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Natural gas could become the new ethanol -- the alternative fuel of choice -- if a new bill passes. Like ethanol engines, gas-natural gas dual mode engines suffer a performance loss of as much as 15 percent.  (Source:

The U.S. has among the world's most abundant natural gas deposits (regions with highest levels shown in brown).  (Source: Wikimedia Commons)
A variety of vehicle weight classes are covered by new natural gas bill

A new bill, NAT GAS (New Alternative Transportation to Give Americans Solutions), has been proposed by U.S. Senators Robert Menendez (D-NJ), Senate Majority Leader Harry Reid (D-NV),and Senator Orrin Hatch (R-UT) which looks to push natural gas vehicles into the consumer mainstream.  The proposal looks to offer a bevy of natural gas vehicle purchasing, refueling and manufacturing tax credits which would eclipse even current credits for electric vehicles.

People purchasing a light vehicle capable of running on natural gas would get a $12,500 tax credit, significantly more than the $7,500 credit offered for plug-in vehicles.  Current tax credits for three other weight classes would double, up to a maximum of $80,000 for the largest vehicle class.

Bi-fuel (gas and natural gas) vehicles would also be eligible for a 50 percent incremental cost tax credit -- this means that 50 percent of the costs that companies assume from increasing production would be offset by tax credits.  The bill would also make it 100 percent tax deductible (with some limitations) to build a facility which builds natural gas vehicles.  The bill would also offer refueling stations up to $100,000 to provide natural gas vehicle refilling pumps.

The new bill was masterminded and heavily praised by oil and natural gas baron T. Boone Pickens.  Mr. Pickens had made headlines last year, announcing a massive wind power project.  Just last week, he essentially pulled the plug on the project, and called natural gas the "only option" for the U.S.

With his heavy natural gas holdings Mr. Pickens stands to make a small fortune if the bill should pass.  Indeed, the natural gas industry as a whole would see a huge boost from the bill.

Natural gas vehicles run on methane, the primary component of natural gas.  Methane engines run approximately as efficiently as gasoline/petrol engines, but are less efficient than diesel engines.  Dual-mode engines suffer a 10 to 15 percent efficiency loss over gas-only engines, due to the higher octane number of 120-130.

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Subsidies once again
By Wierdo on 7/13/2009 4:52:56 PM , Rating: 0
If I recall correctly, gasoline is heavily subsidized so that it doesn't normally cost fifteen bucks a gallon. I don't know if this is gonna be subsidized enough to compete with that, but we'll see.

RE: Subsidies once again
By corduroygt on 7/13/2009 5:04:44 PM , Rating: 5
You recall wrong. Gasoline is not subsidized in the US, it's actually taxed quite a lot compared to other stuff you buy which is only subject to sales tax. It's subsizdized in india and china IIRC, or at least it used to be last summer.

RE: Subsidies once again
By drmo on 7/13/2009 5:13:46 PM , Rating: 2
The study that the OP refers to is based on the "hidden costs" and social factors such as pollution and congestion, as well as costs for roads, etc.
It is an older report I think. Many of these costs would be still present no matter what type of vehicle you drive, though pollution would be less for natural gas perhaps.

I do remember hearing that there were some subsidies to oil/gas companies, but not directly on fuel, which is taxed in the US, though not as much as in Europe. Talking of fuel subsidies, Venezuela charges a few cents for gasoline. ( )

RE: Subsidies once again
By clovell on 7/13/2009 5:56:43 PM , Rating: 2
Yeah, folks should think about that the next time they decide to fill up at Citgo.

RE: Subsidies once again
By FITCamaro on 7/14/2009 9:30:55 AM , Rating: 2
Yeah I refuse to buy gas at a Citgo.

RE: Subsidies once again
By Spuke on 7/14/2009 3:24:13 PM , Rating: 2
What's up with Citgo?

RE: Subsidies once again
By clovell on 7/14/2009 4:41:00 PM , Rating: 2
Citgo gets its oil primarily from Venezuela. It usually costs more to refine because it's low-quality. I don't like Chavez, so I don't support him by filling up at Citgo.

RE: Subsidies once again
By Wierdo on 7/14/2009 8:07:06 AM , Rating: 2
I don't know, there's allot of stuff to read through when doing a little search online, it can't be all lies. I did a quick google search for some articles on this, and came up with these:

"Such external costs push the true price of gasoline as high as $15.14 a gallon, according to a new report released by the International Centre for Technology Assessment...

These external costs total up to $1.69 trillion per year, according to the report...

Artificial, anti-free-market subsidies don't end at the federal level, as the group said most state income taxes are in turn based on oil firms' lower federal tax bills, which result in companies paying $123 million to $323 million less in state taxes...

In addition to tax breaks, the federal government provides up to $114.6 billion to the wealthy industry in giveaways and subsidies annually that support the extraction, production and use of petroleum, such as research and development and export financing.

"actual subsidies to Big Oil are between $78 to $158 billion (again, with a 'b') per year."

"Over $400 million of overseas refinery taxes are subsidized by federal taxes...

Oil companies may be eligible for a 15 percent tax credit for recovering the costs of recovering domestic oil if they use "enhanced oil recovery" methods...

Tax code provisions allow integrated oil and gas companies to deduct 70 percent of their intangible drilling costs, and deduct the other 30 percent over five years...

Certain oil, gas and uranium producers are eligible for a subsidy under the tax code. Oil companies can deduct 15 percent from their drilling costs, but some independent oil companies can deduct 100 percent."

Other similar hits:

Do you think there's something wrong with these claims or figures?

RE: Subsidies once again
By drmo on 7/14/2009 10:04:50 AM , Rating: 2
I don't know about the others, but I wasn't suggesting these were lies; you just have to read carefully (read the Cobb report link on the site. ) The $15 number comes from many factors that will be true as long as we still use any cars: road repairs, social factors, congestion... There are definitely subsidies for "oil companies" but not directly on "gasoline." There is a difference. Based on direct subsidies to oil companies from your links ($158 billion) and information from here: it amounts to about $1.00 subsidies per gallon of gasoline. That is assuming that all of the subsidies to oil companies (and all of the oil barrels) are going to produce gasoline, which is untrue, because oil is used for many other things, including plastics, etc. I admit that I don't know enough to do a detailed analysis of the so-called gasoline subsidies, but the truth is, many corporations get tax breaks and subsidies, including the many other alternative energies. Therefore, the numbers would only make sense if we compare the subsidies for gasoline production to the production of natural gas, versus ethanol, versus solar...

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