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 Goodereports:
“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.
This afternoon the Senate will begin voting on highway bill amendments, which include the Burr/Menendez amendment, a.k.a. the New Alternative Transportation To Give America Solutions (NAT GAS) Act. Its chief lobbyist and beneficiary is billionaire T. Boone Pickens. If Congress were subject to truth in advertising laws, the amendment would be called the Pickens Payoff Plan or the Pickens-Your-Pocket-Boondoggle-Bill.
The Texas gas mogul’s lobbying for billions of dollars in tax credits for natural gas vehicles, fueling stations, and motor fuel is all about patriotism and energy security and has nothing to do with rent seeking or corporate welfare. Just ask him! “I’m sure not doing this for the money,” Pickens told the New York Times.
Only the Shadow knows what lurks in the minds of lobbyists, but the circumstantial evidence – Pickens’s huge investments in companies that would profit directly from Congress ramping up demand for natural gas vehicles, motor fuel, and infrastructure — is rather overwhelming. For some juicy details, see the commentary I posted on this site last year when the Boonedoggle Bill looked like it might actually go somewhere in the House.
None of this is to denigrate the potential of natural gas as a transportation fuel. Over the past few years, natural gas prices have fallen as petroleum prices have increased. Responding to this price disparity, GM and Chrysler plan to produce thousands of bi-fuel picks that can run on either natural gas or gasoline, Rob Bradley points out today at MasterResource.Org. [click to continue…]
Fresh off a nod from President Obama’s State of the Union speech, T. Boone Pickens has again began to circle the country touting the alleged benefits of providing subsidies for the transportation sector to convert more vehicles to natural gas power. Today, he writes in The Chicago Tribune:
If you are going to transform American energy to address the national security and economic risks associated with our OPEC oil dependence, there is only one solution: move our natural gas reserves into transportation, with an emphasis on the heavy-duty truck and fleet-vehicle markets.
Free-market advocates argue that’s bad public policy. They fail to understand that OPEC is far from a free market. They’ll tell you we shouldn’t pick winners and losers in the transportation fuel segments. I say it’s time to pick America over OPEC. Let’s go with anything American. I’m fine with the battery, but remember, it won’t move an 18-wheeler.
Imagine the impact natural gas could have in solving our energy problem. Targeting heavy-duty trucks and fleet vehicles — about 8.5 million in all — could cut our OPEC oil dependence in half in 10 years or less.
Fortunately, while we wait for Washington policymakers to lead, the move to replace more expensive, dirtier OPEC oil, diesel or gasoline with cheaper, cleaner domestic natural gas is gaining private-sector support. At an event in Chicago last week, two leaders in the natural gas vehicle industry — Navistar and Clean Energy Fuels — announced a plan to aggressively develop a comprehensive system to build natural-gas truck engines and provide the infrastructure to fuel them.
Over-the-road trucks tend to run the same routes on the same schedule. Drivers stop in the same places to rest, eat and refuel. Putting natural-gas refueling stations along the major travel routes is a relatively minor logistical issue. Building natural-gas engines for those trucks will be a major job creator.
The fact that OPEC isn’t a “free market” does not allow one to conclude that the U.S. should further distort markets without further argumentation, which Pickens does not provide, deciding to go the “national security” route that so many arguments deviate towards when they run out of good points.
T. Boone Pickens went on Bloomberg to discuss the Pickens Plan:
Pickens claims that Koch is working for himself, while the pure hearted T. Boone Pickens is working for America. Now yes, Koch Industries has a financial incentive to not support federally built infrastructure for a fuel that competes with a product that he sells, but it also clearly aligns with a free-market perspective of not providing federal support for any particular energy sources. Furthermore, if it wasn’t obvious, Pickens would stand to make tons of money from increasing the use of natural gas in America, so its beyond disingenuous to pretend that he is solely “doing good.” [click to continue…]
Some GOP House Members may see no problem in pushing H.R. 1380, the Boonedoggle, Pickens-Your-Pocket Bill, which would hand out tax credits up to $64,000 apiece for the purchase of natural gas vehicles, because, after all, chief beneficiary T. Boone Pickens is a major donor to Republican candidates.
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.
As readers of this blog are no doubt aware, I’m a big fan of ‘fracking,’ a.k.a. hydraulic fracturing, the American-made technological miracle in natural gas production that has roughly doubled known North American gas reserves in only the last five years. In previousposts, I’ve defended fracking from nonsensical attacks launched by ill-informed environmentalists. Quite contrary to what the alarmists would have you believe, we’re lucky for the fracking revolution. Not only has it dramatically increased our domestic supply of natural gas, but now it’s being used to extract oil, too, and it could prove just as revolutionary for that industry.
Fracking does, however, have one major drawback: it has caused rampant rent-seeking. While gas supply has exploded, American consumption increased only 9 percent from 2005 to 2010. The sagging economy has further increased this disparity between gas supply and demand. For consumers, this is great, as it should usher in a period of relatively stable, low prices in the historically volatile gas market. For gas producers, it could be great. The low prices should make their product more attractive relative to other forms of energy. In turn, this could lead to whole new sectors of demand.The problem is that a couple major players in the gas industry refuse to wait for market forces to work their magic. Instead, these impatient industry titans are trying to convince politicians to enact policies that force Americans to use natural gas.
I just finished watching the Sunday morning political talkies, and the second biggest ad buy of the day was in support of H.R. 1380, the NAT GAS Act, legislation that was produced by billionaire T. Boone Pickens to benefit the natural gas industry. T. Boone Pickens is a major player in the natural gas industry, so he basically made H.R. 1380 to make himself richer. That’s why this blog has referred to H.R. 1380 variously as the “Pickens Your Pocket Boondoggle Bill,” and the “T. Boone Pickens Earmark Plan.”
The advertisements I saw left me troubled. They indicated that T. Boone Pickens is less tone deaf, and therefore potentially more successful, than the last time he tried to get the Congress to enact legislation that he wrote to further enrich himself.
That was the 2008 “Pickens Plan,” and it was even bigger rip-off than H.R. 1380. The “Pickens Plan” was a simple four-step strategy: (1) subsidize wind produced by T. Boone; (2) subsidize transmission towers to deliver T. Boone’s wind power to cities; (3) force Americans to buy wind power produced by T. Boone; (4) force American motorists to fill their cars with T. Boone’s “leftover” natural gas, the stuff that was displaced by T. Boone’s wind power.
One hundred eighty-six Members of Congress have signed on to H.R. 1830, the New Alternative Transportation to Give Americans Solutions (NAT GAS) Act of 2011, better known at this Web site as the Pickens-Your-Pocket Boonedoggle Bill, in honor of its chief lobbyist and beneficiary, billionaire T. Boone Pickens.
The bill would provide targeted tax breaks to subsidize the manufacture and purchase of natural gas vehicles, installation of natural gas refueling infrastructure, and production of compressed and liquefied natural gas for use as motor fuel. The bill includes no overall budget authorization. Moreover, many of the provisions modify current sections of the tax code, which in turn refer to other sections, and the Congressional Research Service inexplicably has yet to provide a bill summary. So the total amount of the tax breaks is anybody’s guess.
Nonetheless, the final tab has got to be huge even by Washington standards. Each manufacturer could claim credits of $4,000 per vehicle up to an overall amount of $200 million per year. Each purchaser could claim credits ranging from $7,500 to $64,000 per vehicle depending on how much the vehicle weighs. Each property installing natural gas fuel dispensers could claim a credit up to $30,000 (or $100,000 — it’s unclear). Each maker of compressed or liquefied natural gas could claim a credit of 50¢ per gallon for every gasoline-equivalent gallon sold. With anywhere from 225,000 to 400,000 18-wheelers sold in the USA each year, the vehicle purchase credits alone could cost billions.
T. Boone’s lobbying for these tax subsidies is all about patriotism and energy security and has nothing to do with rent seeking or corporate welfare. Just ask him! “I’m sure not doing this for the money,” the Texas Gas Mogul told New York Times columnist Joe Nocera. [click to continue…]
The Wall Street Journal has a long piece today about the prospect of using the state to move part of the U.S. transportation fleet from oil to natural gas. It gives prominent voice to the massive public affairs campaign of T. Boone Pickens to add billions to his natural gas fortune as a swansong to a prosperous career.
This campaign takes the form of a bill embraced by ostensible fiscal hawks, causing an uproar from those conservatives who took umbrage at Members abandoning their pledges of fiscal sobriety at the drop of a billionaire’s phone call. This enabled the media to describe the Republicans’ ‘circular firing squad.’ Well played, gentlemen.
The vehicle was not Pickens’ first choice. His first choice was a windmill mandate, transparently pushed by a handful of gas interests, including Chesapeake Energy’s Aubrey McClendon, to put a green hat on their efforts to use the state to displace coal’s market. In this effort, they found natural allies in environmentalist special interests.
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