Poor drafting of a law allowing huge tax credits on vehicles that could
run on fuel that was a fraction non-petroleum-based, never intended by the
Legislature, had the state on the hook for a potential large sum, until rescinded
by Gov. Bobby
Jindal on a technicality. But in the same past legislative session that did
not, through (depending upon your view of certain legislators’ motives) lack of
information or dalliance, address that issue, part of a bill made technical
changes to an alternative fuels law that could hit the public harder.
In 2006, the Legislature unwisely passed Act 313, creating R.S. 3:4674 that
mandates production of alternative fuels comprising at least two percent of
fuel sales in the state if a substantial minimum (with the lowest trigger being
10 million for diesel fuel) got produced annually. That target never has come
close to being reached; in fact, of the 28 states that produce any, Louisiana most recently ranked dead
last in both capacity for and production of all alternative fuels at 1.5
million gallons.
Still, the statute remains on the books and this year the Legislature
showed no intention of getting rid of it by passing Act 811
which made technical changes to it and a number of other laws. This despite recent
budgetary actions in the state that have all but defunded alternative fuels
subsidization and reflects the growing national trend, hastened at the
beginning of this year by the end of national ethanol subsidies, towards a
paring back of this kind of assistance, including a quest to repeal
a similar national law already triggered.
Louisiana’s version, which at its core relies upon intrusive government
telling what people could be made available for sale in order to placate
anti-petroleum and rural-based special interests, not only would raise prices
to consumers, but also would stunt growth in use of the one non-petroleum fuel
that the state has found in abundance, natural gas. Consider that in 2010 over
732 million gallons of fuel were sold for road use, if the triggers were hit
nearly ten times what currently is produced then would be mandated to be produced.
Then if consumers don’t bite on the more expensive vehicles needed to run these
fuels, they get hit when forcible production occurs and, unable to sell it all,
producers pass on that cost to buyers of petroleum.
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