Natural Gas Bills in Congress Benefit Consumers As Well as Fuel's Biggest Backer
By John O'Dell July 9, 2009
There's a natural gas car in Edmunds' long-term fleet
and I drive it most of the time, and like it, so I ought to be banging the drums for a pair of bills promoting natural gas vehicles and filling stations that are pending in Congress this session.
But I'm a bit cautious: the bills' big backer is T. Boone Pickens, the Texas oilman who has turned his talents and substantial fortune to promoting - and investing heavily in - natural gas.
The latest, introduced just this week in the Senate, pretty much echos the language of the first, H.R. 1835, introduced in the House is April and now awaiting action in the Subcommittee on Energy and Environment.
Several sections of the bills would give hefty tax credits to manufacturers and purchasers of natural gas vehicles, but several others would provide huge tax credits to companies that build natural-gas stations - up to $100,000 per installation.
Guess what. Pickens is co-founder and a significant owner of Clean Energy Corp., the country's biggest builder and operator of natural gas filling stations.
I guess somebody benefits from most any legislation passed in Congress, but I'd be happier if Pickens had sat this one out and let a less-financially involved organization, perhaps one of the green groups, do the heavy lifting.
Instead, T. Boone stood next to Sen. Robert Menendez, a New Jersey Democrat who is co-sponsoring the bill, at the press conference when Menendez announced that the Senate measure had been introduced.
Despite all that, I still like the bill, which also would double the tax credits for purchasers of natural gas vehicles and extend the incentives for 10 years - through 2019.
The credits would help offset 80 percent of the extra cost of a natural gas vehicle. That's not insubstantial.
The Honda Civic GX, the only factory-build natural gas car produced today, costs about $7,000 more than a similarly equipped standard gasoline Civic, and the premium for natural gas work trucks and vans can be even more.
The natural gas tax credits permitted by both the House and Senate measures would top out at $12,500 for passenger cars and light trucks and $64,000 for heavy duty trucks.
The credit for our 2007 Honda GX was $4,000. For a new GX purchased under this bill, if it passes unaltered, it would jump to around $5,600.
The bill, which still hasn't received a number in the Senate, would also allow a business to claim a tax deduction for the entire cost of building a new natural gas refinery placed in service by the end of 2014.
Although Pickens stands to profit from the bill, he makes an awful lot of sense when he points out that we now send about $500 billion a year to foreign oil companies - many controlled by governments that don't much care for the U.S. - and that running cars and trucks to natural gas, of which the U.S. has plenty, would help keep that money at home, and help boost our energy independence and security.
Plus, natural gas is a lot cheaper than gasoline - I can attest to that. I've been paying an average of $1.22 a gallon with a home fueling unit, and at retail pumps in Southern California the fuel is typically at least 50 cents a gallon less than gasoline.
This isn't to say that natural gas is the answer. It's just part of a solution to our future energy needs.
But it can help us reduce import oil use and bridge the gap from petroleum to battery- and hydrogen fuel-cell electric power.
For those reasons, the bills are worth serous consideration.
John O'Dell, Senior Editor
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