- The Washington Times - Monday, May 23, 2011


America’s energy woes show what’s wrong when politicians intervene in the market. When government tilts the playing field to favor an industry, rivals want their own slice of the pie. As gasoline prices skyrocket, natural-gas backers sense an opportunity to grab a larger share of the fuel market and want lawmakers to climb aboard the “green” fuel express.

Exhibit A is the New Alternative Transportation to Give Americans Solutions Act, or NAT GAS Act. H.R. 1380 would give tax credits ranging from $7,000 for buyers of natural-gas-fueled autos to $64,000 for buyers of such trucks. Manufacturers would be eligible for a credit of $10,000 for each vehicle they build. Natural-gas producers would get a 50-cent-a-gallon tax credit, and station owners would get tax breaks when they install pumping equipment.

Natural gas offers some benefits. It’s clean, producing 30 percent lower emissions than gasoline; it’s abundant, with deposits large enough to last 100 years; and it can be cheaper than gasoline. It makes no sense for Congress to favor natural gas when it’s already a competitive product. That’s the view of Rep. Mike Pompeo, Kansas Republican, and Rep. Raul R. Labrador, Idaho Republican, who say the bill is “the perfect example of a federal policy that’s trying to identify and select a winner.” Energy heavyweights Charles and David Koch voiced agreement Friday that conservatives should oppose subsidies that distort markets, prompting a retort from oil and gas tycoon T. Boone Pickens, who backs the measure.

While favoritism in energy policy is nothing new, the cumulative effects of energy-market distortion have littered the headlines in recent years. Using corn for ethanol production has helped escalate food prices, up 36 percent globally this year. Tax credits for solar panels have stimulated the industry in low-cost China, driving manufacturers out of business in America. Much of the $3 billion from the “cash for clunkers” program wound up in the pockets of Japanese and Korean automakers. Massachusetts’ Cape Wind project has put Bay State utilities on the hook for pricey offshore wind-farm electricity.

Worst of all is President Obama’s chokehold on fossil fuels. By squeezing off oil drilling, he has driven up gasoline to $4 a gallon, cutting into the economic recovery and threatening the nation with a second recession. Democrats who believe fairness requires an end to tax breaks for the oil industry must admit it also means Mr. Obama should take his foot off the industry’s neck.

Rather than worsen market distortion with favors for natural gas, lawmakers should join in a bipartisan move to let the collective wisdom of tens of millions of consumers select the best energy products.

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