Among fiscal Republicans, including former Alaska Gov. Sarah Palin, energy subsidies are quickly becoming taboo. Palin recently went as far as to say that she's against all energy subsidies. (She's not however for ending the Big Oil tax breaks in the news recently). She's even against ethanol subsidies, an Iowa-sized third rail of such government give-aways. She's not alone among potential and actual GOP 2012 presidential candidates. Both Tim Pawlenty and Rick Santorum have refused to take the ethanol pledge.
It's a barometer of how much times have changed. This would have been unheard of during the last presidential election, when Sen. John McCain, a one-time anti-ethanol crusader, suddenly became an ethanol evangelist when it became clear he was going to make a White House run. But when he decided to not to campaign in Iowa for the caucus, he flopped again.
Republican U.S. Rep. Don Young, the contrarian congressman for the whole state, is again zipping where others are zagging. This time, he’s co-sponsored an energy bill that’s all about subsidies. Called the NAT GAS Act, the legislation, pushed heavily by natural gas booster T. Boone Pickens, would “encourage and reward manufacturers who produce natural gas powered vehicles.” Such encouragement would include tax breaks, and grants that would be available until 2016.
Young signed onto the bill because “it increases demand for and expands the market for natural gas, which can only be beneficial to Alaska,” his spokesperson Meredith Kenney said in an email statement. Further, Young believes that natural gas, unlike other alternative energy sources like wind and solar, could eventually survive without subsidies.
Would it help Alaska in its three decades-long dream of getting Alaska’s natural gas to market? “Everything helps,” said Larry Persily, the federal coordinator for Alaska’s pipeline, but the market’s so flooded with shale gas that it probably won’t make that much of a dent. “What’s going to help get Alaska’s gas to market is for the state to sit down with the producers and come up with a fiscal structure that works for both the state and the producers.” (In other words, everything old is new again.)
Pickens, who has huge investments in shale gas companies, has been pushing hard for this bill for years. Initially, the bill would dramatically expand the use of natural gas as a transportation fuel among heavy-duty truck fleets, including 18-wheelers and garbage trucks. Eventually Pickens believes that the tax credit plan would help promote providing the infrastructure, namely natural gas stations, necessary for affordable natural gas-powered vehicles. He writes:
Moving domestic natural gas into transportation and the 8 million heavy duty truck market can have a profound impact by cutting our OPEC oil dependency in half. The Obama administration has set its sights on electric cars… But, a battery won’t move an 18-wheeler. Neither will ethanol. The only current substitute for imported diesel is domestic natural gas.
The measure still has 187 co-sponsors in the House, with more than 100 Democrats on board. It’s recently losing support however. Four Republican House members took their name off the bill after the Club for Growth, Grover Norquist, the head of Americans for Tax Reform, and now members of the tea party, began to fight against the legislation.
Contact Amanda Coyne at amanda(at)alaskadispatch.com