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Posted at 05:46 PM ET, 05/20/2011

Pickens, Koch spar over natural gas subsidies

Two titans of the energy industry are locking horns over a measure aimed at providing federal tax incentives for vehicles powered by natural gas.

The public sparring underscores an increasing debate over H.R. 1380, the New Alternative Transportation to Give Americans Solutions Act, or “NAT GAS Act.” Two conservative House freshmen last week announced their opposition to the measure, arguing that it would unfairly distort the energy market by awarding targeted tax subsidies.

The spat also draws attention to the debate on Capitol Hill over tax subsidies – an issue that Congress has focused its attention on as gas prices around the country have soared – as well as the often-conflicting views lawmakers have taken on the issue.

The latest salvo in the natural gas fight came Friday when Koch Industries, the billionaire energy-and-manufacturing conglomerate headed by brothers Charles and David Koch, fired back at oil and gas tycoon T. Boone Pickens, who has been lobbying heavily for H.R. 1380’s passage and has accused the Kochs of attempting to defeat the measure, which has picked up broad bipartisan support.

Pickens last week charged that the Koch brothers are rounding up opposition to the bill, especially among tea-party-backed conservatives, due to their own personal stake in the oil industry.

“They don’t want natural-gas prices to rise,” Pickens said of the Koch brothers.

On Friday, Koch Industries Executive Vice President Rich Fink contended that wasn’t the case – and that the conglomerate opposes the “NAT GAS Act” for the same policy reasons that conservative lawmakers have come out in opposition to the bill.

“Koch has consistently opposed subsidies that distort markets,” Fink said in a statement. “We maintain that the marketplace, while not perfect, is the best mechanism for allocating resources to consumers.”

Fink added that “we do not question T. Boone Pickens’ intentions or integrity in this debate,” and that Koch Industries “consistently oppose(s) subsidies for all other fuels whether we benefit from them or not.”

Several outside organizations, including Americans for Tax Reform, have urged conservative lawmakers to oppose the “NAT GAS Act” because it would “further skew the marketplace towards the energy sources favored by the federal government rather than consumers.” The group’s president, Grover Norquist, appeared at last week’s Capitol Hill event with two Republican House members opposing the bill, Reps. Raul Labrador (Idaho) and Mike Pompeo (Kansas).

While the Koch-Pickens exchange has added a personal twist to the natural gas debate, a broader issue at play is the debate over what constitutes a subsidy and what doesn’t, as Greenwire’s Elana Schor notes.

Many of the same Republican lawmakers who have spoken out against the “NAT GAS Act,” for instance, have opposed recent efforts by Democrats to eliminate as much as $21 billion in tax subsidies for the country’s top five oil companies.

Similarly, many Democrats who have argued against the oil company subsidies have come out in favor of subsidies for natural gas.

Asked at a news conference earlier this week about the apparent contradiction, Sens. Charles Schumer (D-N.Y.) and Claire McCaskill (D-Mo.) explained that not all subsidies are created equal.

“Just because you don’t agree with one tax subsidy doesn’t mean you don’t agree on any,” Schumer said Tuesday at a news conference with McCaskill on repealing oil company subsidies. “There’s broad support in our caucus for incentives for solar and wind, and many people support natural gas, as Claire said, because we have an abundant supply here at home.”

McCaskill noted that “every senator has a different view about what we should be doing with the tax code in terms of incentivizing behavior in the marketplace,” and that some lawmakers feel strongly about increasing tax incentives for alternative forms of energy as a way of decreasing U.S. dependence on foreign oil.

She added that while not everyone may be able to agree on natural gas subsidies, all lawmakers should oppose subsidies for big oil companies at a time of record profits for the industry. “I think that’s the issue as we move forward: Can we all agree on this one? We may not all agree on all the rest, but can we all agree on this?” McCaskill asked.

If this week’s energy votes were any indication, lawmakers may not be getting any closer to agreement, but as gas prices continue to rise and the tumult in the Middle East intensifies, the sparring over energy issues looks only to intensify.

By  |  05:46 PM ET, 05/20/2011

 
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