At a luncheon hosted by Politico at the GOP convention in Tampa today, T. Boone Pickens said truck fleets will switch from diesel to natural gas without Congress approving the NAT GAS Act, legislation offering generous tax credits for the purchase of natural gas trucks (up to $64,000 per vehicle) and installation of natural gas fueling infrastructure. Pickens reportedly spent about $100 million over the past five years promoting his energy agenda, commonly known as the Pickens Plan.

Congress declined to pass either the NAT GAS Act or an earlier iteration of the Pickens Plan that would have required 20% of the nation’s electricity to come from wind, thus supposedly freeing up natural gas to be used to fuel both trucks and passenger cars.

Critics argued that if switching to natural gas vehicles makes commercial sense, private enterprise will bring about the transformation without Washington trying to pick energy market winners and losers. Pickens is now talking the talk. Politico‘s Darren Goode reports:

“You don’t have to have a tax credit; it’s going to happen,” he [Pickens] said. The choices to run 18-wheelers, he said, are between natural gas and diesel — and natural gas is “$2 a gallon cheaper.”

And Pickens strongly suggested that he doesn’t have any plans to try to push his plan anymore in the nation’s Capital.

“I will not go back to Washington again unless it’s for a social event,” he said.

The billionaire and former oil baron also lamented that while his plan initially promoted wind energy, that hasn’t worked out so well.

“I’ve lost my ass” to wind-energy investments, he conceded.

Recently, an environmentalist special interest group engendered a political backlash in Massachusetts after running a particularly sleazy television advertisement that equated baby abuse with Sen. Scott Brown’s (R) admirable vote for excellent legislation that would have reined in the Environmental Protection Agency’s runaway regulatory regime for greenhouse gas emissions. I wrote about it here; suffice it to say, Sen. Brown turned lemons into lemonade by painting himself as a sympathetic father-figure under attack from unscrupulous sleazebags.

In the immediate wake of this blowback, I find it interesting that Politico’s Morning Energy Report (I recommend signing up here) reported today on how the greens feel that they have failed to achieve a cap-and-trade energy rationing scheme because they have been too timid. According to the Politico writeup,

After spending a half-billion dollars on failed campaigns for a U.S. climate bill and an international climate treaty, green groups’ major bankrollers are wondering if they need to be more selective with their carrots and more menacing with their sticks.

“We’re not very good at supporting our friends and we’re not particularly good at punishing people who vote the wrong way,’ Kathleen Welch, a Washington-based philanthropy adviser, said. ‘Unless we’re really willing to play hardball, I don’t think we can win on big issues like this.’

…Now, the donors are exploring new strategies to make their dollars do more, including attacking greenhouse gases one economic sector at a time, targeting political moderates and concentrating their efforts in swing states.

This storyline makes a great deal of sense…in bizarro world. On planet earth, the greens have been playing “hardball” for some time now. Those distasteful ads I described above weren’t run solely in Massachusetts. No, they were also run in Missouri, to punish Sen. Claire McCaskill, a Democrat, for having the temerity to try to save the economy from the EPA.

This wasn’t the first time that environmentalist special interest groups have gone after Democrats for failing to toe the green line. As my colleague Marlo Lewis explained in this blog post, last year Move On leveled the ‘baby-harmer’ charge at Democratic Senators Mary Landrieu (Louisiana) and Blanche Lincoln (Arkansas).

All three of these Democratic Senators are mothers. How much more “hardball” can the environmentalist movement get, than attacking politically-like minded women politicians with the accusation that they are harming babies? The gutter gets no deeper.

My guess is that this “hardball” nonsense is a sleight of hand, crafted by a well-heeled public relations group, in order to draw attention away from the political blowback in Massachusetts. That is, it’s political propaganda.

Update on the Boondoggle Bandwagon

The controversy over the T. Boone Pickens Earmark Bill, H. R. 1380, continued to grow this week. Three more Republicans joined Rep. Steve Pearce (R-NM) in getting off the Boonedoggle Bandwagon and withdrew as co-sponsors.  They are Rep. Todd Akin (R-Mo.), Glenn Thompson (R-Pa.), and Tim Griffin (R-Ark.).  The complete list of 187 co-sponsors can be found here.

A joint letter organized by Heritage Action for America and signed by seventeen conservative organizations opposing the bill was sent to the Hill. Pickens himself published an op-ed co-authored by flack-for-hire Denise Bode in Politico that was full of his usual blend of self regard, bluster, and misinformation.  Pickens and Bode claimed in the op-ed that the House Republican Study Committee has endorsed his bill.  It has not, and Politico quickly corrected Pickens.  They also claimed that wind power is now cheaper than new coal-fired power.

Pickens continues to claim that he is not in this for the money, but only to reduce America’s reliance on foreign oil.  See my CEI colleague Marlo Lewis’s blog on GlobalWarming.org detailing Pickens’s BP Capital Management’s investments in a wide range of companies that would benefit by enactment of the Pickens-Your-Pocket Plan.

For years, certain natural gas producers, led by Chesapeake Energy CEO Aubrey McClendon, have pursued a myopic strategy of demonizing coal in an effort to seize a larger share of the electricity generation market.

It started in 2008, when Chesapeake funded an unsigned “Dirty Coal” advertising campaign. It featured black and white photos of children, with coal smudged faces, looking sad. Having set the table with anti coal propaganda, McClendon then teamed up with the Sierra Club’s Carl Pope to implement a legislative strategy. The pair traveled around the country, pitching natural gas as the “bridge fuel” to a green energy future.

They scored one major success, in Colorado. There, ex-Governor Bill Ritter had made the “New Energy Economy,” the centerpiece of his administration. As such, he was receptive to fuel switching as a way to meet his Climate Action Plan, a non-binding mandate to reduce the state’s greenhouse gas emissions 20% below 2008 levels. As I’ve written about at length here, the Ritter Administration engaged in a number of deceptions to carry Chesapeake’s water.

All along, CEI has warned the gas industry that it was playing directly into the hands of environmental special interests, for whom all hydrocarbons–not just coal–are considered “dirty.” It’s an ancient strategy: Divide and conquer. Today, it’s the greens and gas taking down coal; tomorrow, it will be the greens taking down gas.

And so it has come to pass, as is explained in an excellent article titled, “Greens Sour on Natural Gas,” by Bob King, from yesterday’s Politico.  It starts,

Whatever happened to the romance between the environmental lobby and natural gas?

After years of basking in a green glow as the cleanest fossil fuel and a favorite short-term choice to replace cheap-but-dirty coal, gas now finds itself under attack from environmentalists, filmmakers and congressional Democrats — and even from some scientists who raise doubts about whether its total emissions are as climate-friendly as commonly believed.

Read the rest here.

Can environmental agencies use BACT determinations to require major emitting facilities to switch fuels?

This arcane-sounding question is of great practical importance to energy consumers and the economy. It is a question addressed in EPA’s long-awaited PSD and Title V Permitting Guidance for Greenhouse Gases, posted online yesterday in Politico.

EPA’s guidance document is intended to assist permit writers and permit applicants determine what constitutes “best available control technology” (BACT) for greenhouse gas (GHG) emitting facilities. On January 2, 2011, EPA’s motor vehicle GHG emission standards will go into effect, making GHGs air pollutants “subject to regulation” under the Clean Air Act’s Prevention of Significant Deterioration (PSD) pre-construction permitting program. Any firm planning to build or modify a large GHG-emitting facility (e.g. a coal-fired power plant, an oil refinery, a cement production facility) will first have to obtain a PSD permit from EPA or a State environmental agency.  To obtain a PSD permit, the applicant will have to demonstrate that the new or modified facility incorporates BACT by virtue of its combustion processes, work practices, technology controls, or some combination thereof.

A question that has come up time and again in discussions of EPA regulation of GHGs is whether BACT can be interpreted to require facilities to change the fuels they use. For example, could a permitting agency decide that an electric generating unit is not BACT-compliant unless the facility switches fuels from coal to natural gas, or from natural gas to a mixture of gas and wind?

Waxman-Markey died in the Senate when the public realized that cap-and-trade is a stealth energy tax.  Cap-and-trade functions as an energy tax in large part because it is designed to suppress and, ultimately, eliminate electricity production from coal, America’s most abundant and affordable electricity fuel.

If BACT can be interpreted to require fuel switching, then it can empower activist bureaucrats to implement the anti-coal agenda that the American people rejected on November 2.

Where does EPA’s guidance document stand on this critical issue? Here’s what it says:

While Step 1 [of the BACT determination process] is intended to capture a broad array of potential options for pollution control, this step of the process is not without limits. EPA has recognized that a Step 1 list of options need not necessarily include inherently lower polluting processes that would fundamentally redefine the nature of the source proposed by the permit applicant.* [p. 25]

* In re Prairie State Generating Company, 13 E.A.D. 1, 23 (EAB 2006).

EPA does not interpret the CAA to prohibit fundamentally redefining the source and has recognized that permitting authorities have the discretion to conduct a broader BACT analysis if they desire.**  The “redefining the source” issue is ultimately a question of degree that is within the discretion of the permitting authority. [p. 28]

** In re Knauf Fiber Glass, 8 E.A.D. at 136; In re Old Dominion Cooperative, 3 E.A.D. at 793.

So, although BACT options ”need not necessarily include inherently lower polluting processes that would fundamentally redefine the nature of the source,” EPA “does not interpret” BACT “to prohibit fundamentally redefining the source,” leaving such decisions to the “discretion of the permitting authority.”

It would be prudent to suppose that anti-coal bureaucrats at EPA and State agencies will do whatever they think they can get away with.