same with the colorado oil shale. They will build all sorts of pilot plants with taxpayer funds.
Then the oil companies will own what was built. Same as the hydro dams in Montana and I am sure every citizen can find examples in their state of residence.
And when the tax funds dry up they will blow away in the night.
Kirk
"D. Mindock" <[EMAIL PROTECTED]> wrote:
"D. Mindock" <[EMAIL PROTECTED]> wrote:
http://www.wvgazette.com/section/Editorials/2006081010
August 11, 2006
Synfuels
Charade fizzles [but not before they made $billions]
THE federal synfuels tax credit sounded like a good idea in 1980 - give
breaks to companies that create brand-new synthetic fuels to reduce the
nation's dependence on foreign oil.
But in practice, it became partly a rip-off. Some firms produced dubious
fuel, just to cash in on the large U.S. tax credit.
It was amazing what qualified as a synfuel. Some processes involved spraying
already marketable coal with diesel fuel or pine tar emulsions to change the
chemistry just enough to get the tax credit. Some processes actually reduced
the amount of energy the coal yielded. Producers might as well have dipped
the coal in blue cheese and called it an alternative fuel.
Between 2003 and 2005, perhaps 55 synfuel producers claimed $9 billion in
tax credits, Time magazine estimates. That's $9 billion they could simply
subtract from their tax bills. Some had more tax credit than they had tax
bills and sold their tax credits to other companies.
But now this charade is fizzling, because the price of oil soared out of
sight. When petroleum costs only $50 a barrel or so, synfuel producers
qualify for the credit, on the premise that they need a federal subsidy to
compete against oil. By federal law, as oil prices climb past $60 a barrel,
the tax credit declines. At $70 a barrel, oil is considered so expensive
that synfuels should be able to compete on their own, and the tax credit
disappears.
Now that oil prices are up, all 55 coal synfuel plants across the country
have simply shut down. Even with higher oil prices, they say that without
the tax credit of about $26 a ton, it just isn't worth it. They laid off
their workers and quit.
This shows they were in business only to grab the federal giveaway. So much
for using the tax credit to refine processes, develop markets and create
products that could compete with foreign oil.
The synfuel tax credit - which also applies to ethanol and other fuels
produced around the country - will expire Dec. 31, 2007. Congress should
replace it with a legitimate incentive to spur development that would lessen
the nation's dependence on foreign oil.
The United States must stop monkeying around with half-baked plans that
benefit opportunists, and instead put its efforts into developing true
alternative energy sources - and solar power should be at the top of the
list.
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