‘NAT GAS Act’ needed, former Bush economist says
Mike Soraghan, E&E reporter
A former George W. Bush administration economist today said tax benefits are needed to help convert the nation’s truck fleet to natural gas.
“Once you have a technology in place, it’s very hard to make a change,” said Lawrence Lindsey, who now has an economic advisory firm in northern Virginia.
Lindsey was the chief economic adviser to George W. Bush’s 2000 presidential campaign and then served as director of the National Economic Council in the Bush White House. He departed after estimating a higher cost for the Iraq War — $200 billion — than other top administration officials.
Lindsey addressed a joint hearing of two House Ways and Means subcommittees held to discuss the role of energy tax incentives in the overall tax code.
The hearing by the subcommittees on Select Revenue Measure and Oversight comes as full committee Chairman Dave Camp (R-Mich.) has directed the panel to investigate how comprehensive tax reform would affect certain sectors of the economy.
The hearing comes as lawmakers on both sides of the aisle and other interest groups in Washington have questioned the practice of advancing certain energy sectors through the use of the tax code.
As the hearing began, Democrats attacked oil and gas tax credits as unneeded subsidies for an industry enjoying huge profits while ordinary citizens suffer. Republicans criticized clean energy tax benefits for failing to help the economy and encouraging tax fraud.
President Obama has proposed ending tax advantages for oil companies as a way to help fund his jobs program. Republicans are pointing to the unraveling of a solar firm, Solyndra, as a symbol of failure of Obama’s2009 stimulus plan.
But the hearing also focused attention on legislation that would grant tax credits to buyers of natural gas vehicles and incentives for manufacturers and suppliers who support natural gas. Embodied in a bill introduced this spring by Rep. John Sullivan (R-Okla.), H.R. 1380 is called the “New Alternative Transportation to Give Americans Solutions Act of 2011,” commonly abbreviated as “NATGAS.”
The bill is supported by Democrats and many Republicans, but it has been attacked by conservative organizations such as the Heritage Foundation and the Club for Growth.
“The same misguided principles behind the decision to spend taxpayer dollars on Solyndra are the foundation for the NATGAS Act,” said Club for Growth President Chris Chocola. “There’s nothing wrong with producing vehicles that run on natural gas, but if the market exists for NGVs, then consumers will buy them and should not be forced into subsidizing them. Market-distorting subsidies for unproven technologies are poor policy whether they are done by Republicans or Democrats.”
But Lindsey said that the subsidies would fix a specific problem: that people won’t buy natural gas-fueled trucks because there is no easy way to fuel them, while fuel suppliers won’t develop a fueling system because there are not enough vehicles that use natural gas.
He compared it to computer keyboards, which use “QWERTY” keys because that is what most people have learned to type on even though there are better designs.
“We have to break that qwerty problem,” Lindsey said.