Senate rejects natural gas subsidy

As part of a deal to move the long-awaited, and much-needed highway bill forward, the U.S. Senate spent much of Tuesday voting on amendments to the bill under an agreed-upon 60-vote provision. That provision, which required 60 “Yes” votes to attach any amendment to the bill rather than a simple majority, has cost natural gas proponents a bit of momentum.

One of the amendments, co-sponsored by Robert Menendez (D-NJ), would have provided subsidies for nearly everything natural gas, from purchasing commercial vehicles running on the fuel, to building the needed infrastructure. The bill had the support of T. Boone Pickens, who is an investor in Clean Energy Fuels, which is planning a massive natural gas “highway” crossing the U.S.

“ If you vote against this amendment, you cannot go home and tell your constituents that you have done everything you can to reduce (gasoline) prices,” Reuters reported Menendez said during debate on the amendment.

The amendment was rejected 51-47.

Natural gas is a hot fuel choice at the moment, and OEMs are working hard to make vehicles powered by the fuel. Clean Energy is planning to build more than 150 fueling stations along major highways. That infrastructure is slowly growing and is what is needed to help advance the national gas movement.

Proponents of the bill, which would have placed a user fee on the fuel to pay for the subsidies, have said natural gas is a viable domestic fuel that is readily available and would reduce our dependence on foreign oil.

Opponents, though, which include energy conglomerate Koch Industries, have said that the fuel should stand on its own and be propped up by the government.

“If natural gas vehicles are truly advantageous and economically efficient, then consumers will demand that they be developed without political mandates that exhaust more taxpayer dollars,” Richard Fink, Koch executive vice president, said in a statement.

Supporters of the bill have said they will continue the fight and hope to include it in future legislation. Opponents argue that there is no evidence that the user fee would pay for the subsidies.

 I’m a believer in the supply-and-demand aspect of a free market economy – if a product is good enough, it will succeed. However, if our goal as a country is to wean ourselves off foreign oil, we need to find alternative vehicle power sources – sources that can include electricity, propane, and yes, even natural gas. When price is a consideration for any product, the old standby always has an advantage because of economies of scale. If natural gas is not given the opportunity to generate enough scale to be priced competitively on its own, we may never know whether it is a long-term solution to our energy needs.

The 51 votes the amendment received indicates that there may be enough interest to get a bill passed and make this program – or some similar program – a reality in the not-too-distant future. Some will continue to bring up the argument that Fink has, but the reality is we provide government support in many different forms for all types of products and energy sources. Just ask Big Oil about its government tax breaks.

At least this plan had the potential to pay for itself and not cost taxpayers a dime. Isn’t that what our politicians are preaching these days?

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