Should We Subsidize Nat Gas Engines? - Real Time Insight
March 07 2012 - 9:39AM
Zacks
In early
2010, when I first read of the T. Boone Pickens' plan to subsidize
the conversion of 18-wheelers to run on natural gas I thought it
was a great idea. Clean-burning, abundant, cheap nat gas would be a
triple-crown winner for the environment, the economy, and new
industries, to say nothing of national energy security with less
dependence on the Middle East.
I thought
Boone was one of the more honest types in the energy patch for
having the guts to take this stand for our country when it could
just as easily hurt some of his petroleum investments. But
obviously, lots of other big oil guys would be hurt worse. In fact,
one of his buddies and fellow fossil-fuel billionaire, Charles
Koch, publicly slammed Boone for his plan.
But the
Wall Street Journal ran an editorial piece a couple of weeks
ago that challenged the man's plan as simply more corporate
welfare.
"Proponents
put the cost at about $5 billion over five years, but many energy
experts believe it would be multiples higher. Eight million trucks
are on the road today, and if each got a $15,000 average tax
credit, the price tag grows to over $100 billion.
The history
of energy subsidies is that they become an industrial and political
addiction that is difficult to stop, no matter the results, and may
even inhibit innovation and profitability by providing a
crutch."
My take is
that we've subsidized just about every other industry that needed
it or not. And this one seems like it's worth a try in some way, on
some level. I'm not for wasting money and creating dependent
industries that don't really serve broader objectives. The details
need to get hammered out and compromises will have to be
made.
The Journal
suggests letting free markets work their magic to eventually find
the best solution. I couldn't agree more because while Congress
fiddles and fights about it, American companies (and Norwegian
ones) will probably be busy selling the technology and
infrastructure to China and other markets. Why do you think
Cummins, the biggest maker of nat gas engines, already
does business in 190 countries?
So, should
we subsidize nat gas engines, or not? And why or why
not?
Cooker
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