Commentary: Three thoughts for Texas on spending emissions settlement

It’s time for Texas to score big on the economic and environmental fronts — and here’s my playbook to make it happen. Consider this an open letter to the Texas Commission on Environmental Quality.

The background: German automaker Volkswagen was caught cheating on emissions tests and settled for $16 billion, with $2.7 billion going to the states to fund mitigation plans which include the creation of medium and heavy-duty vehicle grants. Each state will receive some of the $2.7 billion, and each governor has appointed a department to create a plan to spend it, with the goal of mitigating air quality damage from VW vehicles.

Here in Texas, Gov. Greg Abbott has given rein to the TCEQ to determine a path forward. In recent weeks, TCEQ heard comments on how best to spend the funds allotted to Texas – all $191 million.

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Here are my recommendations for getting the best out of this deal for Texas. Keep in mind: These are one-time funds. You get one shot to spend wisely. So, when the goal is to reduce atmospheric pollutants as much as possible, you look for the cleanest and most cost-effective way to do so.

• TCEQ should focus spending on vehicle grants, because the transportation sector is the largest contributor of nitrogen oxide emissions. More specifically, it would be wise to consider medium- and heavy-duty vehicles. Unlike marine and rail, medium- and heavy-duty vehicles operate across Texas, through urban, suburban and rural areas alike. That’s the best bet for Texas.

• Vehicle grants should be awarded to the alternative fuel that is cleanest per grant dollar. Simply put, it’s about getting the most out of your buck. Some say that electric vehicles are zero-emissions, and therefore, cleanest, though there are a few problems. First, batteries won’t power the heavy-duty vehicles that should be the focus of spending. Second, an electronic bus costs north of $1 million – not the best use of limited funds. Lastly, it’s not clear that they’re the cleanest. When you look at the bigger picture, natural gas vehicles (NGVs) are the better bet. They’re cheaper, allowing Texas to get more vehicles upgraded. And they are likely cleaner, too. In California, NGVs are considered zero-emission equivalent when you factor in electric generation – and they have one of the cleanest grids in the country. For Texas, that means NGVs are as clean, if not cleaner, than electric – and cheaper.

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• TCEQ gets to set the rules – and make it fair for all fuels. Under current terms of the settlement, the scales are tipped. Electric vehicles are eligible to receive grants for 75 percent of the total vehicle cost, while NGVs and all other alternative fueled vehicles are only allowed to receive grants for 25 percent of the cost. TCEQ should level the playing field – and Texas should decide what’s best for Texas.

With those three steps, TCEQ can achieve the goal of the settlement and get cleaner air in the most cost-effective way. But for Texas, it gets better: Incentivizing natural gas means that Texas uses its own natural resources and benefits from the 7.5-percent natural gas production tax. It’s a no-lose scenario.

So, will TCEQ put in place a market-driven plan to deploy cleaner and cheaper vehicles – and as many as possible – on the road? The choice is easy – but it’s up to the commission to do what’s right for our state.

Pickens has been in the oil and gas business for six decades.

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