American Gas - December 2012/January 2013 - (Page 15)
Pedal to the metal: With the election over, nGVs are only one of several natural gas frontiers to keep an eye on.
McNally is less optimistic. “There’s no broad support and no money for the kind of incentives you would need to aggressively push natural gas vehicles,” he says.
Liquid natural Gas exports
Both Hanger and McNally see White House support for expanded permitting of liquefied natural gas exports—at least to the extent that it doesn’t substantially drive up the price of gas domestically. And both agree that is unlikely that the demand for LNG exports would ever be so great that feared price hikes would materialize. But McNally does see a new post-election hurdle for LNG exports in the U.S. Senate: With the Democrats in control, Sen. Ron Wyden (D-Ore.) is expected to become chair of the Senate Energy and Natural Resources Committee next year. He has expressed opposition to allowing an increase in LNG exports and has said the U.S. should reconsider its existing policy of automatically approving LNG exports to free trade partners. McNally says there could be an upside for natural gas in Sen. Wyden’s chairmanship, however: as a coastal state member, he may be more open to expanding offshore oil-and-gas access than his predecessor.
Tax Incentives
Hanger says a second Obama administration will mean a continuation of the natural gas boom for at least the next four years. But he does see the industry at odds with the president on one issue: tax policy. He points out that the president has been on the record for at least the last two years calling for a repeal of roughly $39 billion in tax incentives for domestic oil and gas production. “Tax breaks for oil and gas will be under siege,” Hanger says. McNally says favorable tax treatment for Master Limited Partnerships—a structure commonly used by natural gas producers—is at risk. But he believes the industry has a real opportunity to preserve at least some incentives—in particular the deduction for intangible drilling costs.
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december 2012/january 2013
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Table of Contents for the Digital Edition of American Gas - December 2012/January 2013