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Why Conservatives should oppose The NAT GAS Act

By: Chris Chocola (Diary)  |  May 26th, 2011 at 12:55 PM  | 

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This is my first post on Red State – I’m looking forward to being a part of this community and I look forward to keeping you informed of the Club’s ongoing activities to defend economic liberty.

I want to use my first post to talk about HR 1380.

HR 1380, otherwise known as the “NAT GAS Act”, is bipartisan legislation (sponsored by 105 Democrats, 83 Republicans) supported by billionaire T. Boone Pickens that would provide billions of dollars in tax incentives for the production and use of natural gas vehicles. Several fiscal conservatives in the House have been duped into thinking this is a good bill but I hope that they immediately withdraw their names as co-sponsors. Putting aside the fact that market-distorting tax credits destroy the system of free enterprise, and are opposed by the Club for Growth, I wanted to highlight one specific part of the bill. Section 403 states:

It is the sense of the Congress that the Environmental Protection Agency[‘s] new fuel economy and greenhouse gas emission regulations for medium- and heavy-duty engines and vehicles should provide incentives to encourage and reward manufacturers who produce natural gas powered vehicles. Such regulations should take into account the petroleum reductions provided by such vehicles and also quantify all greenhouse gas emission reductions provided by natural gas powered engines and vehicles.

In other words, this bill basically lends credibility to the EPA’s ability to regulate greenhouse gas emissions, something opposed to by many Republicans in Congress. Therefore, the Club for Growth cannot help but conclude that anyone who remains a sponsor of this bill is a supporter of Obama’s desire to regulate climate change through the EPA.

Congressman Mike Pompeo of Kansas, a true fiscal conservative, has opposed the NAT GAS Act from the start, and has even introduced a resolution (H.Res. 267) to oppose all energy subsidies. We strongly encourage all fiscal conservatives who support HR 1380 to immediately remove their name, and instead, support Congressman Pompeo’s resolution.

Congressman Todd Akin and Congressman Steve Pearce have already wisely and courageously dropped their names from the NAT GAS bill, and should be applauded for doing so.

I’d love it if Red State users could join with Congressman Pompeo and the Club for Growth to help kill this bill.

Thanks for all you do to advance the cause of economic freedom.

Best,
Chris Chocola
President, Club for Growth

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COMMENTS

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  • junkbondtrader41

    Can we conclude you would lift your opposition if that language were stricken from the bill? Seems to me all the legislation calls for is the keeping of statistical estimates on the reduction of these gases. Even recognizing their existence makes one an EPA “dupe?”

    Not buying this one, Chris. I’m not “pro-oil” I’m pro what works. I’d much rather a realists non-enviro like Pickens be devising energy proposals than dumping billions into “green” boondoggles. And all things considered, the Pickens plan is preferrable to total inaction. (Yes, I know, “Drill, drill, drill!” I’m all for it. But this isn’t an all-or-nothing solution.)

    Do you have any objects on the feasibility of natural gas as a cheap, viable energy source? Seems to me that’s what one’s vote ought to be based on.

    • mkozikowski

      Chris is only suggesting that the strong BIAS produced through tax incentives are very anti-competitive market forces.

      If this is truly a lucrative solution or a viable alternative, then the market will bear it out.

      If, on the other hand, it is just another THING that Americans will be compelled to support trough increased taxes, then the natural gas solution should be dropped.

      Let the market decide. Let the drillers drill. Let the builders build. Each on their own, or borrowed money. If it works, it works. If not, try something else.

      • http://impudent.edublogs.org/ kyle8

        I am utterly convinced that NO subsidies, of ANY KIND, for ANY REASON are ever good.

        They always contain perverse incentives and are full of unintended consequences.

        • ihateliberals

          he likes to make you think he is a nice conservative but all he cares about is filling his deep pockets. He’ll go which every way Dem or Repub that will get him more money.

          • williamjameson

            the water supply around Dallas and drive up costs while pushing to make create a new exchange traded water commodity. If TB got his way we’d see Nat Gas manipulation again and the same for water. Both of which would drive up industry costs and punish consumers. Its all about Pickens and his hedge fund.

        • aesthete
    • The_Gadfly

      ALL tax incentives distort the market.

      I’m all for using natural gas. I’m all for using oil. I’m all for using coal. I also happen to be all for using solar and wind. Just as long as they all play with the same set of financial rules – no fingers on the scales to make one preferentially cheaper than the others.

      Personally, I’d like a pure flat tax with no investment tax credits anywhere. But if there are going to be investment tax credits, they need to be equally applied across the board so that the most efficient energy sources are developed to their fullest.

    • rjhfl

      so I must assume that he is back for another attempt to further enrich himself with taxpayer dollars.

      • jdtruth

        Thanks, Erick. I’d heard about this on the radio and thought, what is going on now? Where are the conservatives?? T.Boone Pickens has always pushed the alternative energies. He may say he’s an oil man, but I’ve doubted it for a long time.
        Subsidies are subsidies and junk science is junk science. There is even a marketing company that is pushing this on oil executives..I applied for the job..never heard back, but I sat in for a day with the marketing co. in Winder making calls to all of the oil honchos to meet with them..and I believe it was to show/”re-direct” their thinking on alternative energy…show them how to profit from it or some such thing!
        Pushing alternative energy development..pushing vehicles like this that nobody wants…it is all about control.
        I seriously look at any candidate in a negative way who supports the “mantra” (and it is a mantra), “all of the above.
        I notice even Allen West had on his website this energy type of nonsense! Also, why do so many Republicans in GA fall for this “hook, line, and sinker” and act very much like Democrats on it as well as quite a few other issues? Where are the true conservatives without having to be begged by constituents to act conservative?

        • goetzliedtke

          The only reason T. Boone Pickens supported alternative energy (specifically wind) was because he wanted the right of way for the electrical lines – to use for a natural gas pipeline. This is nothing more than the T. Boone Pickens enrichment bill.

          Of course, all of this could be moot if the FWS puts the Sand Dune Lizard on the endangered species list.

      • edintexas

        Of course Pickens is seeking to enrich himself. While there is nothing wrong with the profit motive, there is something very wrong with “rent seeking” *, and that is what Pickens is trying again.

        * Rent seeking in current general economic terms is the practice of a company using the power of government to give it an advantage over competitors.

    • ihateliberals

      Anything that gives the EPA more power is not in our best interest. Besides that Tax incentives distort the market and should not be used. Let the market be free and decide on its own whether to use Nat Gas, Oil etc. Another thing if they start trying to make 18 wheelers use NAT Gas it won’t work. It doesn’t have the power of diesel. I believe all tax incentives of the Petroleum industry should be halted.

      • Stan(ley) Pruss

        Pickens only wants trucks because that has biggest effect for cost. Are all those now oppossed also working hard to oppose ethanol subsidies or are the defending their vested interest in ethanol? Follow the money. Pickens says he wants a 5 year sunset clause. Switch truck engines to CNG once & done. That will significantly reduce oil imports. Politics is the art of the possible. Those opposing it have another purpose than reducing government, they just don’t want compitition with their government supports.

      • johnstoirvin

        (and constitutional, I believe), if you halt all tax incentives of the Petroleum industry, then the same must be done with all businesses who avail themselves of the same incentives, which is all of them. Is this what you mean?

      • v_gold

        We all hate higher taxes, so I don’t oppose tax credits. After all, a credit represents money that is offset against a tax liability. It certainly isn’t a subsidy. Plus, I’m all for natural gas as we have a 100 year supply with more being discovered everyday. And Chris, let’s not forget that trucks can’t run on electricity or fuel cells, only petroleum or natural gas works for the big rigs. I’m sure you realize that natural gas is far cheaper than petroleum, don’t you? Bet those truckers and consumers would love cheaper prices at the pump. Wouldn’t that free market competition jump-start our American economy?

        I’m sure you did your research, Chris, so you’re cognizant of the fact that the US buys petroleum from the likes of Saudi Arabia, other Gulf States and Venezuela. As issues go, that is far more important than your concerns about the EPA. It’s called national security.

        Oh, and don’t forget that when you were in Congress, you voted for H R 6, a bill offering tax breaks and incentives to encourage oil and gas companies to reduce the nation’s dependence on foreign oil, conserve resources and reduce pollution. And now you claim that it is the EPA issue that is problematic in view of the fact that you were concerned about pollution as evidenced by your support of HR 6. Isn’t the EPA argument you make of most concern among your friends at Exxon Mobile?

        What’s the real agenda here, Chris? I certainly don’t buy your concern about the EPA. I’m for American fuel, not foreign fuel, especially when that foreign fuel comes from the Gulf States. Isn’t the position you’re taking implying, de facto, that the US buying Saudi oil is a national imperative? Does US national security rank beneath your concern about the EPA? What are your views on the free-market economy, Chris? Shall we buy expensive petroleum from the Gulf States or use cheaper natural gas drilled from within our borders?

        In conclusion, let’s keep our eyes on the big picture, shall we? Your argument that the EPA is more important than national security is an absurdity. We have huge supplies of natural gas here in the US. Let’s use it. It’s the patriotic thing to do.

        • The_Gadfly

          tax credits are no less distorting than government subsidies. They reduce the price of the good to the consumer on the basis of a politician’s vote, not a consumer’s decision.

          And when it comes to the EPA, no suspicion is too far. The whole alleged premise for the constitutional existence of the agency is based on bending the authority of the government so far that it actually breaks: A 20 square foot patch of land that gets swampy once every year or every other year doesn’t constitute a navigable waterway. They’ll do same thing with that language, which is a sneaky way to get congress to approve authority for the EPA to regulate energy production on the basis of fatally flawed arguments for anthropomorphic global warming.

    • http://impudent.edublogs.org/ kyle8

      I have been studying subsidies, tax credits, and other government interference going all the way back to world war 2.

      Do you know how many of them actually accomplished their stated goals? I will give you a hint, we are still waiting for one.

      They just do not work, period. Or, they work too well and cause a huge distortion.

      T. Boondoggle Pickens is just another P T Barnum looking for a sucker he can fleece.

      This is real simple, if prices continue to rise, then natural gas will become a reasonable fuel source all by itself with no need for government.

  • billonesty

    I wish people would get to the heart of the matter. We seem to be dinking around with arguments that sound like “It costs too much” or “It distorts the free market” and those are true enough. But they leave us open to compromise.

    The FACT is that Congress is not ALLOWED by the Constitution to make law concerning the energy industry, or ANY industry for that matter! Congress is allowed to tax only to support the legislation it is allowed to pass according to the enumerated powers. There is no power to tax to modify our behavior!

    But that seems to be an unpopular argument to make. And so we continue down the road of the federal government usurping more and more authority from the states and we all accept it as good for us as long as it doesn’t “cost too much” or it “doesn’t distort the free market too much.”

    • http://stevemaley.com Steve Maley

      The lack of a network of fueling stations is the main obstacle from widespread adoption of NGVs.

      Investing in fueling stations is risky because there are so few NGVs on the road.

      I could support limited tax incentives (like maybe accelerated depreciation, not credits) to help get fueling stations get started.

      NG supply or the production of vehicles doesn’t need help. The infrastructure is already there. NG is inherently economic and competitive on all technical considerations.

      And that’s coming from someone on the supply end of the business.

      • edintexas

        I remember back a few decades when Lone Star Gas was equipping all their trucks (at least in the Dallas area) with natgas conversion kits. The efficiency problem associated with the conversion was the need for a fairly large V8 engine due to the general loss of power when compared to gasoline or diesel. Has engine technology overcome this problem, or will people still be disappointed with the performance of natgas fueled vehicles when compared to gas/diesel? I guess if they will put up with 85% ethanol, natgas isn’t any great loss.

        Of course the other issue with natgas conversion is the need for the pressure tank. Easy to put in a truck, not so easy (in an era when the Ford Taurus is considered a “large sedan”) to tuck into a car and keep it far enough away from the passenger compartment for safety in a collision.

        • acat

          so yeah, gonna need either bigger engines or more frequent refills.

          There are some upsides – fewer to no problems with “dirty gas”, for example; cleaner exhaust for all the greenies – that the average homeowner will have to adjust to.

          As to the gas tank, I’m not sure I’m seeing the problem – farmers have been converting vehicles to propane by putting a big bottle in the trunk for decades. Losing some trunk space on the “daily driver” isn’t a real problem.

          If (or, more accurately, when) this takes off, sooner or later someone will do a dedicated natgas Prius-alike….

          Mew

        • http://stevemaley.com Steve Maley

          Even a natural gas powered dragster.

          I don’t know why light trucks should be a problem.

          Also, re: the fuel tanks. The main problem is the size & the displacement of luggage/spare tire room. Tank rupture has not been a problem.

          • acat

            Gorgeous (if you’re into classic English motorcar style) little two-seater, but .. thanks to the 1970s emissions laws, it couldn’t be imported as a gasoline-powered vehicle.

            Morgan’s answer? Stick a propane tank on it. Specifically, *on the back bumper*.

            For a daily-drive, commuter vehicle, cargo space isn’t a big deal – natural gas has the same trade-off there as hybrids – so my guess is that’s where the eventual “win” for this technology is.

            Mew

          • http://stevemaley.com Steve Maley

            I used to work for a subsidiary of Pittsburgh-based Consolidated Natural Gas. Joe Mezquita was an employee of East Ohio Gas, a distribution affiliate, who built a natural gas dragster (actually 3 of them) in his spare time. He raced them, too. Eventually, the company saw the PR advantage, and started using him in promotional material.

            NY Times, 1992:

            The Natural Gasser uses a 225-cubic-foot tank that holds gas at 2,400 pounds of pressure. The pressure is reduced, in two stages, to 3 ounces. None of this is unusual for natural gas vehicles.

            But the engine’s adjustment is unusual. The race car runs at a compression ratio of 14 to 1; most cars on the street, whether they burn gasoline or have been converted to natural gas, have ratios of 8 to 1 or 9 to 1.

            Natural gas, Mr. Mezquita pointed out, has an octane of 130, allowing higher compression without knocking. That extra compression means more horsepower. In another move to squeeze out horsepower, Mr. Mezquita adjusted the timing to fire the spark plug earlier, allowing more burn time. This is possible only because natural gas detonates a bit more slowly than gasoline.

            Here’s a later undated press release:Joe Mezquita’s New Natural Gas Dragster Is First to Win a National Title

            Natural Gasser III has a 700-horsepower fuel-injected natural gas engine, similar to the one pioneered by Mezquita for Natural Gasser II. It races at speeds up to 170 miles per hour.
            “We changed the suspension system so Natural Gasser III could respond better to the power generated by our natural gas engine,” Mezquita said. We are getting better traction and better control of our speed. The result is we can more accurately complete the quarter-mile course in the 8.9 seconds of elapsed time required for Super Comp dragsters.”
            There are over 100,000 natural gas vehicles in the United States today, many of them fleet vehicles such as buses, trucks and vans, run by school districts, city transit systems, universities and large companies.

            So I don’t know how to reconcile the remarks of commenters who keep insisting that NG suffers from a power disadvantage.

          • acat

            Natural gas merely suffers a density disadvantage in gaseous form. LNG (Liquefied Natural Gas, for everyone else) looks like it’d either be close to gasoline in energy density, or better…. (octane isn’t everything…)

            Besides, how cool would it be to go tailgating and run the grill off the same tank that got ya to the stadium? (grin)

            This actually brings up what is about my only concern – the inevitable home-hack fill-up station.

            Mew

          • http://stevemaley.com Steve Maley

            I’m not sure what the pressure in the distribution system is.

            It would cost quite a bit to compress gas from near-atmospheric pressure all the way up to 3600 psi, which I think is the pressure in the NGV tank.

          • acat

            to “save a buck” by filling up at home and burn the family ranch to the ground.

            That said, I’m pretty pragmatic when it comes to energy. It doesn’t matter to me whether my car runs on dino-diesel, coal-generated electricity, natural gas, or unicorn flatus as long as I can get in and go when I want, where I want.

            Natural gas appears to offer this possibility.

            Mew

          • http://908StraightSt.wordpress.com/ mbecker908

            I love Brit sports cars – the “old” ones. Finicky, pain in the butt, every one had factory installed rust and their own personality. But they were great.

          • acat

            That would really perk up my morning.

            Of course, owning a classic car in Illinois is usually an exercise in abuse – between bad roads and road salt…. The old Brit sportscars just don’t handle it.

            Mew

    • momofthecastle

      I agree with you, Billonesty, and we cannot repeat it often enough! Congress has NO CONSTITUTIONAL AUTHORITY to (loved your wording) TAX TO MODIFY OUR BEHAVIOR.

      However, Chris, it is good to have you here at Red State.

  • williamjameson

    Less power = lighter loads. Freight companies will kill this bill in committee. Even the teamsters could do the math that leads towards less revenue or higher truck costs as stronger engine development will drive up engine cost as well as maintenance, training, etc.

    • acat

      Same power, shorter distance per tank.

      Would the long haul guys object to that if, as a side benefit, the price of gas (natural gas, in this case) drops?

      Mew

  • saveamerica69

    Imported oil pays for terrorism…I thought that was pretty damn clear after Saudi Wahhabists flew 747s into the World Trade Center.

    The US has hundreds of years worth of natural gas right here. We don’t need to fund terrorists by buying their oil.

    The Nat Gas Act kick starts the building of a CNG/LNG infrastructure for trucks. A first step toward weaning the US off imported oil.

    Or we could do nothing..send billions a year to hostile countries and watch our troops and citizens get killed with the bombs and bullets bought with our own money.