It is almost universally agreed that the US energy policy is incoherent and unintelligible.

It is enlightening to learn that the US is both reducing its Greenhouse-Gas emissions and becoming more energy independent.

It was reported recently that the share of US energy demand met by domestic sources increased to 81% through the 1st 10 months of Y 2011, the highest level in 20 yrs, and emissions are expected to decline 12% by Y 2020.

A major factor in both trends is increased use of Nat Gas, a cleaner-burning fossil fuel now being extracted in abundance across the US.

Hydraulic fracturing, a new production technology also known as fracking, has helped push prices for the fuel to a decade low, and has created lots of good jobs in the process.

To be expected a large lobbying effort has attached itself to this business, advancing strong visions of an America free of Middle East Crude Oil, cleansed of carbon pollution and humming with new Nat Gas-powered vehicles, if Congress provides a few billion in tax credits to get the industry really up and running.

Nat Gas has many advantages, which is why the industry does not need more US government assistance.

Those seeking federal aid argue that the costs of switching to Nat Gas on a large scale are prohibitive for trucking companies and consumers.

But, the fact is that trucking companies are buying more long-haul Nat Gas trucks now because the fuel is cheap.

The annual savings over diesel can add up to $20,000 per truck, so a company can recoup the extra cost of the new technology in about 2 yrs.

On the consumer side, Chrysler Group LLC and General Motors Co. (NYSE:GM) announced that they plan to build pickups that use compressed Nat Gas, joining Honda Motor Co.(NYSE:HCM), which sells a version of the Civic that runs on Nat Gas.

To meet increased demand, companies are building infrastructure on their own: Clean Energy Fuels Corp.(NASDAQ:CLNE), a provider of Nat Gas fuel for transportation, plans to build 70 Liquefied Nat Gas (LNG) stations by the end of Y 2012.

General Electric Co. (NYSE:GE) and Chesapeake Energy Corp. (NYSE:CHK) have tied-up to help make compressed Nat Gas available at more filling stations.

Honda plans to install fueling stations at some of its dealerships. Fleets of taxis, trucks and buses across the country are using the fuel in growing numbers.

So, market forces are working. It is not clear yet what will be the most efficient means to get Nat Gas to power vehicles, as many options are on the table. But the private sector is the best place to experiment.

Billions of dollars in government subsidies will only further distort the energy sector, threaten to create another industry reliant on Washington's largesse and drive up prices by artificially boosting demand. Such support could also crowd out promising renewable energy sources.

The US Congress for the moment is showing restraint.

On 13 March, legislation providing tax credits for Nat Gas backed by billionaire investor T. Boone Pickens failed to pass the Senate. A House version of the bill also looks unlikely to pass.

The issue will come up again, and when it does, the government's role in encouraging Nat Gas should be modest.

On the supply side, the government should start minimizing uncertainty about the future of fracking by drawing up a clear regulatory plan to protect communities without unduly burdening a promising industry.

Washington should avoid meddling in the Nat Gas industry while continuing to support research and development for renewable's.

That means mean taxpayers should not subsidize the Nat Gas for Vehicles business IMO.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.