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$9 Billion Loophole for Synthetic Fuel 328

Posted by Zonk
from the that's-a-dirty-pool dept.
Rondrin writes "CNN has an article detailing a $9 billion loophole in the tax code to spur synthetic fuel development. Unfortunately, spraying coal with pine tar qualifies. From the article: 'The wording is so bland and buried so deep within a 324-page budget document that almost no one would notice that a multibillion-dollar scam is going on. Not the members of Congress voting for it and certainly not the taxpayers who will get fleeced by it. And that is exactly the idea.'"
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$9 Billion Loophole for Synthetic Fuel

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  • Um (Score:3, Interesting)

    by Alex P Keaton in da (882660) on Thursday March 02, 2006 @05:50PM (#14838159) Homepage
    Does anyone think congress reads any of these bills?
    And if something sneaks by, everyone (the public) gets riled up for a few days, and then forgets about it. Short attention spans of the public are great for politicians...
    • Re:Um (Score:3, Interesting)

      by Rei (128717)
      My uncle was in congress when Clinton was president. He found out about the missile strikes on Afghanistan when he saw it on CNN.

      It's amazing how uninformed members of congress can be.
      • Re:Um (Score:4, Insightful)

        by Politburo (640618) on Thursday March 02, 2006 @06:15PM (#14838380)
        Unless your uncle was the chair or ranking member of the Intellience Committee, there's no requirement for him to have been informed of the strikes, iirc, for obvious security reasons.
      • I'm not sure if I got your point, but that's rather different from not reading bills before voting on them, isn't it? A military strike is generally a closely guarded secret and there's no particular reason why Congress should know about it in advance. But how can Congressmen claim to do their jobs (approving or denying laws) if they don't actually read the laws before they vote?
        • Re:Um (Score:3, Insightful)

          by SUB7IME (604466)
          What you're saying makes intuitive sense. As soon as you actually take a look at the voluminous statutes passing through the Congress, though, you'll realize that it would be bordering-on-impossible for one human being to read and understand each piece of legislation that is being voted on.

          In other words, with modern legislation as complex as it is, there is no way for each Congressperson to read each bill. They rely on soundbites from people whom they trust who themselves can only read (substantial) port
      • It was rumored that during Gulf war, Saddam's army fired the scuds, and saw on CNN if they hit the targets.
        • It was rumored that during Gulf war, Saddam's army fired the scuds, and saw on CNN if they hit the targets.

          Saddam maybe, but the guys firing the scuds didn't see shit. Scuds are fired from a mobile TEL (Transporter-Erector-Launcher) vehicle. No TV in those, nor the support vehicles that rolled with them. They operated pretty much by driving out into the desert at night and firing essentially at random. The scud is only slightly more advanced than the old german V-2. In fact, the soviet engineers who desig

        • Re:Um (Score:3, Interesting)

          by samkass (174571)
          That's probably a slight exaggeration, but in the first Gulf War, CNN seemed to have better information than either side's military. I had the opportunity to call in two scuds to the Navy from my house in CT when I was in High School based on CNN's information. I happened to be on the phone to my father who was in the Navy operations and planning center in Bahrain, and told him that CNN was reporting two incoming scuds on Dharan, Saudi Arabia. He told me not to worry, it wasn't happening. I told him tha
      • Re:Um (Score:3, Insightful)

        by TubeSteak (669689)
        Most Congresspeople are specialists.

        They have in-depth knowledge about a few specific national issues (usually because those national issues effect their State) and they know about local stuff. If they know anything else, they're on a committee that has to deal with it, or they've had lobbyists take them to dinner to tell them about it.

        Otherwise, Conresspersons are no more informed than you and me.
      • That's really not surprising, nor alarming.. at least to me. That particular operation was a swift retaliation where time and stealth were of the essence. In fact, I believe the attacks actually missed, as the camps had already been evacuated (just going by memory here). There would have been no reason for Congress as a whole to have known about it in advance, although certain committees were likely briefed.

        However, that's a lot different than, say, ongoing -- possibly unconstitutional -- programs. It's
      • Re:Um (Score:3, Funny)

        by infolib (618234)
        My uncle was in congress

        So, how big a tax break did you get?

    • by creimer (824291)
      Does anyone think congress reads any of these bills?

      Heck, no. That's a job for interns. Our representatives have more important things to do -- raise money for the next election.
      • Heck, no. That's a job for interns. Our representatives have more important things to do -- raise money for the next election.

        And don't forget: Chase the pretty, young interns (or handsome, young interns -- equal opportunty, etc.)

    • Re:Um (Score:4, Funny)

      by TedCheshireAcad (311748) <ted&fc,rit,edu> on Thursday March 02, 2006 @05:57PM (#14838231) Homepage
      324 pages? Maybe if I made $165,200 per year and got free airfare back and forth from home to work....oh...wait...
    • Ok one problem caught.

      How many more "hidden" amendments are out there? I bet the general public would be scared to find out.

      • by jadavis (473492)
        That's why I argue for a limited-scope federal government.

        Ignoring the other aspects of captialism vs socialism, socialism has a huge cost in terms of government administration and corruption. If the federal government did not have the power to enact tax favoritism, there would be no special interests trying to buy some.

        If the government did less, theres a lot less room for sneaking favoritism through Congress. If someone tried, people would stand up and say "why does that person get special treatment?" and
    • Well, the green (little g) ones with lots of zeros on them, anyway. Besides, Frist is probably not the only one to have stock, and it would only take a few to have stock in companies investing in synthetic fuel for that 9 billion to work out to be a hefty profit, even without a single kickback. (Which we all know they're likely to get anyway.)
    • Does anyone think congress reads any of these bills?

      You assume that the result would be any different if they did. This Congress - and I'm referring to a particular political party here - exists for one reason only, and that is to assist their corporate clients as they engage in the wholesale looting of the federal treasury. That's how you get the "bridge to nowhere" and the interminable war in Iraq, and that's how you get what we're talking about here.

      All the other "religious right" nonsense is just ther

  • Of course nobody knew about it. I can't even file my income taxes without the aid of a computer program and a book. It's the same story with the earmarked discretionary spending in transportation bills. None of the representatives could read the entire bill even if they wanted to, and so "pork" is jammed through and the tax payers are left soaked. The lesson is: if the bill is too complicated for ordinary individuals to understand, it's too complicated period.
    • > I can't even file my income taxes without the aid of a computer program and a book. It's the same story with the earmarked discretionary spending in transportation bills. None of the representatives could read the entire bill even if they wanted to, and so "pork" is jammed through and the tax payers are left soaked.

      If the bill is too complicated for ordinary individuals to understand, you still have to comply with it. To the extent that politicians choose to comply with laws, any underlying comple

      • If the bill is too complicated for ordinary individuals to understand, you still have to comply with it.

        WTF are you talking about? If a bill is too complicated you don't comply with it, you vote it down so that it never becomes law.

        ...or at least the congresscritters should, at any rate.

        • Wouldn't it be nice to have a page limit too? I mean, who is going to read through a 300+ page document and agree/disagree with the whole thing? Break it into smaller chunks that can be digested by regular Americans, and voted on in a straight forward manor. Instead of this tax breaks for the rich on troop funding bills crap.

          I'm glad there are at least a few senators out there like Feingold who actually take the time to look into some of these bills and to vote against them, even if it is just symbolic. At
          • Wouldn't it be nice to have a page limit too? I mean, who is going to read through a 300+ page document and agree/disagree with the whole thing?

            Well hopefully the elected officials, it is after all, just their FUCKING JOB for crying out loud.

            I mean they are corrupt,child-raping,murdering assholes but their fucking laziness is what really rubs.
    • I always wanted to sit down and read the tax code and make my own tax forms (big corperations have to do this because there is no tax form for some of the really obscure stuff like this) for every single part of my close to poverty income.. Not that I have time for such stuff mind you.
  • by ursabear (818651) on Thursday March 02, 2006 @05:58PM (#14838234) Homepage Journal
    I'm glad this has been found and is being proffered to the public to read.

    It is important that the public is aware when this type of thing is smothered in mind-numbing pages of legal pap. If it makes you mad, write your representative/senator. I did.
    • http://en.wikipedia.org/wiki/Synthetic_fuel [wikipedia.org]

      The fine wikipedia says: "Synfuel is any liquid fuel obtained from coal"

      And it was invented by the Nazi's: "The best known process is the Fischer-Tropsch synthesis which was used on a large scale in Germany during the WW2."

      And: "At the present price of crude petroleum, synfuels are not competitive with petroleum-based fuels without subsidies. However, they offer the potential to replace petroleum-based fuels if oil prices continue to rise. "

      So, If I underst

      • So, If I understand correctly, Jimmy Carter started the subsidy program to produce fuel the Nazi way - who would have guessed.

        Do you want the world to ignore 15 years of scientific innovation from one of the world's largest economies simply because of the Nazi party? To answer your question, no, you do not understand correctly.

        Judging by your post, I'd wager you don't understand anything at all, actually.
  • Meanwhile... (Score:3, Interesting)

    by misfit815 (875442) on Thursday March 02, 2006 @06:04PM (#14838282)
    My diesel automobile could easily run biodiesel refined from old fry grease from the McDonald's down the street if only Uncle Sam would shove Big Oil out of the way and let it be refined. Nevermind that the process could easily be done for under $1.00 a gallon. Nevermind that it doesn't depend at all on the Middle East. Nevermind that it burns cleaner than either regular diesel or gasoline. Bah.
    • Re:Meanwhile... (Score:5, Interesting)

      by drinkypoo (153816) <martin.espinoza@gmail.com> on Thursday March 02, 2006 @06:20PM (#14838416) Homepage Journal

      My diesel automobile could easily run biodiesel refined from old fry grease from the McDonald's down the street if only Uncle Sam would shove Big Oil out of the way and let it be refined.

      Never mind that you (yes, you!) can get a permit for small-scale biodiesel production.

      Also, you don't even have to refine it! Get a $795 kit from greasecar [greasecar.com], a $1200 kit from greasel [greasel.com] (bad idea) or a $1100 kit from Elsbett [elsbett.de] (best idea, if you have the money) and you can run on vegetable oil. You only need [bio]diesel for startup and shutdown, and if you get the Elsbett kit, you can put whatever fuel including WVO into the same tank and start up on it, too.

      Biodiesel costs about $0.25/gallon if you make it yourself. Deacidifying and dewatering average fryer oil costs about $0.05/gallon. WVO has about 85% the energy of biodiesel, so you will get less power/mileage on oil, but it's cheaper, and easier. You can, however, build a biodiesel processor for around $600.

      I have a 1981 Mercedes 300SD and plan to get the Elsbett kit, which is spoken of very highly everywhere I've seen a reference.

      • Biodiesel costs about $0.25/gallon if you make it yourself. Deacidifying and dewatering average fryer oil costs about $0.05/gallon.

        And do you remit fuel taxes to "the man" when you use those forms of fuel?

        • Shit no. But, if you SELL them, you have to collect taxes. You also need more permits and such. The Solar Research Institute [solarliving.org] in Hopland, CA sells biodiesel [solarliving.org]. I'm not sure what they charge (or if the recent flood wiped them out too much to sell bio, or what) but last I looked (when fuel prices were over three bucks) they were charging $3/gal.

          AFAIK it's not illegal to put your own fuel in your vehicle, like it is to put kerosene or farm diesel into your car. It's probably illegal to provide it to someone e

          • Fuel taxes are (supposedly) for the roads and any road vehicle should be paying them.

            I do believe that it is illegal to put farm diesel into a road car or truck. The only difference between "farm" diesel and "road" diesel is the lack of fuel taxes on the former.

            • I do believe that it is illegal to put farm diesel into a road car or truck. The only difference between "farm" diesel and "road" diesel is the lack of fuel taxes on the former.

              That is quite correct. "Farm" diesel has a dye added to it so they can tell them apart, if you have a clear fuel filter anyway (I do, right before the screw-in filter that looks like a little oil filter.) In California, fuel taxes are around $0.465 per gallon IIRC.

              However, I believe there's a difference between making fuel a

              • People run tractors (and other big things) with farm fuel on the road quite frequently. But the primary purpose of those implements is not over the road travel - I think that incidental usage on the road (hauling grain to market, moving between fields) is acceptable - throwing some of the same fuel into your pickup to drive to Capital City is probably not acceptable.

                That doesn't mean that it's not done or that collecting taxes on home made fuel is easy.

                I was just sort of pointing out that a large chunk

    • And what's worse, a VW Golf tdi (turbo diesel) that gets 45mpg on biodiesel with emissions far below that of high efficiency gasoline cars are not elliable for the green car tax credit. I would love to see a comparison of exhast emissions mass per mile comparison between the Prius and the Golf tdi. The Prius should win in city driving, but I would bet on the Golf for highway.

      -Rick
      • I would love to see a comparison of exhast emissions mass per mile comparison between the Prius and the Golf tdi. The Prius should win in city driving, but I would bet on the Golf for highway.

        You don't need to do a test, the BioDiesel Golf will always win. The Prius uses fossil fuels, so all of its emissions represent a net increase in atmospheric pollution. Biodiesel is made from plants that grow on the earth's surface, so all emissions from burning BioDiesel simply recycle surface chemicals from one form
    • So get a biodiesel reactor system, like my friend just did, and start making your own. The upfront costs are moderate (a few grand to start with, about equivalent to the price hike when buying a hybrid vehicle), and you can sell your excess fuel to make your money back over time.

      Three days ago I went out to his place and helped him do a batch. 40 gallons at once, and it only took an hour and a half. If he did it continuously he could make hundreds of gallons per day. The oil is readily available from a r

    • I don't know where you're getting your numbers, but you're obviously talking about getting the vegetable oils themselves for free. Bulk soybean oil (about the cheapest vegetable oil you can get) is a little over $2/gallon last time I checked.

      I'm all for biodiesel, but let's use some realistic numbers.
  • by pizzaman100 (588500) on Thursday March 02, 2006 @06:07PM (#14838309) Journal
    Note that the 9 billion dollar credit is how much they got in 3 years.

    FTA: From 2003 through 2005, TIME estimates, the synfuel industry raked in $9 billion in tax credits. That means the lucky few collectively cut their tax bills by that amount, which would be enough to cover a year's worth of federal taxes for 20 million Americans who make less than $20,000 a year and pay income taxes.

    So while this tax loophole sucks, it's $3 billion a year not $9 billion. That means it's a year's worth of taxes for 6.6 million people who make 20K, not 20 million.

    • by Anonymous Coward
      Phew - that's a relief, I knew there was no scam.
    • You're correct, but I don't think they were comparing year-by-year. They were just putting the $9 billion number in perspective. Something like "Bill Gates is worth $30 Billion dollars, which could feed X Millions of people 3 meals a day for a year..." even though he didn't make all that money in a year. Just a comparison.
    • ... while this tax loophole sucks, it's $3 billion a year [for three years] not $9 billion [for one year.]

      Yes.

      That means it's a year's worth of taxes for 6.6 million people ...

      No. 3x3 is still 9, so it's still one year's tax for 20 million people, or, if you prefer, 3 year's tax for 6.6 million people.
    • Thanks for clearing that up, that makes me feel SO much better. For a second there I thought they exploiting a loophole in the system. Good thing its only just 1/3rd of a loophole. Wake me when they got 3 of them, then I'll consider caring again.
    • So while this tax loophole sucks, it's $3 billion a year not $9 billion. That means it's a year's worth of taxes for 6.6 million people who make 20K, not 20 million.

      Actually, it is a year's worth of taxes for 20 million people earning $20K/yr. Less than one in three citizens at that income level file with the IRS or otherwise pay federal income tax.
  • More socialist bs (Score:5, Insightful)

    by geekee (591277) on Thursday March 02, 2006 @06:11PM (#14838343)
    Although people think of programs like welfare when they hear the term socialism, govt. incentives to help business are the same thing. You can argue that giving incentives to companies to produce technology in areas the US needs to be headed in is a good thing, but don't be surprised when the money is ill spent. Unlike in a corporation, where people are fired for wasting money, in govt. you win elections for getting tax dollars into your district, even if they are being spent on something completely non-productive.
    • When you grow up and get a job in a corporation, get back to us, okay? I've worked for some large corporations in my day, and my experience is that what gets you hired or fired is how good you look, not what you've actually accomplished or failed to accomplish. Neither government nor corporations are inherently good or bad about this. It depends entirely on how good the management is. In the case of government, the management is us. In the case of a corporation, the management is whoever it is.
    • by SirSlud (67381)
      > where people are fired for wasting money

      If you believe that, its pretty obvious you've never worked at a large corperation. Theres a reason theres a term 'office politics' - its because the same bullshit *some* people seem to think only exists in politics also occurrs in capitalist organizations.

      You're an idealist, and as such, you'll always be far from the truth when using critical analysis becuase the axioms of your arguments simply don't exist in the real world.
  • by straponego (521991) on Thursday March 02, 2006 @06:16PM (#14838389)
    Often sleazy little tibits like these are inserted at the last minute into a bill hundreds or thousands of pages long. When the votes are taken, nobody is even aware of the changes. Congress critters complain about having voted for something they didnt know about, but none of them seems to want to address the problem.

    So, why doesn't Congress use a revision control system? When the day comes to vote on a bill, you check for changes since the last time you read it. If there are changes, you know who made them and when. Your basic audit trail.

    I suspect that one of the reasons something like this hasn't been implemented yet is that most politicians are habitual defectors rather than cooperators; they may not want their enemies to be able to use dirty tricks, but they'd like to be able to do it themselves.

    Ah, besides. Can you imagine Congressional debate on whether to use CVS, svn, or... what am I thinking? Free software wouldn't even be on the table.

    • Yes! (Score:3, Interesting)

      by Valdrax (32670)
      I have long been a proponent of this idea, but it needs to expand beyond each bill and its amendments. If you've ever read a huge bill like the Patriot Act, you know that a lot of any bill is modifications to existing law.

      We need to be able to see diffs on existing law in addition to diffs on the bill being passed. In addition, any amendments should show what was changed in the bill and existing law. The main problem with this idea is that it would rely on either natural language processing or interns (w
    • knowing Congress, it would be Sourcesafe and the documents would be in Microsoft Word format so that it would be impossible to run a diff on them to see the changes... and the bastards would turn "track changes" off when they want to sneak something into the .doc
    • Congress does have a version control system and it is very well-established. It is part of any legislative history to pull all versions of a bill --which shows the chronological development of a bill as a submitted bill is amended in the legislative process. The main problem is, no one bothers to read even the current version, let alone all prior versions. Laziness aside, there is simply more legislative paperwork put out in a single term of Congress than one person can read. There is on the order of tens
  • by symbolic (11752) on Thursday March 02, 2006 @06:20PM (#14838418)
    Republicans and Democrats alike pledging to crack down on influence peddling,

    Riiiight. Pardon my underwhelming response, but I seem to remember a similar effort to "crack down" on campaign finance abuse. Oh wait...that has yet to happen. And this is something else that will also probably never happen. Any elected person worth their weight in salt (literally) knows that exercising care not to bite the hand that fills the campaign trough is far more pressing than more mundane issues - like maintaining a sense of integrity. I'm filing this in the "I'll believe it when I see it" category.
  • Government screwups (Score:4, Interesting)

    by Slappytron (954489) on Thursday March 02, 2006 @06:31PM (#14838521)
    This is not news. This was in Time a few years ago. Apparently there are several Pennsylvania and West Virginia coal mining companies that paid little to no taxes for 5 years by rigging up some tar spraying system over their coal cars.

    This is another example of why you cannot rely on the government to "solve" these fuel problems. They end up making bad situations worse. Take the oil crisis of the mid 70's. The government tries to solve the problem by implementing price controls instead of letting market forces take hold and lowering demand. They end up running half the stations out of business for a time and creating huge lines at the ones that do manage to stay open. I'm not a Bush fan, but he should be praised for leaving things alone after Katrina. Gas prices worked themselves out because people became concious of their consumption. Demand fell, prices fell. The Market worked.

    • Since the raise in gas prices is his fault, I'll with hold my praise, thank you very much.
    • by gumbi west (610122) on Thursday March 02, 2006 @08:49PM (#14839477) Journal
      What is new is that the loop-hole disappeared b/c the price of a barrel of oil went above $50 -- so now the producers want the cap removed so they can get the money all the time.

      This cap was placed in to improve predictability. Oil was above that mark and they decided that the companies investing in this should get a subsidy if the price of oil went down. So when gas is cheap, producers get a subsidy, and when it got expensive they would have to make it on their own (it should be economic when oil is very expensive). The basic idea is to help them make it through any short term dip in oil prices.

      Now, Senator Hatches office claims that removing the cap is necessary to reduce unpredictability b/c of the fluctuating price of oil. I'm not sure I understand the logic.

    • by danpsmith (922127) on Friday March 03, 2006 @11:42AM (#14842703)
      This is another example of why you cannot rely on the government to "solve" these fuel problems. They end up making bad situations worse. Take the oil crisis of the mid 70's. The government tries to solve the problem by implementing price controls instead of letting market forces take hold and lowering demand. They end up running half the stations out of business for a time and creating huge lines at the ones that do manage to stay open. I'm not a Bush fan, but he should be praised for leaving things alone after Katrina. Gas prices worked themselves out because people became concious of their consumption. Demand fell, prices fell. The Market worked.

      I marvel at this neo-capitalistic, liberatarian viewpoint on everything. I hear it a lot here. The market will work itself out. The market works towards a monopoly that creates barriers of entry. If government can't police the market at least a little bit, then we don't even live in a democracy anymore. Because when you vote with your dollar, your vote only counts as much as the contents of your wallet. Maybe this is an issue with the way in which government attempts to help things instead of an issue of them helping at all. Government funds a lot of research that would otherwise not happen because it is unprofitable. Just because it's bureacratic and awful doesn't mean the free market is the answer, it means we need to make it a better government.

  • by amigabill (146897) on Thursday March 02, 2006 @06:33PM (#14838531)
    I say we convince a congressman somewhere to sneak a small snippet into some must-pass law oen of these days. A snippet that would allow me once a year to show politicians what I think of their work by requiring each politician to allow me to smack them upside the head. And make a big shindig of it all, invite the press, hire a caterer, and of course all a tthe taxpayers' expense. This snippet of law would not allow anyone to back out of getting smacked. What a great way to spend one day a year, and it could be a heck of a party. National Politician Smacking Day, everybody gets off work to watch it on TV and everything.

    Do you think they'd start actually reading what they vote for if something like this happened a few times?
  • by stomv (80392) on Thursday March 02, 2006 @06:40PM (#14838594) Homepage
    Interesting how they tie the giveaway to current Republicans and Democrats and yet who is mentioned supporting the giveaway in the article?

      * Charles Grassley, Republican (IA)
      * Rick Santorum, Republican (PA)
      * Gordon Smith, Republican (OR)
      * Orrin Hatch, Republican (UT)

    Who is mentioned as being against the giveaway?

      * Lloyd Doggett, Democrat (TX)

    So maybe it's the so-called "liberal media" who is just raking the GOP over the coals. Or, maybe it's representative of trying to show the corrupt GOP Congress as being bipartisan in a weak attempt to appear "fair and balanced."

    In this case, I suspect it's the latter. YRMV.
  • Unfortunately, spraying coal with pine tar qualifies.

    Cool! I'm spraying my house and car with pine tar. Hell I'm spraying thew cat with pine tar! Come on tax break!

  • OK, I'll bite... (Score:3, Informative)

    by layer3switch (783864) on Thursday March 02, 2006 @09:47PM (#14839797)
    "... spraying coal with pine tar qualifies..."

    Ummm.. ok, so what's wrong with that? Last time I checked, carbonization (heating and compressing wood) produce coal tar and pine tar which also is used to produce acetic acid, methanol, and turpentine.

    Excerpt from Wikipedia about acetic acid:
    "Liquid acetic acid is a hydrophilic (polar) protic solvent, similar to ethanol and water. With a moderate dielectric constant of 6.2, it can dissolve not only polar compounds such as inorganic salts and sugars, but also non-polar compounds such as oils and elements such as sulfur and iodine. It readily mixes with many other polar and non-polar solvents such as water, chloroform, and hexane. This dissolving property and miscibility of acetic acid makes it a widely used industrial chemical."
    Another word, it gives off extra Hydrogen when mixed with water. So it's used to produce hydrogen cheaply... hmm that's a bad thing?

    Excerpt from Wikipedia about methanol:
    "Methanol is used on a limited basis to fuel internal combustion engines, mainly by virtue of the fact that it is not nearly as flammable as gasoline. Methanol blends are the fuel of choice in open wheel racing circuits like Champcars, as well as in radio controlled model airplanes, cars and trucks. Dirt circle track racecars such as Sprint cars, Late Models, and Modifieds use methanol to fuel their engines. Drag racers and mud racers also use methanol as their primary fuel source. Methanol is required with a supercharged engine in a Top Alcohol Dragster and all vehicles in the Indianapolis 500 have to run methanol. Mud racers have mixed methanol with gasoline and nitrous oxide to produce more power than gasoline and nitrous oxide alone."
    hmm... sounds like alternative fuel to me... or maybe I'm not getting this article's punch line.

    Umm.. so what am I missing here? Is there supposed to be a punch line in the article where I supposed to go "Ah, those GOP rascals!?"
  • by SmilingBoy (686281) on Friday March 03, 2006 @07:14AM (#14841625)
    Let me get this straight:

    - Synfuel is meant to be a petrol and diesel replacement produced from coal (for mor information look at the South African company Sasol: almost half the country's requirement of petrol are made of coal. And yes, it works just fine.

    - At high oil prices owning real synfuel technology is like a licence to print money. You take cheap coal and turn it into expensive petrol.

    - You may argue that synfuel production is unprofitable at low oil prices and therefore, subsidies are needed at low oil prices to make companies invest into this technology.

    And the last thing is precisely what the US government intended with its tax break. I don't want to say that it is sensible tax break, but I think some people would argue it is.

    So, to summarise:
    High oil prices -> Synfuel producers make money because they can sell their synpetrol at high prices
    Low oil prices -> Synfuel producers make money because they get a subsidy.

    HOWEVER, the companies described in the article do not produce synfuel. They simply make a nonsense modification to the coal that qualifies them for the taxbreak. Therefore, they do not benefit from high oil prices as a real synfuel producer would.

    So now, they are lobbying to get their taxscam going that has NO benefit to the public at all.

    What lawmakers should do: Tighten the definition of synfuel so only real synfuel producers qualify for the tax break. These will be happy with high oil prices and although they will still want the tax break at high oil prices, they shouldn't get it as they are making enough money on their own.

    SmilingBoy.
  • There is more info on Marriot's "synfuel program" in James Howard Kunstler's book The Long Emergency [amazon.com].

    They bought four "synfuel" plants in Oct 2001 for $46 million in cash. The next year, those plants generated $159 million in tax credits. So instead of paying an annual income tax of around 36.1%, like they did in 2001, they only paid 6.8% in 2002, "due primarily to the impact of our synthetic-fuel business."

    Not bad for "a few pole barns and conveyor belts where coal was sprayed...with small amounts of diesel oil, pine tar resin, and other substances."

    After making $370 million in five years, I'd be ready to bail out too. That's just over 800% ROI. Buy low, sell high!

  • by couch_warrior (718752) on Friday March 03, 2006 @06:14PM (#14846358)
    In the movie "Superman", Perry White, editor of the daily planet says -
    "I want the name of this paper and Superman to go together like peanut butter and jelly, like politics and corruption...."

    The problem is basically this - you have created an office that gives the holder permission to spend the peoples money that they exert no effort in earning. THEN you have created an election process that requires millions of dollars to be spent to achieve that position of authority. How many seconds does it take the average fool to figure out that you can use those "public funds" and give them to firms that will kick back a fraction of the proceeds as the legalized bribery that we call "campaign contributions".

    Then you act surprised that federal spending is full of "gifts" to large companies. Sheesh - did you go to school on the short bus?

    There is one good way to fix this -

    A constitutional amendment that disempowers Congress and substitutes a direct democarcy. Every taxpayer - along with their federal tax return, gets to say where the money they are "contributing" gets spent. Congress would assemble a sales catalog of possible federal programs, and taxpayers would pick and choose how much to spend on each one. Taxpayers would also get to vote each year on raising or lowering the tax rates.

    THAT would put some radical reform into the federal government!

"The greatest warriors are the ones who fight for peace." -- Holly Near

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