US Senate to vote on tax break for natural gas trucks

Tue Mar 13, 2012 12:32pm EDT

* Natgas vehicles plan needs 60 votes to pass

* "It's probably not going to pass"-Republican Senator Burr

* Plan opposed by conservative groups, Koch Industries

* Obama, Pickens, Senate majority leader support concept

By Roberta Rampton

WASHINGTON, March 13 (Reuters) - The U.S. Senate will vote Tuesday on tax incentives for natural gas vehicles, a bipartisan plan praised by those who say it could reduce the country's dependence on foreign oil but panned by conservative groups as an unnecessary subsidy.

The idea, which is unlikely to find enough support to pass, pits billionaire T. Boone Pickens, who has been promoting natural gas since 2008, against Koch Industries, an energy conglomerate that sees the plan as interference in the private sector.

Praised by President Barack Obama and Senate Majority Leader Harry Reid, the five-year plan would spur purchases of long-haul trucks and commercial vehicles that can run on cheap and abundant U.S. natural gas. The subsidies would be paid for from fees charged to users of the fuel.

As gasoline prices spike to new highs for this time of year, Obama has promoted the concept as part of a long-term plan to reduce gasoline prices, a top issue ahead of November elections.

The bill would also provide tax credits for building pumps and other infrastructure needed for filling more vehicles with the fuel.

"If you vote against this amendment, you cannot go home and tell your constituents that you have done everything you can to reduce (gasoline) prices," said Robert Menendez, a New Jersey Democrat who cosponsored the bill.

But Richard Burr, a North Carolina Republican who has backed the bill for three years, said Monday that he expects it to fall short of the 60 votes it needs to advance as part of the Senate's highway funding bill.

"This is the first chance to come to the Senate floor and have a vote, and you know what? It's probably not going to pass. That's the disappointing thing of it," Burr said in a speech in the Senate, where he railed against the bill's critics.

CONSERVATIVE GROUPS TRACKING VOTES

Conservative groups including the Heritage Foundation, Club for Growth, and the Koch-funded Americans for Prosperity have put senators on notice that they will be tracking who votes for the bill.

The groups have said the program might not generate enough money to pay for the subsidies and argued the private sector should adopt the vehicles as it sees fit.

"If natural gas vehicles are truly advantageous and economically efficient, then consumers will demand that they be developed without political mandates that exhaust more taxpayer dollars," Koch executive vice-president Richard Fink said on the company's website.

Americans for Tax Reform has said the program has the potential of "skewing the market, inflating natural gas consumption, and potentially driving up the cost of natural gas".

But Burr argued the program would not cost taxpayers a dime, and would rather accelerate a shift that is already under way. It has the potential to lower gasoline prices by reducing demand for oil from the Middle East, he said.

"I was rated as the seventh-most conservative member of the United States Senate," he said in his speech, imploring his colleagues to support the bill. "This year, I bought a hybrid. I bought a hybrid because I was tired of paying money to people who hate us."

If the Senate bill passes, the measure would still need to find enough support in the House of Representatives, which has not yet passed a highway funding bill.

Last year, about 200 House lawmakers signed on to support a similar natural gas vehicle plan in the House, but 20 of them have since withdrawn their support.

Republican House Leader Eric Cantor said last week he opposed the plan.

"Given the situation that we have with the budget and given the fact that natural gas prices are now at least at a 10-year low, I don't even see the sense in that policy, not to mention just the overall aspect of Washington coming in, picking winners and losers, that's what we are trying to get away from," Cantor told The Hill's E2 Wire, a Capitol Hill blog. (Editing by Dale Hudson)