Just a little over a month ago, we reported that House Republicans on the Ways and Means Committee had called off a hearing on a natural gas boondoggle that would have lined the pockets of T. Boone Pickens and George Soros with taxpayer dollars. We were proud of the GOP for taking a step back and reconsidering a plan that could have been an unqualified disaster as government funds were directed not to programs that would assist in the development of market-friendly alternative fuels, but would have forced demand- and supply-side subsidies for natural gas, creating an unstable and unnatural market.
This week, unfortunately, House Ways and Means leadership has placed these energy subsidies and “tax credits” back on the agenda.
On April 6, 2011, Rep. John Sullivan (R-OK) introduced H.R. 1380, the New Alternative Transportation to Give Americans Solutions (NAT GAS) Act of 2011. The bill currently has 184 bipartisan cosponsors, although a number of Members of Congress have removed their names as cosponsors. Referred primarily to the Ways and Means Committee, H.R. 1380 includes tax credits related to compressed and liquefied natural gas (CNG and LNG), including credits for the fuels themselves, credits for the purchase and production of vehicles powered by CNG and LNG, and credits for refueling property related to CNG and LNG. Whether such credits represent good energy policy or an intrusion into the free market has been the subject of vigorous debate.
In announcing the hearing, Chairman Tiberi said, “Energy security and comprehensive tax reform are two of the most important priorities we can pursue to create jobs and ensure the long-term strength of the U.S. economy. As the committee with jurisdiction over energy tax policy, the Ways and Means Committee should examine whether there sometimes can be tension between these priorities, and how this Committee can design tax policies that achieve our energy security goals while also staying true to the principles of simplicity, fairness, and growth that drive the Committee’s tax reform agenda.”
Anyone paying attention to Big Government would know the “tax credits” contained within this act are only tax credits because Congress chooses to define them as such. These tax credits are really heavily disguised taxpayer subsidies, doled out to people who choose to make radical, impulse decisions about which engines they put in their large vehicles without considering the long term effects of their actions. One Washington report explained the bait-and-switch rather nicely:
An item that’s technically legislation, not regulatory rulemaking, but stands to pack the same economically ruinous punch is the NAT GAS Act (H.R. 1380) which heavily subsidizes businesses and consumers who switch to natural gas-fueled vehicles directly benefiting billionaires T. Boone Pickens and George Soros at the taxpayers’ expense. The subsidies – ahem, ‘tax credits’ – come in at a whopping $7,500 per passenger car, $64,000 for heavy-duty trucks and 18-wheelers, and up to $100,000 for gas stations installing natural gas pumps.
The legislation would, of course, create an artificial demand for natural gas, which some enterprising company would be called upon to fill. Texas energy magnate T. Boone Pickens owns just such a company:
As the Dallas News reports, Pickens is the largest shareholder in Clean Energy Fuels (CEF), which owns and operates 200 natural gas stations across the country. CEF owns BAF, a Dallas-based company that just happens to convert vehicles to run on natural gas. And Mr. Pickens also owns mineral rights to almost 200,000 acres believed to have significant natural gas resources.
Convenient. But as Big Government has pointed out before, there is a more sinister partner in the deal to create an artificial market for natural gas: progressive billionaire and mover-and-shaker George Soros, who has been quietly buying up shares in alternative fuel companies that produce engines that run on natural gas – the kind of engines that those who chose the “tax credit” for retrofitting their vehicles to run on natural gas would need. George Soros has gone so far to buy 5.5 million shares of Westport Innovations, the world’s leading manufacturer of natural energy “solutions” – natural gas engines for commercial vehicles, exactly the sort this legislation would serve to promote. Many Wall Street analysts were utterly perplexed by Soros’ decision to invest in Westport, given that nearly no other major investors targeted Westport as a good buy.
Obviously, it should be clear to House Republicans that their decision to “support alternative fuels” and grant “tax breaks” to companies they feel are “doing good for the environment” and building American industry is based on some shaky ground. Considering and passing the Nat Gas act would be a mistake, particularly considering how closely taxpayers are watching Congressional action. Support for these subsidies is tepid at best within their own ranks, and non-existent in the American population who are increasingly concerned with every dollar Congress doles out. When this hearing takes place on Thursday, it would behoove members of the Ways and Means committee to seriously consider the results of their actions, and understand fully what these facial “tax cuts” and “subsidies” are doing to the larger economy and to the pocketbooks of people with their own self-interest as a priority.