In April Members of Congress introduced the New Alternative Transportation to Give Americans Solutions Act (NATGAS). The NATGAS Act creates tax treatment to subsidize the production, use, and purchase of natural gas vehicles. Supporters of the Act argue that it promotes fuel competition and reduces foreign oil dependence and greenhouse gas emissions. There was one problem; propane was not part of the act.
There is not much of a difference between propane and natural gas. However, natural gas has found a new market (although controversial) in recent years, while propane sales have been in steep decline for over a decade. With the passage of NATGAS, it looked like the final nail might have been slammed into the coffin for propane.
With propane lobbyist banging down the doors of the capital, Representatives John Carter (R–TX) and Dan Boren (D–OK) introduced the Propane Gas Act of 2011, also known as The Propane Green Autogas Solutions Act. The Propane Gas Act of 2011 creates a five year extension of tax credits for propane as a fuel source.
Following the Propane Gas Act of 2011 a study, conducted by ICF International and released by the National Propane Gas Association, showed that the Propane Gas Act’s impact on American jobs and the American economy will be major. The study showed that the growth in propane vehicle sales and use created by the Propane Gas Act will generate an increase in economic activity between $4 billion and $5.7 billion per year in 2016. Additionally, 30,000 – 42,000 new jobs will be created by the Propane Gas Act by 2016.
Some people hate the idea of any government subsidies though, claiming it allows for politically-preferred companies to become reliant and dependent on government subsidies. The current political climate is not friendly to these sorts of government handouts, and no action has been taken on the Propane Gas Act yet. David Finder, National Energy Programs Manager for Alliance Autogas, a propane proponent, does not think the outlook is good.
In an email, Finder said;
Still no official word. We do not have a good feeling that it will pass and will end 12/31/11.
Not sure if it will come back up in the spring like 2011 and became retroactive back to Jan. 1st 2012.
Propane Gas Act even though it has supporters on both sides of the aisle will most likely not move forward either.
Things just aren’t looking good for propane subsidies anywhere. In California, the California Public Utilities Commission has enacted a program that allows homeowners who use propane to heat their water to be eligible for subsidies to purchase solar water heaters to replace their propane heaters. It seems like propane just can’t catch a break anywhere these days.
Is the problem with propane? Are government subsidies hurting, or helping propane? Where does it go from here?
Sound off with your thoughts below.
Andrew Meggison was born in the state of Maine and educated in Massachusetts. Andrew earned a Bachelor’s Degree in Government and International Relations from Clark University and a Master’s Degree in Political Science from Northeastern University. Being an Eagle Scout, Andrew has a passion for all things environmental. In his free time Andrew enjoys writing, exploring the great outdoors, a good film, and a creative cocktail. You can follow Andrew on Twitter @AndrewMeggison