Of Crony Capitalism and Natural Gas

At the Weekly Standard today, Daniel Halper has what should be a must read essay regarding T. Boone Pickens and the NATGAS Act currently being considered in congress. This is one of those subjects where I frequently find myself dealing with conflicting feelings. I am, without question, a huge supporter of the domestic energy potential of natural gas and the jobs it can bring, along with improved positions on national security, well into the next century. Halper notes, however, that Pickens tries to steer the conversation into an area where the government should not stray.

Crony capitalist extraordinaire T. Boone Pickens has an op-ed in Politico today pressing the case, once again, for the NATGAS Act, which is now pending before Congress. The bill itself would offer a slew of subsidies for those companies producing natural gas, converting trucks and cars to natural gas, and developing natural gas fueling stations throughout the country. And it just so happens that Pickens happens to own companies engaged in those very businesses, and passage of the NATGAS Act would bring a windfall of at least $100 million and likely much, much more.

One striking thing about Pickens’s piece in Politico though is the Obama-like shamelessness of his attacks on “special interests.” Of course President Obama is fond of attacking special interests, but it often seems like the only distinction between a legitimate, regular interest and a “special” interest is how much money that interest is putting behind the Obama reelection campaign. Unions, for example, give to Democrats, so they are not a special interest. Clean energy companies, like Solyndra, that rely entirely on federal loans and subsidies for their survival? Not a special interest—they support the president and they love the environment. General Electric, which pays no income taxes? Just ask Jeffrey Immelt, GE CEO and chairman of President Obama’s Council on Jobs and Competitiveness…not a special interest.

To be clear, Pickens is a businessman who has been dealing with energy questions since before many of us were born. He is not unintelligent on the subject. But, as a businessman, he also has to keep an eye on his bottom line. This is where we part ways.

Natural gas, particularly in its compressed form, is already in wide use and current technology holds the promise of expanding that use into many other areas. We may well be the “Saudi Arabia” of natural gas, and this could be a major piece of the puzzle in terms of leading us on a path toward energy independence. But natural gas must – and in most cases already does – prove itself to be fiscally sustainable without being propped up on the taxpayer dime. That’s precisely how we got into so much trouble with ethanol, solar and other adventures too numerous to list.

If Pickens honestly believes in the potential of natural gas – as he clearly does given all the investments he’s made in it – then he should also believe that it is promising enough to stand on its own two legs in the open market. I believe that it will. T. Boone needs to pack his bags, leave Washington, and let the industry prove that it can deliver the goods.