The T. Boone Pickens backed Natural Gas Act has a “real chance” of finding its way through Congress and on to the President’s desk by Memorial Day, according to Congressman Dan Boren, the bill’s author.
And while the act is not likely to be a part of a major energy overhaul, according to Congressman Boren, it’s likely it will get tucked into a jobs bill or another catch all piece of legislation before the end of May.
The Natural Gas Act includes provisions to increase the use of gas amongst government and private consumers. The goal, according to the Congressman, is to, “make sure we have a demand for natural gas.”
Part of the problem with the natural gas market is that demand growth is low. Traditional sources, like the industrial sector and electricity production have low demand growth, 1.2% and 1.8% respectively. The real opportunity for growth is in fuel for automobiles where natural gas is hardly used.
That being said — while it’s alluring and cheap — the lack of infrastructure is a huge problem.
Without an increase in demand, companies will find it hard to make a profit in 2 to 3 years, according to the Congressman.
That is also true for T. Boone Pickens, whose investments in natural gas include his Clean Energy Fuels Corp., which is the “largest provider of natural gas for transportation in North America,” according to its website.
The Natural Gas Act includes specific provisions for the promotion of sale of natural gas and natural gas powered vehicles:
- By increasing the lifetime of the Alternative Fuel Credit and including compressed natural gas and liquefied natural gas as fuels
- Providing tax credits for the purchase of natural gas vehicles
- Defining natural gas vehicles as alternative fuel vehicles
- The lesser of $4000 or 10% of manufacturing cost in credit to the manufacturer for the production of a natural gas powered vehicles
- Including natural gas in the scope of alternative fuel stations eligible for a tax credit
- The lesser of $100,000 or 50% of the cost of building a natural gas refueling station as a tax credit to the taxpayer
- Requirement that 50% of the federal government’s new fleet vehicles by 2014 be operational on natural gas
- Up to $30 million in Energy Department grants to natural gas vehicle developers yearly
Clean Energy Fuels Corp. produces natural gas, converts automobiles which run on traditional gasoline to natural gas, manages fleets of natural gas vehicles, and, “designs, builds, operates and maintains natural gas fueling stations.”
Democratic Rep. John B. Larson and Republican Rep. John Sullivan, two sponsors of the Natural Gas Act, have received campaign donations from Clean Energy Fuels Corp. of $6,250 in 2010, according to OpenSecrets.org.
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