, depending on vehicle size. It would be fully paid for by a temporary user fee at the natural gas pump.
The legislation has been hailed by clean energy advocates — chief among them, financier and business magnate T. Boone Pickens — and has been disparaged by conservatives, including the billionaire brothers, David and Charles Koch.
A House version of the bill (H.R. 1380), introduced earlier this year by Reps. John Sullivan (R-OK), and Dan Boren (D-OK), has broad support, with 181 co-sponsors, but leaders there have not indicated when they might move it to the floor.
Advocates say that passage of the NAT GAS bill would decrease America’s reliance on fossil fuels, diminish greenhouse gases, and increase use of a secure North American energy source — with 90 percent of the natural gas consumed produced within the United States and Canada. In fact, according to the report, “Fueling North America’s Energy Future The Unconventional Natural Gas Revolution and the Carbon Agenda,” released last year by Massachusetts-based IHS (News - Alert) Cambridge Energy Research Associates, North American natural gas resources have increased by more than 1,800 trillion cubic feet (Tcf) over the past three years, bringing the total natural gas resource base to more than 3,000 Tcf, a level that could supply current consumption for well over 100 years.
Currently priced up to $1.50 or more per gallon less than diesel or gasoline (depending upon local markets), natural gas fuel also would reduce costs significantly for vehicle and fleet owners — even as it reduces greenhouse gas emissions by as much as 30 percent in light-duty vehicles and 23 percent in medium- to heavy-duty vehicles.
Extra jobs must also be factored into the bill’s probable results. Majority Leader Reid commented, "We cannot afford to continue spending hundreds of billions of dollars a year to buy oil from foreign countries, many of which are unfriendly to the United States," said Reid, D-Nevada. "This bill will create over one million jobs by accelerating the development of clean alternative vehicles and fuels here at home and make our nation more secure."
Pickens' advocacy of natural gas fueling campaign is well-established. He formed Pickens Fuel Corp. in 1997 and began touting natural gas as a domestic resource that, among many advantages, is cleaner-burning (NGVs emit up to 30 percent less pollution than gasoline or diesel vehicles) and reduces foreign oil consumption. Reincorporated as Clean Energy Fuels Corp. in 2001, the company now owns and operates natural gas fueling stations from British Columbia to the Mexican border. In 2008, Pickens launched the Pickens Army, dedicated to clean-fuel adoption—and more than 1.6 million people have joined through the website www.pickensplan.com.
“It is so encouraging to see Republicans and Democrats come together to put America first,” Pickens said in a statement to energyNOW!, a weekly TV news-magazine.
On the other hand, Americans for Prosperity, supported by the David H. Koch Charitable Foundation, believes that a business should not receive incentives for something it would do anyway. The group comments, “Americans for Prosperity opposes the use of the tax code to promote the use of natural gas as a vehicle fuel or to subsidize the purchase of natural gas vehicles. If natural gas is a worthwhile fuel source, it should prove itself in the marketplace, not be handpicked by industry lobbyists and DC politicians.”
The Heritage Foundation, supported by the Charles G. Koch Charitable Foundation, comments, “Subsidies funnel money toward projects that have little market support and offset the private-sector costs for investment that would have been made either way. … The fact that other transportation fuels receive government support is not a good reason to continue or expand special treatment for natural gas.”
Disputing that viewpoint, Lou Pugliaresi, president of the Washington, D.C.-based Energy Policy Research Foundation, explained the importance of energy production to “the fabric of the national economy” in testimony before the members of the Energy and Commerce Committee this week. He estimated that increased domestic shale development will transfer into direct savings to U.S. consumers—somewhere between $40 billion and $80 billion dollars per year. He also explained the impact regulations can have on capital investment, stating, “Investors need to have confidence that the regulatory regime is not going to be cavalier — that it is going to be something they can predict and live with.”
Andrew J. Littlefair, president and CEO of Clean Energy (News - Alert) Fuels, noted, "There are about eight million Class 5 through 8 heavy-duty trucks in the United States. These trucks range from delivery to refuse trucks to over-the-road 18-wheelers and use upwards of 30 billion gallons of fuel annually. Helping the owners of these vehicles replace their diesel trucks with trucks running on CNG or LNG can have an immediate, measurable effect. In addition, we believe that moving America's heavy-duty truck fleet from diesel to natural gas will have the effect of creating over 400,000 direct and indirect new jobs over the next five years."
The sponsors of the bill provided one final argument, which amounted to “use it or lose it.” They said, “We have to decide: Do we use it here or export it? If we do not use our natural gas here in America, it will be exported abroad, for others’ benefit. The price of natural gas internationally is significantly higher than it is here in the United States. As a result one facility recently received a permit to export natural gas and four more U.S. facilities are following suit. We can use that natural gas here in the United States to displace oil or we can export it, so other countries can improve their own energy security and clean their air.”
To see a full copy of the bill visit the Senate website.
Cheryl Kaften is an accomplished communicator who has written for consumer and corporate audiences. She has worked extensively for MasterCard (News - Alert) Worldwide, Philip Morris USA (Altria), and KPMG, and has consulted for Estee Lauder and the Philadelphia Inquirer Newspapers. To read more of her articles, please visit her columnist page.Edited by
Rich Steeves
