Conservatives Should Oppose NAT Gas Act


Posted by Chris Prandoni on Tuesday, November 29th, 2011, 2:51 PM PERMALINK


This article was originally printed by the Washington Times.

Flooded with grant money, compelled by mandates and burdened by regulations, America’s energy sector is a convoluted mess. Government intervention has turned this market upside down. Now, Republicans and Democrats are eyeing the NAT GAS Act - legislation that would further muddy the water.

The New Alternative Transportation to Give Americans Solutions Act, or “NAT GAS Act,” would allow consumers purchasing natural gas vehicles or investors developing natural gas refueling stations to claim between $5 billion and $9 billion in federal tax credits over the next five years. Rep. John Sullivan, Oklahoma Republican, introduced the bill in the House, and Sen. Harry Reid, Nevada Democrat, and Sen. Robert Menendez, New Jersey Democrat, are championing the bill in the Senate.

When the NAT GAS Act was introduced in the House, a substantial number of Republicans threw their weight behind it out of an inherent tendency to support natural gas and a bit of group-think. Once Republicans took a step back and reflected on the broader implications of the act, they began dropping off the bill in droves - 19 Republican co-sponsors have pulled their support.

Republicans’ knee-jerk reaction to natural gas is “we need more,” and for good reason. It is cheap, abundant and efficient. The left has waged a war on America’s natural gas producers in an attempt to inhibit production at every turn. Decrying hydraulic fracturing, the politicized Environmental Protection Agency and congressional Democrats are attempting to regulate the 60-year-old practice out of existence. State legislatures are looking to tax natural gas extraction, thereby limiting economic growth and potential job creation.

Unfortunately, the NAT GAS Act does nothing to facilitate natural gas production or alleviate many supply-side concerns conservatives have. This explains why so many House Democrats have co-sponsored the House bill and why Mr. Reid introduced the legislation in the Senate. Instead, the NAT GAS Act gives certain natural gas consumers an advantage over other natural gas consumers - effectively skewing the market, inflating natural gas consumption and potentially driving up the cost of natural gas.

Furthermore, there is no market failure in need of correction. UPS and other shipping companies already have substantial natural gas fleets without the NAT GAS Act. There is no denying that America’s energy policy is distorted and riddled with preferences. But free-market conservatives looking to remedy this problem should begin peeling away the government’s consumption mandates and tax policies, not piling on more rules. Of course, repealing existing tax credits or deductions must be done in a revenue neutral way - the last thing Republicans want to do is to help fund President Obama’s supersized government.

Rep. Mike Pompeo, Kansas Republican, has introduced the Energy Freedom and Economic Prosperity Act - modeled after President Reagan’s 1986 tax reform - which repeals a handful of energy tax credits and lowers the corporate tax rate by an equivalent amount. Conservatives looking to clean up America’s energy market and tax code should follow Mr. Pompeo’s lead, not Mr. Reid‘s.

T. Boone Pickens and 220 businesses have thrown their weight behind this legislation and are busy lobbying Congress to pass it. Fixing the tax code and restoring market forces to our energy sector is an uphill battle for Republicans, but one that should begin with opposition to the NAT GAS Act. 

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