by dugan 9-10-08
I was asked to share my analysis of T. Boone Pickens’ Prop 10 on the November California ballot with the California Legislature today. The legislature’s own analysis of Prop 10 was skeptical to the max, and I’ll post it tomorrow. Meantime, here’s my own testimony to the committee:
It’s bad enough that Proposition 10 would transfer billions of dollars from California taxpayers to the vanity project–and the personal wallet–of a Texas natural-gas billionaire. Even worse, Proposition 10 would hand out huge subsidies for vehicles that run on natural gas, in ways that would undercut other clean vehicles that build energy independence. It would also raise our utility bills, no matter what T. Boone Pickens claims.
Proposition 10’s fat subsidies disfavor hybrid and plug-in hybrid vehicles. Proposition 10 excludes flex-fuel and biofuel vehicles. Its lavish tax credits are meant almost entirely for vehicles that run on natural gas, the fossil fuel most dear to T. Boone Pickens heart and livelihood.
Natural gas vehicles are not as good as hybrids at reducing global warming emissions. They’re even worse in comparison to biodiesel engines or plug-in hybrids.
Prop 10 doesn’t care. It would pay credits of $10,000 to $50,000 for natural gas vehicles. The credits would have to be used over just five years. The result would be a surge in natural gas consumption, well beyond any reduction in natural gas used by utilities.
The price of natural gas would go up. So would consumers’ utility bills. More consumption always leads to a higher price. At the same time, taxpayers will be paying off Proposition 10 for 30 years, long after the vehicles it subsidizes go to the junkyard–if they’re even in California.
Natural gas engines do provide smog-reducing benefits, particularly for short-range heavy trucks and–most effectively–for public buses. Proposition 10, however, provides no funding at all for buses or other clean-fuel public transportation.
Its $10,000 to $25,000 subsidies for personal cars, SUVs and light trucks are just a cynical bribe to would-be voters.
The long-term beneficiaries, aside from Pickens, would be the major oil companies. They’re called "oil and gas" companies for a reason. They’ll love the prospect of more expensive natural gas–and more imports of their foreign-produced natural gas.
Much of Proposition 10’s bond money goes straight to subsidizing purchases–or leases– of certain “pure alternative fuel” vehicles. In the gnarly language of Proposition 10, that means vehicles that run on compressed natural gas.
Prop 10’s proponents talk up their buyer credit for hybrid vehicles. Yet it’s a comparatively measly $2,000 and applies to exactly one model –the Toyota Prius–which meets Prop 10’s 45-mpg requirement. Even the Honda Civic hybrid gets just under 43 mpg.
Although some plug-in hybrids would qualify for a $4,000 credit, a five-year cutoff on the credits means that mass-marketed plug-in hybrids would barely make the deadline. Mass-market electric-only vehicles are even further away. The $180,000 luxury Tesla would qualify, though, which I’m sure its wealthy purchasers will appreciate. As for hydrogen, maybe the governor can lease another Hummer, with subsidy.
Make no mistake. Proposition 10’s funds will go mostly to commercial fleet vehicles running on natural gas, which already qualify for state clean-air subsidies. Mr. Pickens’s company, Clean Fuel Vehicles Corp., has obtained millions of dollars of these California subsidies, and brags of helping its natural-gas customers, including truck fleets, get millions more. But for him, it’s not enough.
T. Boone Pickens himself, when he delivers what amounts to his stump speech, always says he wants trucks, "not your personal car," to run on natural gas. Natural gas vehicles have ranges of about 200 miles per fill-up and can take 16 hours fo fill from a home-based gas compressor. These vehicles, in personal use, are for alt-car fanatics. They’re not for soccer moms–or even hockey moms. Yet Prop 10 is built on a fiction that Pickens wants a natural gas car in every garage. There’s even a rebate for the home compressor.
And no matter who gets the rebates, taxpayers will be left holding the 30-year, $10-billion tab.
California should tell Mr. Pickens to get those vast wind farms he dreams of built first, along with vast transmission lines. When utilities are actually using much more wind instead of natural gas, then he can come and talk to us about Proposition 10.