Amid all the gridlock in Washington, a little-known bill that
could create jobs and be a crucial key to our energy future is
showing signs that it could get passed any day now.
Even better, it could lead to yet another green light for investors
in a certain group of stocks.
It's called the New Alternative Transportation to Give Americans
Solutions (NAT-GAS) Act.
On Sept. 21, following a general conversation about energy tax
incentives, two separate subcommittees within the U.S. House Ways
and Means Committee opened the floor to debate, and several members
stepped forward to discuss the pros and cons.
It has been a while since the first attempt to speed up the
development of natural-gas-based transportation stalled out in
Congress. But this second iteration, again championed by
billionaire industrialist T. Boone Pickens, seems to have more
The Bill (H.R. 1380) has 186 cosponsors and enjoys broad bipartisan
support. It's still a long road to the President's desk, and the
legislation could get derailed at any point along the way. But
there's vigorous discussion taking place right now -- and for
proponents, that's at least a start.
So how could passage of this bill benefit investors? The Nat-Gas
Act provides heavy financial incentives to encourage the adoption
of vehicles that run on compressed natural gas (CNG) and other
Among other perks, the bill specifically calls for infrastructure
credits to help defray the expense of installing fueling stations,
along with a credit to reimburse up to $7,500 for passenger trucks
and $64,000 for commercial trucks that run on natural gas fuels.
In an era where high gas prices are acting as a brake on the
, the switch to cheaper CNG (which can save $2 per gallon at the
pump compared with diesel) is a no-brainer in the eyes of some --
which is why fleet owners such as
are slowly making the transition.
If even half of the heavy-duty trucks on the road make the switch,
the United States could cut its appetite for foreign oil imports by
1.2 million barrels a day. At current prices, that's $100 million
staying here in the United States each day.
According to studies, the bill could also create 400,000 jobs, and
some politicians will no doubt seek to score political points by
attaching their names to it in this dismal labor
On the other hand, with most Americans fed up with government
spending and clamoring for budget cuts, this is the worst possible
time to ask for $5 billion in new handouts, regardless of how they
will be put to use.
But there are some highly influential people behind the development
of natural-gas-based vehicles, including House Speaker John
Boehner, R-Ohio, and President Barack Obama (unlikely allies on
this one). Even some Tea Party members (the most ardent and vocal
budget-slashers) are on board, including Rep. John Sullivan,
R-Okla., who introduced the bill.
The cynical might say that some of those votes have been bought (62
companies lobbied for the bill's passage last quarter, handing out
a reported $25.3 million in the process).
I'm not here to weigh-in on the bill's political merits, just to
comment on how this might play out for investors. By my score, the
bill will pass through the House without too many roadblocks,
although it could get bogged down in the Senate once again.
But there is certainly room for compromise. And with ethanol
subsidies all but flat-lined, I think CNG will step in and soak up
some of that support.
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Many stocks tied to natural gas have rallied -- not because the
government might sweeten the proposition, but because it hasn't had
to. The private market has already made several bold investments on
its own, including Chesapeake's $1 billion venture with
Clean Energy Fuels (Nasdaq:
and other partners.
That free-market spending speaks volumes.
Should the government lend its financial support, some experts
believe there could be as many as 350,000 NGV trucks on the
nation's highways within the next few years, spending $3.5 billion
on natural-gas derived fuels each year.
The NAT-GAS Act will undoubtedly face tough opposition. But even
without it, I see much stronger demand for natural gas on the
horizon (I gave readers of my
Scarcity & Real Wealth
newsletter six or seven iron-clad reasons why recently.
Click here to find out more
Aside from Clean Energy Fuels, this will mean big rewards for
well-positioned producers such as Chesapeake and
Range Resources (NYSE:
, among others.
[If you're interested in learning more of my favorite resource
watch my special presentation by clicking here
-- Nathan Slaughter
Disclosure: Neither Nathan Slaughter nor StreetAuthority, LLC
hold positions in any securities mentioned in this article.