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Karl W Miller
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  • Proposed Natural Gas Act: Dead on Arrival in Washington 0 comments
    Jul 26, 2011 6:39 PM | about stocks: LNG, CHK, KMI, WMB, SUG, SD, SWN, RRC, HK, BHP, OXY, APA, APC, EOG, MRO, BP, COP, XOM, CVX
    • As Mr. Miller has advised numerous times, government handouts do not work, never have, never will. The capitalist markets must make investment decisions based upon supply, demand, price points and other factors.

      Natural Gas is no different; Producers can't "jam natural gas" down the consumers throat by forced consumption, media blitzes, and government taxes (subsidies on natural gas vehicles, etc), Especially as the U.S. has virtually zero transportation infrastructure, as it is not economical to construct without massive subsidies.

      Boone Pickens has had the unfortunate virtue of promoting multiple energy plans, from Wind, Natural Gas, Trucking Fleets, all of which have failed miserably. Pickens and Chesapeake Energy announcements that they have essentially teamed up to spend a Paltry $1 billion to promote natural gas as a transportation fuel, is but a pittance and all for naught without the passage of a "massive federal subsidy" call the Natural Gas Act.

      Mr. Miller has advised that the Natural Gas Act is Dead on Arrival, much like the ill fated Cap and Trade proposal.

      _______________________

      What is the Natural Gas Act?

      The essential elements of the failed "Pickens Plan" were incorporated into the New Alternative Transportation to Give Americans Solutions Act, or the NAT GAS Act, which was introduced by groups of senators and representatives in the previous two Congresses. The legislation would jump-start the use of natural-gas-powered heavy-duty trucks by giving tax incentives to purchasers and manufacturers of natural-gas-powered vehicles.

      A bill promoting natural gas vehicles was first introduced in 2008 by archconservative Sen. James Inhofe (R-OK). The first NAT GAS Act was soon introduced by bipartisan coalition including Senate Majority Leader Harry Reid (D-NV) and conservative champion Tom Coburn (R-OK). There was little conservative opposition to this bipartisan proposal until very recently.

      Chief among those who are pushing conservatives in Congress to drop their support for the NAT GAS Act are the Koch brothers. Charles Koch has been loudly vocalizing his opposition to the “misguided suggestion that the natural-gas industry should receive enormous new subsidies.”

      Rep. Mike Pompeo (R-KS), a freshman in Congress who was the top recipient of Koch-related money in the 2010 elections, has been leading the conservative attacks against the NAT GAS Act. Rep. Pompeo maintains that he is opposed to “using taxpayer dollars to support targeted interests within the energy sector” despite his vote to protect billions in federal subsidies for Big Oil.

      The new efforts to oppose the NAT GAS Act are paying off, convincing co-sponsors to take the unusual step of publicly withdrawing their support for a bill that they previously cosponsored. Reps. Tim Griffin (R-AR) and Glenn Thompson (R-PA) withdrew their names as sponsors on May 26, joining Reps. Todd Akin (R-MO) and Steve Pearce (R-NM), who dropped their backing earlier in the month. Rep. Thompson had also been a co-sponsor of the 2009 version of the bill.

      The chart below lists the organizations oppose investments in natural gas vehicles, their statements against "subsidies" for natural gas and the proliferation of "Fracking".

      Groups that support Big Oil loopholes and oppose natural gas vehicles

      Oil industry support

      On subsidies for Big Oil

      On the NAT GAS Act

      Americans for Prosperity

      David H. Koch Charitable Foundation $1,000,000

      Americans for Prosperity opposes any changes in the tax code that target specific industries for tax increases because some people don't like their product or profit.”

      “Americans for Prosperity opposes the use of the tax code to promote the use of natural gas as a vehicle fuel or to subsidize the purchase of natural gas vehicles. If natural gas is a worthwhile fuel source it should prove itself in the marketplace, not be handpicked by industry lobbyists and DC politicians.”

      Americans for Tax Reform

      Sarah Scaife Foundation $375,000

      Carthage Foundation $325,000

      “Oil and natural gas companies receive no subsidiesthe government doesn’t pay these companies a cent to produce oil. Every deduction or credit S. 940 proposes to revoke or limit has a specific purpose common throughout the tax code.”

      “Congress and regulatory agencies have piled on rules and regulations in an attempt to nudge, or force, Americans to use lawmakers’ preferred energy sources.”

      Competitive Enterprise Institute

      Exxon Mobil $1,690,000

      Sarah Scaife Foundation $2,865,000

      David H. Koch Charitable Foundation $315,000

      “Whether the depreciation allowance tax is good tax policy is one thing. But it does lower the cost of producing oil. If you raise the price of production, that increase would be passed on to somebody. He [President Obama] is desperate to blame somebody else. He is unwilling to say that’s how supply and demand operates, so he just shifts the blame to the oil companies because they are the easiest target for political demagoguery in the world.”

      “Providing subsidies for every aspect of natural gas-fueled vehicles will only lead to a bloated industry of little help to energy consumers. Washington is no match for the free market when it comes to determining the most promising energy sources.” – Open letter to Congress, May 24, 2011, signed by CEI Senior Fellow Malco Lewis.

      The Heritage Foundation

      Exxon Mobil $385,000

      Charles G. Koch Charitable Foundation $78,000

      Ending all energy subsidies, including those for oil and gas, would be good for American taxpayers and consumers. However, Congress should not punish the oil and gas industry with targeted tax hikes, nor should it reward other parts of the energy industry favored by the Administration.”

      “Subsidies funnel money toward projects that have little market support and offset the private-sector costs for investment that would have been made either way. … the fact that other transportation fuels receive government support is not a good reason to continue or expand special treatment for natural gas.”

      60 Plus Association

      “The 60 Plus Association … has spent close to $600,000 on such television spots. … the ads are part of a greatly expanded national role for the group … benefiting from what Republican sources describe as an influx of funds from the billionaire brothers, David and Charles Koch.” - Politico, October 15, 2010

      “It is absolutely mind boggling that President Obama and the Senate Democrats are seeking to raise taxes and make U.S. industry less competitive in this atrocious economic climate where millions cannot find work. But oil companies make an easy target and divert attention away from the fact that Obama’s energy policies are directly contributing to over $4 a gallon gasoline.”

      “Tax incentives like these allow government to decide which energy sources thrive or fail—and thereby distort the market. America’s experience with a number of similar energy subsidies dating back to the 1970s has shown that businesses benefiting from these incentives become reliant on government handouts in order to stay in business, causing the price of the subsidy to rise over time and leaving taxpayers to support industries for decades.” – open letter to Congress, May 23, 2011, signed by 60 Plus Association Chairman Jim Martin.

      Representatives who support Big Oil loopholes and oppose natural gas vehicles

      Oil industry campaign contributions

      On subsidies for Big Oil

      On the NAT GAS Act

      Rep. Todd Akin

      (R-MO)

      $47,750

      Voted against rolling back taxpayer subsidies for Big Oil on March 1. Voted in favor of the GOP budget, which retained $40 billion in Big Oil tax loopholes on April 15. Voted against legislation to prohibit the Big Five oil companies from receiving tax breaks for domestic manufacturing on May 5.

      Withdrew co-sponsorship of the NAT GAS Act in May 2011.

      Rep. Tim Griffin

      (R-AR)

      $136,459

      Voted against rolling back taxpayer subsidies for Big Oil on March 1. Voted in favor of the GOP budget, which retained $40 billion in Big Oil tax loopholes on April 15. Voted against legislation to prohibit the Big Five oil companies from receiving tax breaks for domestic manufacturing on May 5.

      “I am concerned that H.R. 1380 might be inconsistent with my goal of simplifying the tax code by lowering the overall tax rate and simultaneously ending industry-specific incentives.” Withdrew co-sponsorship of the NAT GAS Act in May 2011.

      Rep. Raul Labrador

      (R-ID)

      $4,000

      Voted against rolling back taxpayer subsidies for Big Oil on March 1. Voted in favor of the GOP budget, which retained $40 billion in Big Oil tax loopholes on April 15. Voted against legislation to prohibit the Big Five oil companies from receiving tax breaks for domestic manufacturing on May 5.

      “Energy subsidies do two things—they distort the market, leading the private sector to invest in less economical forms of energy, but most importantly, number two, they take taxpayer dollars to do this.”

      Rep. Steve Pearce

      (R-NM)

      $1,218,192

      Voted against rolling back taxpayer subsidies for Big Oil on March 1. Voted in favor of the GOP budget, which retained $40 billion in Big Oil tax loopholes on April 15. Voted against legislation to prohibit the Big Five oil companies from receiving tax breaks for domestic manufacturing on May 5.

      Withdrew co-sponsorship of the NAT GAS Act in May 2011.

      Rep. Mike Pompeo

      (R-KS)

      $291,156

      Voted against rolling back taxpayer subsidies for Big Oil on March 1. Voted in favor of the GOP budget, which retained $40 billion in Big Oil tax loopholes on April 15. Voted against legislation to prohibit the Big Five oil companies from receiving tax breaks for domestic manufacturing on May 5.

      “What we don’t need to do is use our tax code to subsidize them [energy sources] and pick them and favor them.”

      Rep. Glenn Thompson

      (R-PA)

      $100,572

      Voted against rolling back taxpayer subsidies for Big Oil on March 1. Voted in favor of the GOP budget, which retained $40 billion in Big Oil tax loopholes on April 15. Voted against legislation to prohibit the Big Five oil companies from receiving tax breaks for domestic manufacturing on May 5.

      “My support of this act was conflicting with my desire to simplify the tax code.”

      Withdrew co-sponsorship of the NAT GAS Act in May 2011.

       

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