Natural-gas tax fight between Koch, Pickens reaches Senate floor

A looming Senate vote on providing tax credits for natural-gas-powered vehicles will test the political sway of conservative groups that are fighting against the measure.

The Senate will vote as soon as Thursday afternoon on an amendment to highway funding legislation that’s aimed at expanding use of natural gas as a transportation fuel, especially in the oil-thirsty heavy-trucking industry.

The amendment from Sen. Robert Menendez (D-N.J.), which requires 60 votes for passage, mirrors a bill he sponsored with Senate Majority Leader Harry Reid (D-Nev.) and Sen. Richard Burr (R-N.C.).

The idea of using the tax code to spur conversion of trucking fleets has support from many Democrats and Republicans, and enjoys some powerful backers.

They include billionaire energy magnate T. Boone Pickens, Reid and President Obama, who touted his own natural-gas vehicles plan in a Wednesday speech. (A White House spokesman couldn’t be reached for comment on the Senate proposal specifically.)

But groups influential in GOP circles including Heritage Action (an arm of the Heritage Foundation), the Club for Growth, Americans for Tax Reform and Americans for Prosperity have long been battling the natural-gas plan.

It was introduced as standalone House and Senate legislation in 2011. Pickens last year criticized Koch Industries, which is helmed by billionaire brothers active in conservative causes, for its opposition.

The Koch-founded Americans for Prosperity, in a “legislative alert” to senators Thursday, calls the amendment “yet another attempt by government to pick winners and losers in the energy market, an approach that has proven ineffective.”

And several groups are circulating a joint letter to senators opposing the amendment that calls out Pickens by name.

“Pickens ‘needs’ the NAT GAS Act because he won’t make even more billions from his natural gas-related investments unless Congress, via tax preferences, ramps up demand for natural-gas vehicles and infrastructure,” states the letter to lawmakers from Americans for Prosperity, the Club for Growth, Freedom Action, Heritage Action and the Competitive Enterprise Institute.

It notes that natural-gas prices are at very low levels and that major companies are already moving ahead with natural-gas-powered transportation investments.

“The goals of the NAT GAS Act are being achieved by the free market without the additional government involvement mandated by the NAT GAS Act,” states the letter, obtained by E2.

A spokesman for Pickens said he’s monitoring the amendment closely.

Pickens touted the natural-gas bill in a letter to The Wall Street Journal this week.

“There are about 8 million heavy trucks in the U.S. If we moved all of them from burning diesel to running on natural gas tomorrow, we would reduce imports by 3 million barrels a day. At $105 per barrel, that’s $315 million per day we can recycle into the U.S. economy rather than sending it to Venezuela and Saudi Arabia,” he writes.

The consulting firm ClearView Energy Partners, in a note circulated early Thursday morning, called Senate passage of the natural-gas vehicles plan “unlikely … given opposition by fiscal conservatives.”

The Senate will also vote on a competing amendment authored by Sen. Jim DeMint (R-S.C.) that would repeal a suite of tax credits for green electricity, plug-in cars and renewable transport fuels, as well as some for oil-and-gas companies, while applying the savings to a commensurate cut in the corporate tax break.

The dueling votes are just two of several that are coming on energy-related amendments to the highway bill. 

They include amendments to approve construction of the Keystone XL oil sands pipeline, mandate a major offshore oil-and-gas leasing expansion, delay and soften EPA air pollution rules for industrial boilers, extend tax credits for green power projects and others.