Shady synfuel industry making billions off tax-credit loophole
A budget bill currently being hashed out in Congress may help a few dozen coal plants continue to get filthy rich off of taxpayer money. The backstory: In 1980, Congress enacted tax incentives for turning coal into synthetic fuel, requiring only that the coal be chemically altered — not necessarily cleaner. The subsidy was designed to be phased out if oil rose above a certain price, the thought being that synfuel demand would increase if oil became too expensive, making subsidization unnecessary. You may have noticed oil prices nudging up lately, but the synfuel industry — which often does little more than spray coal with diesel fuel — continues to rake in public money, to the tune of $9 billion in the last two years. Now an amendment to the Tax Relief Act of 2005, introduced by Sen. Rick Santorum (R-Pa.), would base the synfuel credit on the price of oil in 2004, well within the subsidy loophole. Ah, we love the smell of graft in the morning.