Despite record U.S. natural gas production, the country has yet to make widespread progress in using the resource as a transportation fuel. There is some optimism surrounding the Nat Gas Act, though. As introduced in the Senate on Tuesday, the legislation provides tax incentives to buy natural gas engines, though past efforts of this kind have been slowed and halted by political wrangling.
To the head of Chesapeake Energy , one of the biggest U.S. natural gas drillers, things are different this time around.
"The problem with the bill up until now has been how are we going to pay for it? And are we going to spend money we don’t have?" said Chesapeake CEO Aubrey McClendon during an interview on "Mad Money w/Jim Cramer" on Wednesday. "Well now we’re going to tax ourselves and so if you use natural gas as a fuel, you’re going to pay up to 15 cents or so over the next 10 years to pay for 5 years worth of credit to get the vehicles updated.”
McClendon isn't counting on the bill's passage, but wants congressmen should consider its advantages. The Nat Gas Act provides policymakers the opportunity work on a bi-partisan basis to lower Americans’ transportation bills, create jobs and improve air quality, as fewer vehicles will burn gasoline and diesel, he argued.
While Westport Innovations CEO David Demers supports the legislation, he's not holding his breath.
“Our business can’t depend on waiting for Washington. I don’t think any business can," Demers told Cramer. "We’ve set out to find pockets of the market where there’s a great economic incentive.”
Refuse, for example, as well as trucking companies involved in nat gas exploration are converting their vehicles to the fuel. These kinds of businesses don't need incentives like the Nat Gas Act, Demers explained, because the low cost of nat gas is all the incentive they need. If the U.S. wants to see the entire transportation system move to nat gas, though, Demers said the Nat Gas Act must be signed into law.
The Vancouver, Canada-based Westport Innovations makes technologies that allow engines to operate on natural gas.
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–Reuters contributed to this report
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