Nat Gas Act is no boon­dog­gle

Back­ing nat­u­ral gas is es­sen­tial for na­tional se­cu­rity

The Washington Times Daily - - Opinion - By R. Em­mett Tyrrell Jr.

The other day, the es­timable Wall Street Jour­nal ed­i­to­rial board took is­sue with the equally es­timable T. Boone Pick­ens, the leg­endary oil­man, over the Nat Gas Act. The Jour­nal ar­gued with its cus­tom­ary lu­cid­ity that Mr. Pick­ens’ idea of sub­si­diz­ing nat­u­ral gas, even for a short pe­riod, was ill-ad­vised. To my mind, the Jour­nal left one ar­gu­ment out, to wit: na­tional se­cu­rity.

The Jour­nal ar­gued that nat­u­ral gas could be sup­plied ac­cord­ing to free-mar­ket prac­tices, pre­sent­ing clean and cheap en­ergy even to those be­he­moth 18-wheel semis that carry their loads across Amer­ica. It ar­gued that talk of en­ergy in­de­pen­dence had led to nu­mer­ous boon­dog­gles for years. Ethanol had been tried for 30 years, cost $40 bil­lion and still is cost­ing us. It ar­gued that wind and so­lar had cost huge amounts and con­trib­uted mostly to boon­dog­gles or “Boone-dog­gles,” as it head­lined its piece. It ar­gued that no sub­si­dies had been nec­es­sary for Henry Ford to build the first Model T, nor were sub­si­dies nec­es­sary to put gas sta­tions across Amer­ica for ser­vic­ing the Model Ts.

Yes, well, let’s stop right there. Amer­ica ex­isted in the first part of the 20th cen­tury in an en­tirely dif­fer­ent world than ex­ists to­day. There were no ter­ror­ists ca­pa­ble of killing us. Oil came mostly from Texas or Ok­la­homa, much friend­lier and more sta­ble places than the Mid­dle East, Venezuela or Rus­sia.

We now im­port some 50 per­cent of our oil. We are at the mercy of con­di­tions that are usu­ally out of our con­trol. If we were to have nat­u­ral gas fu­el­ing our 18-wheel­ers, we would be back in con­trol. Ac­tu­ally, we could re­sume ship­ping en­ergy abroad. In re­cent years, we have found nat­u­ral gas in abun­dance right here in Amer­ica. Through tech­no­log­i­cal de­vel­op­ments such as hy­draulic frac­tur­ing we have un­locked more en­ergy than ex­ists in all of Saudi Ara­bia. Let Iran or a gang of ter­ror­ists close down the Strait of Hor­muz. We are still se­cure.

The Nat Gas Act now pend­ing be­fore Congress will ex­tend and in­crease tax cred­its for nat­u­ral gas and for fu­el­ing. The key clause calls for the or­derly re­place­ment of diesel-pow­ered 18-wheeler semis and other heavy-duty ve­hi­cles with nat­u­ral gas over a five- to seven-year pe­riod. It also gives tax in­cen­tives to truck-stop own­ers to sup­ply nat­u­ral gas. That will amount to a sav­ings of 2.5 mil­lion bar­rels of oil a day. Our reliance on oil from the Or­ga­ni­za­tion of Petroleum Ex­port­ing Coun­tries (OPEC) will be cut by 50 per­cent. Mr. Pick­ens calls this “a game changer.” With our reliance on OPEC down by 50 per­cent, the oil pro­duc­ers will have to ne­go­ti­ate with us for the price they charge us for oil, not the other way around. What is more, we will have a breath­ing spell dur­ing which to find al­ter­na­tive sources of en­ergy. That breath­ing spell could last a cen­tury or more. There is that much nat­u­ral gas right here in Amer­ica. Fi­nally, the en­ergy sec­tor of our econ­omy can and will pro­duce thou­sands of high-qual­ity jobs.

The way to jus­tify the Nat Gas Act is via na­tional se­cu­rity. Amer­i­can pres­i­dents since Jimmy Carter have called for Amer­ica to be en­ergy in­de­pen­dent. They wanted us to drill for en­ergy, to de­velop wind and so­lar, to ex­pand our nu­clear po­ten­tial. Well, all that is fine, but the ma­jor jus­ti­fi­ca­tion should be na­tional se­cu­rity. We spend in the neigh­bor­hood of $700 bil­lion a year on na­tional se­cu­rity. We can spend a few bil­lion more.

Amer­ica is vul­ner­a­ble to ter­ror­ists, Mid­dle East­ern in­sta­bil­ity and un­friendly pow­ers around the world. We have a kind of mir­a­cle that has been de­vel­oped over the past few years, nat­u­ral gas. By pass­ing the Nat Gas Act now we can end these threats against us. We can be­come an en­ergy ex­porter. The bill now has 180 co-spon­sors in the House. Seven­tytwo are Repub­li­cans. This is one act of bi­par­ti­san­ship that can make a huge dif­fer­ence in our na­tion’s se­cu­rity. The time to act is now.

It pro­poses to spend $3.8 tril­lion in fis­cal 2013 alone, run­ning a deficit of $1.3 tril­lion. This is set to be the fourth straight year of deficits of more than $1 tril­lion, the first time this has hap­pened in the his­tory of our na­tion. In the past few years, spend­ing has ex­ceeded 24 per­cent of the over­all econ­omy, the high­est fed­eral spend­ing as a per­cent­age of gross do­mes­tic prod­uct since 1946.

The un­sus­tain­able level of fed­eral spend­ing is nearly uni­ver­sally ac­knowl­edged as a real prob­lem, not just for gov­ern­ment pri­or­i­ties to­day, but more im­por­tantly, for fu­ture gen­er­a­tions. For the job cre­ator, watch­ing Washington spend tax­payer dol­lars it doesn’t have raises con­cerns that taxes will have to be raised on so­ci­ety’s most pro­duc­tive in an at­tempt to slow the growth of our na­tion’s debt.

That is what this bud­get does. In­stead of pri­or­i­tiz­ing spend­ing, it pro­poses rais­ing taxes by $1.9 tril­lion on work­ing fam­i­lies, small busi­nesses and job cre­ators to en­able — you guessed it — more spend­ing. In my nearly three decades in busi­ness, I’ve never heard of a sin­gle job that was cre­ated by tak­ing more money from the hir­ing class.

Just as im­por­tant as what this bud­get does is what it doesn’t do: pro­pose any so­lu­tions for en­ti­tle­ment pro­grams that are well on their way to in­sol­vency or do any­thing to mit­i­gate the on­slaught of reg­u­la­tions that are crush­ing our small busi­nesses, star­tups and in­no­va­tors.

In­stead of un­shack­ling the free-en­ter­prise sys­tem that made Amer­ica’s econ­omy the most pros­per­ous in his­tory, it’s clear that this ad­min­is­tra­tion is in­tent on dou­bling down on a failed sta­tus quo of big­ger gov­ern­ment, higher taxes and no fis­cal dis­ci­pline. Job cre­ators across this na­tion — many of whom I work with as a ven­ture cap­i­tal­ist — are look­ing to Washington for less reg­u­la­tion; a sim­pler, flat­ter tax code and the kind of pol­icy cer­tainty that will pro­vide in­cen­tives for in­vest­ment and hir­ing. Un­for­tu­nately, with this bud­get, we still haven’t found what we’re look­ing for.


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