$9 Billion Loophole for Synthetic Fuel 328
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.'"
Um (Score:3, Interesting)
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)
It's amazing how uninformed members of congress can be.
Re:Um (Score:4, Insightful)
Re:Um (Score:2)
Re:Um (Score:2)
Re:Um (Score:3, Insightful)
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
Re:Um (Score:2)
In the case of Iraq, I agree: we should have declared war first. And part of that should have been informing Congress why we should do it.
Re:Um (Score:2)
In the case of Iraq congress voted to give funds but has not issued an official constitutional declaration of war. Probably because there was no evidence to support any kind of action in Iraq and they couldn't have gotten the numbers required for a declaration o
Re:Um (Score:2)
Re:Um (Score:2)
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)
Re:Um (Score:3, Informative)
You're thinking of the President and Congress. The US military has never unilaterally decided to invade anyone.
Re:Um (Score:3, Insightful)
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.
Re:Um (Score:2)
However, that's a lot different than, say, ongoing -- possibly unconstitutional -- programs. It's
Re:Um (Score:3, Funny)
So, how big a tax break did you get?
Re:Um (Score:2)
Al
Re:Um (Score:2)
The same way people complain that congressmen don't read every bill they vote on... because they're working off assumptions and limited knowledge.
Re:Um (Score:2)
Heck, no. That's a job for interns. Our representatives have more important things to do -- raise money for the next election.
Re:Um (Score:2)
And don't forget: Chase the pretty, young interns (or handsome, young interns -- equal opportunty, etc.)
Re:Um (Score:4, Funny)
Re:Um (Score:2)
How many more "hidden" amendments are out there? I bet the general public would be scared to find out.
Re:Um (Score:2)
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
Re:Um (Score:2)
Of course members of Congress read bills! (Score:2)
Re:Um (Score:2)
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
Those clowns in congress are at it again... (Score:2, Insightful)
Re:Those clowns in congress are at it again... (Score:2)
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
Re:Those clowns in congress are at it again... (Score:3, Insightful)
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.
Re:Those clowns in congress are at it again... (Score:3, Interesting)
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
Re:Those clowns in congress are at it again... (Score:2)
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.
Re:Those clowns in congress are at it again... (Score:2)
Glad the info is coming out... (Score:3)
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.
Re:Glad the info is coming out... (Score:2)
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
Re:Glad the info is coming out... (Score:2)
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.
Re:I Disagree (Score:2)
The epitome of quality television, that is.
Meanwhile... (Score:3, Interesting)
Re:Meanwhile... (Score:5, Interesting)
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.
Re:Meanwhile... (Score:2)
And do you remit fuel taxes to "the man" when you use those forms of fuel?
Re:Meanwhile... (Score:2)
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
Re:Meanwhile... (Score:2)
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.
Re:Meanwhile... (Score:2)
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
Re:Meanwhile... (Score:2)
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
Re:Meanwhile... (Score:3, Interesting)
No.
Longer answer: Even ethanol is energy-positive now.
Longest answer: http://www.mda.state.mn.us/ethanol/balance.html [state.mn.us].
Re:Meanwhile... (Score:3, Informative)
Biodiesel production is much more efficient the Ethanol, and contains significantly more energy per volume.
Biodiesel is also more stable, not as caustic, more efficient, and less poluting in a Diesel car then Ethanol in a Petrol car.
-Rick
Re:Meanwhile... (Score:2)
Really? Biodiesel has significant NOx emissions, and I've never heard of anyone running pure ethanol in any vehicle except for racing, since ethanol is not typically available at the pump. You can get E85, which is still 15% gasoline... And I hear there's an E95 for diesels, which has 5% gasoline in it. Sounds kind of weird, but hell, in the old days Mercedes used to put a reci
Re:Meanwhile... (Score:2)
If the waste products are to be manufactured anyway, shouldn't that be part of the equation?
Re:Meanwhile... (Score:4, Informative)
You obviously haven't thought much about this. Here is a quote from the original "bullshit" article: "Petroleum diesel's life cycle yields only 0.83 units of fuel energy per unit of fossil energy consumed."
You used this information to reach the incorrect conclusion that no one would ever do that because there would be no profit, and therefore the numbers have to be wrong. You are confusing efficiency and profit. Even though it takes more energy to get that gallon of fuel in your car than the gallon produces, you PAY more for it than it cost the oil company to get it there. Oil field to refinery to gas station to car is a very inefficent fuel delivery system, but it is a VERY efficient profit-making system.
Before you go shouting "bullshit" next time you should think about the problem more thoroughly.
Re:Meanwhile... (Score:2)
WRT palm oil, soy oil is supposed to be a nightmare too... just in case you were thinking of moving to that :)
No tax break for you! (Score:2)
-Rick
Re:No tax break for you! (Score:2)
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
Re:No tax break for you! (Score:2)
Because the improvement would be very small. Hybrids offer an improvement over regular gasoline engines primarily due to the relatively high efficiency of electric motors at low RPM's compared to gas engines at low speeds. This helps them a lot with stop and go driving. Diesels develop better torque at low RPM's, giving them the same advantage. At highway speeds however, diesels remain roughly on par with gasoline engines, and hybrids offer little improvement except fo
Re:Meanwhile... (Score:2)
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
Re:Meanwhile... (Score:2)
I'm all for biodiesel, but let's use some realistic numbers.
Re:Meanwhile... (Score:2)
There is a lot more gasoline burned every day than fryer oil thrown out.
Re:Meanwhile... (Score:2)
This is only because Americans don't eat enuough french fries, potato chips, and other fried foods to ensure an adequate supply. Our own public health agencies (like the FDA) actually encourage us to eat less of these things, and by doing this they only deepen our dependence on foreign oil. We can only hope that our President continues his valiant purge of science-worshipping liberals from these agencies and replaces t
9 Billion over three years (Score:5, Informative)
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.
Re:9 Billion over three years (Score:3, Funny)
Re:9 Billion over three years (Score:2, Insightful)
Re:9 Billion over three years (Score:2)
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.
Re:9 Billion over three years (Score:2)
Re:9 Billion over three years (Score:2)
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.
Re:9 Billion over three years (Score:2)
This overall sounds like a *GOOD* idea. Am I missing something here?
Yes, you're deeply missing something here. The government is still spending money. It's not spending $9 billion less money. It's just going straight into the deficit. That means that somebody will have to pay. Who is that somebody? We the people are.
Every bit of corporate welfare
Re:9 Billion over three years (Score:2)
Are you totally unaware of how the tax system works in the US? It's bracketed according to income levels [irs.gov]. Also, those are net incomes, not gross incomes -- so subtra
More socialist bs (Score:5, Insightful)
Re:More socialist bs (Score:2)
Re:More socialist bs (Score:3, Insightful)
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.
Simple technical solution to many such scams (Score:5, Interesting)
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)
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
Re:Simple technical solution to many such scams (Score:2)
Re:Simple technical solution to many such scams (Score:2, Interesting)
This ought to be good... (Score:5, Insightful)
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.
Re:This ought to be good... (Score:5, Funny)
Government screwups (Score:4, Interesting)
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.
Re:Government screwups (Score:2)
Re:Government screwups (Score:4, Informative)
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.
Re:Government screwups (Score:4, Insightful)
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.
Whack-A-Politician (Score:3, Funny)
Do you think they'd start actually reading what they vote for if something like this happened a few times?
Re:Whack-A-Politician (Score:4, Funny)
Republicans *and* Democrats? (Score:4, Insightful)
* 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.
Pine Tar Loophole (Score:2)
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)
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!?"
These companies should not get subsidies at all (Score:3, Insightful)
- 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.
Marriot Corp laughing to the bank (Score:3, Informative)
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!
Direct democracy (Score:3, Funny)
"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!
Re:There loopholes and then there are loopholes... (Score:2)
I'm guessing you didn't -- that or your post was pretty firmly tongue-in-cheek?
Re:There loopholes and then there are loopholes... (Score:2)
Re:What's another 9 billion? (Score:3, Insightful)
Not the fault of the "current administration"
Please buy a (chinese) clue during your next shopping run at Wal-Mart.
Re:What's another 9 billion? (Score:2)
I have no idea how this relates to the OP, but it is funny as hell
Unions are a relic of a era gone, now they hold the cushy jobs of millions of overpaid workers who won't give up anything, and in fact, think they deserve more! So until every company that uses unions slowly dies a miserable death (just look at the auto makers), we will have to put up with them and their crapulence.
Re:What's another 9 billion? (Score:2)
There is a huge mess at the top, Bush is just a figurehead.
Re:What's another 9 billion? (Score:2)
Re:What's another 9 billion? (Score:2)
Re:What's another 9 billion? (Score:2)
Re:What's another 9 billion? (Score:2)
Re:Coal (Score:2)
but the oil must flow...
Read the Fine Article (Score:2, Interesting)
Actually, if you'll read the article, you'll see that they're not even necessarily making oil. That's the outrage.
Re:Fueling the car on the road to nowhere (Score:2)
FairTax won't fix pork. (Score:2)
The beauty of the FairTax is its naive idea that the tax rate would remain universal. This was also the beauty of the income tax system before reality came crashing down on it. Politicians will find ways of handing out favors to campaign donors so
Re:Makes the Fair Tax look even better. (Score:2)
Go read through the site sometime; it's really a scary reality-distortion field they've got going there.
Re:More reason to support this (Score:2)
The principle is certainly sound.
Re:Jimmy Carter started this in 1980 (Score:3, Informative)
I looked through the comments, and only one person even mentioned Bush (technically, his administration). Neither the writeup nor the article blames Bush. So if you're seeing "left-wing idiots" everywhere, maybe it's time to increase your medication.