States Eye Natural Gas Vehicles

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Utah Governor Gary Herbert has signed two new bills into law aimed at increasing the use of energy efficient and natural gas vehicles. During the signing, the Governor said the new laws would help the state improve air quality.

The first bill will provide income tax credits for those who purchase heavy-duty natural gas powered trucks. The second bill creates a grant program to convert vehicles to energy efficient systems. An existing set of tax credits for alternative energy vehicles was also extended.

Oklahoma Governor Mary Fallin also signed a similar package of legislation late last week. One bill will allow for no-interest loans to counties that purchase natural gas vehicles for state fleets. Financing will also be provided for conversion of existing vehicles to natural gas.

The second bill requires the Oklahoma Department of Labor to adopt existing standard measurements for compressed natural gas (CNG) and liquefied natural gas (LNG). This legislation is the follow up to a bill passed in Oklahoma last year that brought oversight of natural gas vehicles under the oversight of the Department of Labor.

Fallin has been pushing for broader use of CNG since 2011. Her efforts coincide with those of another prominent Oklahoman – T. Boone Pickens. Pickens has been lobbying states and the federal government to adopt natural gas vehicles for years. He argues that natural gas vehicles reduce the dependence on foreign oil. The adoption of natural gas vehicles, however, has been slow, and recent drops in diesel fuel prices alongside efficiency improvements in diesel vehicles, have made it more difficult for advocates of natural gas.

Not surprisingly, lobbying has also had an impact. In Texas, where natural gas represents a significant component of the local energy economy, two bills aimed at increasing the adoption of natural gas vehicles have stalled in the legislature, after successful lobbying from the super PAC backed by Koch Industries.  The bills had the support of the local oil and gas industry, as well as a variety of community stakeholders.

According to a story in the Texas Tribune, Koch argued that:

Natural gas prices could rise if Texas drastically expanded demand for the fuel. That could be bad news for Koch’s large refiners, which run on the fuel.

“Koch Industries was among a number of businesses that opposed the legislation on the basis that it would have introduced another subsidy paid for by Texas taxpayers,” Ken Spain, a Koch spokesman, said in an email to the Tribune. “Koch companies support open and free markets and have consistently opposed any and all subsidies, even those we currently benefit from.”

The story also notes that Representative Todd Hunter (R-Corpus Christi) chairman of the Calendars Committee, which sets the agenda on the House floor, was previously a lobbyist for Koch and Flint Hills Resources a subsidiary. Hunter received $26,000 from Koch PAC.

Other members cited concerns that Pickens was behind the bills. Pickens agenda for natural gas vehicles is called the “Pickens Plan,” and includes policy goals.  According to the Texas Tribune, Pickens contributed $136,000 to Lt. Governor Dan Patrick’s campaign. Patrick initially championed the bills as part of his energy agenda.