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Nat Gas Act

Sen. Robert Menendez

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Mr. President, I have come to the floor to talk about an amendment I will offer later today--the NAT GAS Act.

What if I were to tell the Chair there was a transportation fuel that is over $1.50 cheaper than gasoline and roughly $2 cheaper than diesel? What if I were to tell the Chair this fuel is also cleaner and has fewer smog-causing pollutants than diesel and, if wisely used, could reduce the cases of asthma and lung cancer?

What if I were to tell the Chair this fuel is abundant right here in America, so much so that we may soon become one of the world's largest exporters of this fuel? I think I might hear him say: Sign me up. What is the name of this wonderful fuel? The name of this fuel is natural gas.

We can see in this chart that as gasoline prices are already skyrocketing toward $4 per gallon, the price of compressed natural gas is barely above $2 equivalent. Natural gas prices used to follow oil prices, but now they are on their own stable, inexpensive price levels. The same holds true for liquefied natural gas. As we can see, gas prices here, liquefied natural gas down here. Diesel prices now exceed $4, and LNG is still hovering around a $2 equivalent

Why aren't we all driving around in natural gas vehicles, paying a little over $2 per gallon equivalent? The reason this inexpensive fuel is not widely used is because there are not many natural gas vehicles in the United States, and there are also very few places to refuel. Currently, there are nearly 14 million natural gas vehicles in the world but only about 117,000 in the United States. The car and truck manufacturers want to see that the natural gas utilities will invest in refueling infrastructure, and the natural gas utilities want to see more natural gas vehicles on the road. It is a classic chicken-or-the-egg problem.

What both the manufacturers and the utilities need to see is a strong stance by the Federal Government to jump-start this market.

The NAT GAS Act will do that by jump-starting the industry and, in 10 years, add over 700,000 natural gas vehicles to our roads and help incentivize the installation of refueling stations around the Nation. In addition, it is estimated the bill will displace over 20 billion gallons of petroleum fuel and create over 1 million direct and indirect jobs.

I know what some of my colleagues are thinking: Isn't this just another handout to energy companies? The answer to that question is a resounding no. This legislation is fully paid for with a small fee on natural gas used as a vehicle fuel. As I mentioned earlier, natural gas is over $1.50 cheaper than gasoline or diesel. This amendment would use some of those savings to help overcome the market barriers for natural gas vehicles and supporting infrastructure. The fee starts at 2.5 cents per gallon equivalent in 2014 and grows to be 12.5 cents in 2020 and 2021. In 2022, the fee is eliminated. In this way, we can still keep natural gas less expensive than other fuel options, while investing in infrastructure to help grow the market, make natural gas vehicles cheaper, and put the industry on a path to flourish on its own.

While the legislation itself is designed to provide a temporary boost, it is important to note that the natural gas supplies we are sitting on are enormous. North America's natural gas resource discoveries have more than doubled over the past 4 years, meaning that at the current rate of consumption, this resource could supply current consumption for over 100 years. If we do not use our natural gas here in America, it will be exported abroad, benefiting consumers in other countries, while American families will continue to pay higher prices at the pump. Already, one U.S. facility has received a permit to export natural gas and four more are following suit. We can use that natural gas in the United States to displace oil. We are sending trillions of dollars abroad to countries that are despotic and wish us ill or we can export it so other countries can gain the benefits. I say we use it here.

The NAT GAS Act will also increase our Nation's energy independence and make us less dependent on regimes that do not have America's interests at heart. This is especially important at a time when Iran is attempting to develop a nuclear weapon and is threatening to block oil supplies. Natural gas is not the only solution, but it can be an important part of a solution that will allow us to ignore future OPEC threats because we have alternatives to oil. But until we get to that point, we need to do all we can to supplant oil.

It is also important to note that natural gas vehicles are an important way to improve air quality. According to the EPA, natural gas as a vehicle fuel has very low emissions of ozone-forming hydrocarbons, toxins, and carbon monoxide. By producing less of these harmful emissions, natural gas vehicles can reduce smog in our cities and lower incidents of asthma and lung cancer. These health benefits are one reason why Los Angeles County has made almost its entire fleet of 2,200 buses run on compressed natural gas.

Let me talk about one issue some are concerned about. While natural gas vehicles can have important environmental and health benefits, we must also keep in mind that natural gas is still a fossil fuel and there are serious risks that need to be weighed when it is extracted. For that reason, I think we need to do better to regulate a practice called fracking. I also believe these risks mean that certain environmentally sensitive areas remain off-limits for fracking, and I will continue to work with my colleagues, such as Senator Casey, to better formulate Federal rules to protect our drinking water from possible contamination. At the same time, we should not kid ourselves. This amendment will not cause natural gas vehicles to be the main driver of natural gas demand, and fracking is used to extract oil as well. So voting against this amendment will not reduce the amount of fracking.

We cannot let this opportunity to use this cheaper fuel to increase our energy security, improve our air quality, and relieve the pain at the pump slip by. It is time to put in place the temporary, fully paid for incentives of the NAT GAS Act to allow the natural gas vehicle industry to flourish. Remember, if one votes against this amendment, they cannot go home and tell their constituents that they have done everything they can to reduce gas prices.

I hope our colleagues will join us when the time comes to offer the amendment on the floor and to support it.

I suggest the absence of a quorum.

The clerk will call the roll.

The assistant legislative clerk proceeded to call the roll.

Sen. Kay Bailey Hutchison

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Mr. President, I ask unanimous consent the order for the quorum call be rescinded.

Without objection, it is so ordered.

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