Business

Florida Rolls Out Red Carpet for Natural-Gas Industry

By: William Patrick FloridaWatchdog.org | Posted: May 11, 2013 3:55 AM

Natural Gas

Florida’s state lawmakers love natural gas. The alternative fuel emits less pollution while costing less than gasoline, making potential environmental and economic benefits too much to ignore.

In the past two months the Legislature has agreed to rewrite the rules governing fossil fuel storage, created a public-records exemption for fracking permits and adopted a five-year tax exemption on the sale and use of natural gas motor fuel.

With such broad bipartisan support, Gov. Rick Scott is expected to sign off on all three measures.

But will the advertised cost savings reach the average Florida consumer?

A study commissioned by the Florida Natural Gas Vehicle Coalition, the same lobbyist group that spearheaded the five-year tax exemption, shows that a standard passenger car powered by compressed natural gas costs anywhere from $7,000 to $18,500 more than an equivalent gasoline vehicle.

SAVINGS: Average consumers would have to drive CNG vehicles much longer to recoup upfront purchase costs.The reasoning goes that the cheaper natural gas fuel eventually will offset the cost of the more expensive natural gas vehicle.

But get ready to hold on to that car for a long time. The study says the “payback period” for an average passenger vehicle using compressed natural gas is anywhere from 7.6 years to 20 years, depending on the initial price of the vehicle.

What’s more, that estimate relies on an average gasoline price of $3.82. But the average price of a gallon of gasoline on Wednesday in Florida was $3.45.

Lawmakers and their staff used the economic impact study from the natural-gas group to help write part of the tax-exemption bill.

The nonprofit organization also is a project of the 501(c)4 lobby the Florida Business Consumer Alliance, a group that includes mostly natural gas fuel companies.

Where the big payoff comes in is with large diesel-powered commercial trucks that are on the road much more than your average family car. Diesel fuel, by the way, is selling anywhere from $3.57 a gallon to $3.95 a gallon in Florida.

Despite the average initial cost increase of $76,100 to convert the big-rigs, the payback hits in just  four years, the study says.

But are the taxpayer incentives really necessary? Not really, some people say.

Michelle Rehwinkel Vasilinda

Michelle Rehwinkel Vasilinda

Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee, called the five-year tax exemption special treatment for the natural gas industry, though she has, in the past, been a strong supporter of solar and renewable energy subsidies.

“If you want to boil everything I’m saying down to one word, it's hypocrisy. It’s just so darned hypocritical,” Vasilinda told Florida Watchdog. “If you want to just cut to the chase, I think there’s a big lobby for natural gas. There is a huge lobby for natural gas and common sense has no lobbyist.”

Abigail MacIver, director of policy and external affairs for Americans for Prosperity Florida, said in an email exchange that energy incentives are “simply an effort on behalf of special interests to get favoritism and taxpayer-funded handouts for their industries.”

Adam Putnam

Adam Putnam

In an interview with Florida Trend magazine, Adam Putnam, commissioner of the Department of Agriculture and Consumer Services, says expanding the state’s natural gas vehicles is a top priority.

Taxpayers are footing the bill for matching grants designed to increase the number of natural-gas fueling stations around the state as part of the $126 million State Energy Program.

The FDACS is also offering to pay for the upfront costs associated with natural-gas-powered school buses. But that’s more taxpayer money on top of taxpayer money, critics say.

Like other alternative and renewable fuels, the environmental benefits are clear but consumer savings and taxpayer relief  have yet to be proven.

Nevertheless, according to a FNGVC press release last Thursday, the state’s natural gas vehicle incentive program “could create over 10,000 new jobs, more than $300 million in wages and over $1 billion in economic impact.”

There are no accountability measures in place should the natural gas coalition fail to meet those metrics.



Contact William Patrick at William@FloridaWatchdog.org


Tags: Business, News

Comments (1)

Mitch
8:28AM MAY 11TH 2013
William, You missed the biggest part of the bill--$25,00 per truck and $250,000 per entity per year rebate program. Call me if you want an analysis on background. No attribution to me or reference to “industry sources.” After, you can get quotes from proponents and public officials if you ask direct questions, but you need to know which wrinkles to ask about. Mitch 445-3213c

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