Why Can't Congress Pass GAS?
Congress might be full of hot air, but that’s not what I am talking about. For years now there has been a grassroots effort underway to get what is now known as the NAT GAS Act through congress. The NAT GAS Act, which is short for New Alternative Transportation to Give Americans Solutions Act, would provide tax incentives to encourage the use of natural gas as a transportation fuel. The bill, which has broad bipartisan support of more than 175 co-sponsors, would create jobs while cutting greenhouse gases and enhance our national security by helping to cut our demand on foreign oil. In the words of Michael Scott from The Office this would be a “Win, Win, Win” solution.
The act, however, is not without its detractors. On the left side of the argument you have those concerned that this will help to further proliferate the extraction process known as “fracking.” On the right side you have some who see this as nothing more than crony capitalism as some very well connected investors -- among them T. Boone Pickens -- betting heavily that this act will pass. Not to mention the press’ general disdain for the profits of big oil; this act would be giving a tax break that would indirectly benefit big oil or, in this case, gas.
It’s Boone Pickens and his Pickens Plan that have been the main engine behind getting the NAT GAS Act to Congress. He’s invested much of his personal fortune in shifting America’s energy policy to gas. This is seen both ways -- he’s either putting his money where his mouth is or he is undertaking one of the biggest lobbying campaigns in history to boost his own personal wealth. For those who have followed the Pickens Plan since its launch, he seems very genuinely concerned for the good of the country. Here is his latest video to plan followers:
That being said, if the NAT GAS Act does pass there are several companies that will directly benefit. Both Clean Energy Fuels (NASDAQ: CLNE) (which Pickens helped to found) and Westport Innovations (NASDAQ: WPRT) are actively engaged in building out the infrastructure and supply chain of natural gas as a transportation fuel. Clean Energy builds and operates natural gas fueling stations and is currently building out America’s Natural Gas Highway with the help of E&P companies like Chesapeake Energy (NYSE: CHK), which recently become an investor in Clean Energy in order to help them fund this build out. Westport, which helps convert diesel engines to natural gas, is a first mover in this space and has strategic partnerships with major industrial manufactures like Cummins and Caterpillar.
In Southwestern Pennsylvania, all you hear about these days is the Marcellus Shale and the game changing potential it has for our region. A growing economic concern is that this shale play and others like it around the country are so plentiful that they will eventually lower the price of gas to the point where drilling doesn’t make economic sense anymore. Still, this area is becoming a regional headquarters to a who’s who of energy companies with Royal Dutch Shell (NYSE: RDS-A) and Chevron (NYSE: CVX) the latest entrants after recently making large strategic purchases of local E&P companies.
The NAT GAS Act would do much to alleviate the price concern by creating another demand driver to overturn the current supply imbalance. With regular unleaded gas prices spiking over the past several weeks and whispers of $5 gallon gas this summer, it's frustrating to know that the answer lies just under our feet. If we could use our vast resources to shift to a cheaper, cleaner, greener transportation fuel for our fleet of vehicles we’d be on the pathway to prosperity as a country. The ripple effects throughout our economy are truly breathtaking. Here in PA we are seeing the trickledown of new hotels being built, new restaurants springing up and lots of Texas license plates driving around on our roads.
We have the ability to inject some gas on the smoldering flickering flame of our economic recovery and really set ourselves up for explosive growth. We can create hundreds of thousands of jobs not just in the energy industry but in the manufacturing and service industries as well. All it takes is for Congress to take a stand and pass GAS.
