Pickens Flip Flops on Energy
Eight months ago, T. Boone Pickens stated that the low price of natural gas would create a market incentive for natural gas vehicles to flourish without federal assistance. He’d given up calling for any more tax credits. Sure he wanted them, but he didn’t need them and he didn’t believe that Congress would act. What this meant – at least for a time – was that he was suddenly willing to abandon his Pickens Plan, which was his way of reducing U.S. dependence on foreign oil.
Part of the Pickens Plan was for America to use more of America’s natural gas, but his central focus was on natural gas and incentivizing (with subsidies) America’s heavy truck fleets to use natural gas. He conceded last year that the switch from diesel-powered trucks could occur without federal intervention.
In his colorful words, “It’s going to happen, and you don’t have to have Washington do it, thank God.” Yes, Pickens accepted market forces would allow this transition to occur without further intervention and market distortions from the federal government. And that’s good because subsidy programs are bad for taxpayers and energy consumers, though they may be good for investors like Pickens.
Pickens is now changing his tune, though:
The best thing to do is focus on heavy-duty trucks and give them a tax credit. It could work like a toll road, what you call a pay-for system. If you use it, you pay for it. So you give these guys a break upfront to convert to natural gas trucks, and then you tax the natural gas.
Unlike Mr. Pickens’s opinions, free market principles don’t change.
When the market is allowed to function without government intervention, the best product wins – as opposed to the most politically favored product. And this, all without harming taxpayer and consumers.
Mr. Pickens has a prerogative to change his opinion, but that doesn’t make his opinion good.
To be clear, what he is advocating for is government handouts — that harm taxpayer and consumers — for folks who lobby Washington politicians. And guess where those government handouts come from?