The bill extends the Investment Tax Credit for vehicle fueling infrastructure for electricity, hydrogen, high ethanol blends (E-85), high biodiesel blends (B-20), natural gas, and propane. The tax credits, set to expire at the end of this year, would be extended through 2028. The bill also raises the cap on such credits from $30,000 to $200,000. It also clarifies that the cap applies to each piece of refueling equipment at a location and is not a total cap for a location.
It is hard to imagine circumstances where this bill is needed any less. Both conventional gasoline and diesel fuel prices are very cheap by historical standards—and adjusted for inflation may be close to their cheapest ever. Prices are unlikely to appreciably rise any time soon. And concerns about dependence on foreign oil—which along with fears of rising gasoline and diesel prices had been one of the initial reasons for subsidizing these alternatives—have been greatly reduced by America’s fracking revolution. In fact, if there is any energy crisis at the moment, it is the crisis of insufficient storage for America’s glut of petroleum and refined products.
In other words, the bill subsidizes alternatives to a product for which America suffers from a severe oversupply and historically low prices.
All that is left are the various environmental rationales for switching from petroleum derived fuels, but even these have taken a hit with revelations that each of the alternatives favored by the bill presents concerns of their own.
Nor can any of the recipients be considered infant industries in need of initial assistance to become competitive. All of the alternatives eligible for the tax credits have been around for decades and have enjoyed preferential tax and regulatory treatment over that span. The idea that any are at the cusp of some big breakthrough in consumer acceptance is no longer realistic, especially now that low gasoline and diesel prices are one of the few economic bright spots for consumers during the coronavirus pandemic.