Kings of Crony Capitalism

That’s the modern Democratic Party. Washington handouts are coming so fast it’s impossible to keep track of them, but here is one more that had not been on my radar screen: the New Alternative Transportation to Give Americans Solutions Act, better known as the NAT GAS Act. What does NAT GAS do? It imposes a user fee on natural gas that starts at 2.5 cents and ramps up, in the Senate version, to 12.5 cents per gallon. The act then uses that revenue to subsidize the conversion of truck engines from gasoline to natural gas and the development of natural gas filling stations.

Let’s consider this in the context of President Obama’s Texas–no, wait, Kansas–speech today, in which he posed as the great defender of the “middle class.” Since everyone uses natural gas, electricity that was generated with natural gas, etc., we will all pay the tax. That would be, I guess, the middle class. So…who benefits? Are there a lot of middle class folks out there converting trucks and developing filling stations? Or is this just one more payoff to the rich and well-connected, which is what the Obama administration seems to be all about?

It’s the latter. T. Boone Pickens has campaigned actively for the NAT GAS Act; in fact, the bill is sometimes referred to as the “Pickens Plan.” Pickens is the founder and largest shareholder of the natural gas company Clean Energy Fuels Corporation, which bills itself as “the leading provider of natural gas fuel for transportation in North America.” So subsidizing vehicles that burn natural gas will enrich Pickens. In addition, Pickens also “holds nearly 2 million shares of SandRidge Energy and nearly 900,000 shares of Chesapeake Energy. Those two companies explore for natural gas and will greatly benefit if natural gas becomes a popular transportation fuel.”

But that isn’t the worst of it. The ubiquitous George Soros has his hand out, too:

It so happens that a company called Westport Innovations is a leading provider of technology that allows engines to operate on clean-burning fuels such as compressed natural gas and would be expected to benefit from HR 1380’s huge allocation of taxpayer dollars.

According to the folks at gurufocus.com, which monitors the wheeling and dealing of major investors, George Soros, the Hungarian billionaire who has made a fortune manipulating currencies among other financial shenanigans, owned 5,547,604 shares of WPRT, valued at $122 million as of March 31. That represented 1.45% of his equity portfolio and his third-largest holding.

So Soros could once again profit handsomely from U.S. energy policy determined largely by a Democratic party whose causes he has supported over the years, just as he profited from his investment in Petrobras, the state-run Brazilian oil giant.

Natural gas is a great fuel. It may be that natural gas vehicles are the wave of the future. If so, the industry doesn’t need government subsidies, and it certainly doesn’t need higher taxes on the middle class–about which the Democrats have suddenly pretended to become concerned–to enrich the likes of Pickens and Soros.

Surprisingly, a number of Republicans initially supported the NAT GAS Act. But conservative groups have weighed in opposing the act, as have a number of companies and industry groups. Republican support has mostly evaporated, but the Democrats’ commitment to crony capitalism is unwavering, and there is now talk about including NAT GAS in the upcoming omnibus spending bill. Maybe Harry Reid will change his mind if Obama tells him the bill robs the middle class to feed the rich. Then again, maybe not.

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