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Will the NAT GAS Act Pass?

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One particular piece of energy legislation, the NAT GAS Act, will likely be the subject of much debate when Congress reconvenes next month.

The NAT GAS Act -- known in more formal circles as the New Alternative Transportation to Give Americans Solutions Act -- provides tax incentives to encourage the use of natural gas as a transportation fuel. Many believe the legislation will pass given the sizable position taken by some notable investors in natural gas transportation stocks.

Big bets on nat gas
The bill's main proponent, T. Boone Pickens, owns a 41% stake in natural gas station provider Clean Energy Fuels (Nasdaq: CLNE  ) . Pickens also holds nearly 2 million shares of SandRidge Energy (NYSE: SD  ) and nearly 900,000 shares of Chesapeake Energy (NYSE: CHK  ) . Those two companies explore for natural gas and will greatly benefit if natural gas becomes a popular transportation fuel

George Soros is another big-time investor betting big on natural gas transportation. Through his hedge fund, Soros holds more than 5 million shares in natural gas parts supplier Westport Innovations (Nasdaq: WPRT  ) . Earlier this year, Soros increased his position by 22%, which has fueled speculation about positive developments relating to the NAT GAS Act.

The politics of nat gas
Despite the big bets being placed on the NAT GAS Act, many believe the bill remains a long shot. The legislation has come under heavy scrutiny recently by some right-leaning think tanks claiming it's nothing more than crony capitalism. Since May 1, 2011, pressure from these groups has led to 15 of the bill's 186 co-sponsors pulling their support for the legislation, though, at the same time, another 17 have added themselves as co-sponsors.

In addition, the process used to extract natural gas, known as fracking, is a favorite target of environmentalists. Many greenies prefer electric vehicles, despite the fact that natural gas will likely be used to charge the batteries that power the electric vehicles.

The bottom line
The NAT GAS Act has impressive bipartisan support and the nation is in desperate need of the jobs the bill could create. However, I believe the bill will ultimately be sacrificed at the altar of spending cuts. I welcome your thoughts. Please scroll down to the comments section and let your fellow Fools know what you think.

Fool contributor Adam J. Crawford does not own shares of any company mentioned in this article. Motley Fool newsletter services have recommended buying shares of Chesapeake Energy and Westport Innovations. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (21) | Recommend This Article (28)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 12, 2011, at 1:01 PM, doninvest1 wrote:

    This bill is like old meat while it was a good idea 2 years ago right now it stinks,

    The process of moving to nat gas as a transportation is being slowed by everybody waiting for it to pass because they don't to spend capital without subsidies and they find your competition has a lower cost since he waited for the government handout.

    My suggestion is to kill it and move on.

  • Report this Comment On August 12, 2011, at 1:13 PM, DaddioResources wrote:

    It must be an Oklahoma "thing". Sandridge and Chesapeake are OKC based companies. T. Boone is a graduate from Oklahoma State in Stillwater which is 60 miles north of Oklahoma City.

    I hope the bill passes a affirms natural gas as a real fuel source. However, I do not think it will pass because there are too many liberal tree huggers still left in the Senate and White House which will kill THE BILL.

  • Report this Comment On August 12, 2011, at 1:36 PM, gassumptions wrote:

    Many articles have been written about the pros and cons of utilizing our vast reserves of Natural Gas as a transportation fuel.This fossil fuel often gets compared to Hydrogen or Electricity when debating which direction humanity should follow in order to power us into the future.Guess what?...They all involve Nat Gas.

    Hydrogen - The last time I checked the element Hydrogen doesnt exist in its natural state...90% of the worlds Hydrogen if produced by reforming natural gas. Zero emissions?..I think not. We just moved them from the vehicles to the Hydrogen production facilities

    Electric - Where does all this power come from? Hydro,Nuke,Coal,Diesel and......Nat Gas.They claim electric vehicles are Zero emmisions....think again.

    Natural gas,like its fossil cousin oil,is now a global commodity.The bowls of mother earth give it to us and advances in technology have made it so that it can be imported/exported. Existing/proven technologies (internal combustion engines) run great on it,efficiencies/fuel consumption are comparable and its got a 30% cleaner enviromental kicker. Its cheaper ,it will create jobs and it resides below our feet in our own country.

    If the Natural Gas legislation doesnt pass...motley won't be the only fool in this country.

  • Report this Comment On August 12, 2011, at 2:36 PM, NJPackfan wrote:

    Just as in the past as soon as oil prices decline interest in alternative fuels fades. Some congressmen say that if the switch to natural gas vehicles is profitable industry will do it anyway without government subsidies. True but, government subsidies have been given before for less important reasons (Cash for klunkers). Energy independence would be very important for the USA. There is no harm in the government giving this a kick start with a subsidy. And the jobs created would be an additional bonus.

  • Report this Comment On August 12, 2011, at 2:47 PM, IRielly wrote:

    If the NAT GAS Act doesn't pass, it won't be because of environmental or fiscal reasons, it will be, very simply, a matter of oil interests (domestic and foreign) prevailing over the best interests of our country. The "right leaning think tanks" cited in this article are heavily supported by the Koch family. One of the Koch family's principal businesses is refining imported and domestic oil. We should not make the mistake of thinking that this is an idealogical, fiscal or environmental issue. It's about money, pure and simple.

    Yes, Boone Pickens has a vested interest in the legislation. But, that does not make him wrong about his key point that this bill offers a clear way to greatly reduce our middle eastern imports.

    Our country will be the true loser if this bill does not pass.

  • Report this Comment On August 12, 2011, at 2:56 PM, mm5525 wrote:

    It will eventually pass. May not be this time, but it will eventually pass unless the entire United States of America is completely brain dead. There are supporters both from the left and right, as the article indicates. If this Congress is brain dead, and they sure seem like it, eventually a Congress and President will sign it. Could it take a few years, of course. However, Natural Gas affects everyone. More tax revenue in royalties for the States/Feds from the landowners, more jobs drilling for Nat Gas meaning more tax revenues for the States/Feds, more jobs for those who can create a cleaner way to frack for both oil and Nat Gas, and more income in the pockets of both the land owners as well as consumers in general who benefit from lower prices at the pump. You can even add automobile manufacturers to the mix who create natural gas vehicles. For instance, all of Chesapeake's public vehicles run completely on Natural Gas. CLNE is slowly but surely building more stations and have have teamed up with Pilot, thank in part to the investment in the company by Chesapeake.

    Do you want to pay $3.50 a gallon or $1.50 a gallon to get to the same place in the same amount of time?

    Even Congress can figure that one out.

  • Report this Comment On August 12, 2011, at 3:05 PM, PatriotKC wrote:

    The National Gas Act is good for the country, but it may not be good for interest groups. Congressmen or senators will listen to them more so than looking

    after the national interest. I am sure the spending

    cuter will have some objection to it.

  • Report this Comment On August 12, 2011, at 7:51 PM, 32brightboy wrote:

    There are no silver bullets that will cure our dependance on foreign oil. We must develop multiple sources of new energy supplies. These sources include natural gas,more drilling for oil, as well as solar and wind and hydro power. We must also learn how to better use the resources we already have. All of these sources, and others, are the only way we can become energy independant. We MUST pass the Natural Gas ACT and we should be letting our representatives know how we feel. They may not hear very well, but if we yell loud enough they will listen.

  • Report this Comment On August 13, 2011, at 11:05 PM, nolasue wrote:

    This bill should not pass until the industries,fracking and other have strict regulations and better means of protecting our water.fracking uses huge amounts of groundwater and produces very toxic water. Nat gas lets huge amounts of methane into the atmosphere when excavated and is much more toxic than CO2 to our atmospheric green house gas problems. We have seen exclusive people and industries make huge personal gains pushing bills ahead before the total effects of the technologies have been studied by unbiased sources and scientists to figure out the costs to the environment and regular peoples lives, let alone subsidize these industries by the tax payer.

  • Report this Comment On August 16, 2011, at 1:40 PM, decbutt wrote:

    I don't think it will pass.

    Which is a shame. A vast amount of money being spent overseas would, within 2 years, be spent within the USA instead, meaning jobs and wealth-creation within the USA.

    I think the reason why it won't happen is because partisan elements will poison it for political reasons.

    If it showed any kind of success in either job creation or wealth creation, Obama may get some credit.

    And there are more than enough political-interests that would glad cut the whole nose off the USA to spite its face.

    That I can understand - not agree with, not at all, but at least I can understand it.

    What I cannot understand is that Americans don't seem to care if billions and billions of dollars go to nameless Arabian princes and despots. That's fine - they'll gripe a little, but not much else.

    But if there is a chance that a good chunk of spending could go to an Named American instead - not an anonymous American, a Named Individual, somehow that is automatically bad, despite the fact that America would ultimately win from that.

    We can all join-in the wealth that would come as a consequence - this ain't a closed-shop. I can think of much worse ways to spend tax dollars.

    Every element of this technology is ready and tried & tested. It is good to go. All it needs is a jump-start so we can get where we would be 12 years from now in 2 years instead.

  • Report this Comment On August 16, 2011, at 11:00 PM, powersg wrote:

    A number of years ago I worked for a group of

    people who said that natural gas would work as a

    motor fuel. The group developed a map for 5,000

    natural gas filling stations in the USA. Everywhere a high pressure 500 pounds or more of natural gas was available and crossed under a major highway route. The group helped to develop talking natural gas dispensers to ease the burden of fueling your vehicle. The group later developed natural gas unibody tanks for every make of car they could find. The neat thing about the tanks, they operate at 300 pounds of pressure not 3000 pounds of pressure. The knowledge is there to

    develop natural gas as a motor fuel. Lets take

    back our country. Thanks

  • Report this Comment On August 17, 2011, at 12:36 AM, CoastalTrader wrote:

    If this is pushed as a "Jobs Bill" it will pass.

  • Report this Comment On August 19, 2011, at 4:01 PM, odollar1 wrote:

    Were spending 40 to 42 billion a month on overseas oil, create jobs and keep the money here.

  • Report this Comment On August 19, 2011, at 11:28 PM, 123spot wrote:

    Passing natural gas is an act we should all get in front of. Spot

  • Report this Comment On August 20, 2011, at 1:14 PM, sfghouse wrote:

    Why don't we simply let the free market determine if it wants to use natural gas as a transportation fuel? Why does it require tax subsidies? If it's really as great as the proponents suggest, then let it stand on its own merits. The chance of a future subsidy halts the private sector's investment as it waits to see what government does.

  • Report this Comment On August 20, 2011, at 7:31 PM, worusstr wrote:

    I agree the bill pass...sometime. Unfortunately, I do not believe that Congress has the desire to address the over all public good but rather are more concerned with their re-election. Natural gas makes tremendous sense. Propane has been used to fuel vehicles for years with great results (clean, good performance); however, natural gas would be more cost effective. I hope our "representatives' realizes this sooner than later.

  • Report this Comment On August 21, 2011, at 4:27 AM, donna1950 wrote:

    If the Nat Gas bill fails it will likely be due to influence of the Koch brothers. Republicans have been strongly pressured to oppose the bill. Several who withdrew co-sponsorship were subsequently given large financial contributions by the Koch PAC. The bill is forcing Republicans to choose sides between Pickens and Koch. Both the Kochs and Pickens have a financial stake in the outcome, though they deny their positions are motivated by bottom lines. Unfortunately, the divide within the Republican party will be the true reason for its failure and liberals will likely be blamed. There are many advantages to this bill which have already been cited, primarily lowering dependence on foreign oil and the immediate increase in jobs. However, if fracking issues are not addressed in conjunction, lawmakers would likely be blamed for environmental problems and lack of forethought.

  • Report this Comment On August 21, 2011, at 8:25 AM, NOTvuffett wrote:

    #1 cng does works well for fleet vehicles operating in a metropolitan area, things like buses and garbage trucks, etc.

    #2 cng has a vastly inferior range compared to fuels like diesel making the necessary fueling station infrastructure prohibitively expensive

    #3 i agree with sfghouse that we should let market forces work out where and when a product is viable. for example, ethanol has had subsidies for decades even though every serious study on it has shown little to no net energy gain from corn based ethanol, and the importation of (more efficient) sugar cane ethanol is subject to a prohibitive tariff. for the record, citizens of the usa pay much more for sugar than others because of protectionary tariffs.

    #4 i own shares in nat gas companies. the fuel is cheap, clean and plentiful, one of these days we will have to use it just for practicality.

    #5 i always find it amusing when people throw up the names of the supposed bogeymen, and they don't have the slightest clue on what they are about. just because the koch brothers are right of center political activists does that make them evil?

    have you ever heard of george soros, a left of center political activist?

    my life was more fun when people thought dick cheney was darth vader and halliburton was the evil empire. i would tell people that i sell to halliburton, and they were so ignorant of what they do they wouldn't believe me. i also sell to schlumberger, although indirectly. does that make me a francophile?

  • Report this Comment On August 21, 2011, at 8:03 PM, donna1950 wrote:

    No one's political opinions make them evil including the Kochs. They are simply a lobby who has powerful financial influence and are choosing to exert it with this issue. Noteworthy that most who are commenting want this bill as law. Awareness of a primary reason it may not pass is important when a party has majority control.

  • Report this Comment On October 13, 2011, at 3:25 AM, CaptainDeana wrote:

    It's time that American politicians were held accountable for their decisions. Too long now that they are owned by special interests. They should vote on the NAT GAS Act purely on the facts and what would or would not be good for the country. And yes the NAT GAS industry does need to get it's act in order and be upfront about the pros and cons of fracking. This way the industry can attempt to really mitigate the cons and create a viable energy alternative going forward. Time to be bipartisan for the good of ye olde USA.

  • Report this Comment On November 15, 2011, at 7:49 PM, spike1299 wrote:

    Putting all your deep thoughts pertaining to politics aside and the big money who could profit........, You all are missing the BIG picture!!!!!

    Just the thought of converting all the big gas/diesel guzzlers to NG, makes me more now than ever to make it happen, GETTING less dependent on foreign oil, means, lower gasoline prices for the plebeian, like me :). Don't ya think thats a good thing!!

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