(2003-12-01) Synfuels Scam

Just read this horrifying article about the Syn-Fuel scam. To alter coal's chemistry so it qualifies as a synthetic fuel even though it looks and burns like regular coal, some plants merely spray newly mined coal with diesel fuel, pine-tar resin, limestone, acid or other substances. Others mix coal waste with chemicals, coat it with latex and blend it with untreated coal to form briquettes. And plant operators in some extreme cases do nothing at all. Whatever the process, it's still coal... In a rare public display of congressional meddling in a tax (IRS) investigation, industry supporters persuaded a (US Congress) House Appropriations subcommittee to introduce a bill to call off the industrywide audit. It failed to pass in an 8-to-8 vote. Since then, the campaign has moved behind the scenes... To preserve the break, the synfuel industry is lobbying intensely in Washington. The industry's Council for Energy Independence, whose members include Headwaters, GE Capital, Pacific Gas & Electric and other utilities, investment firms and coal companies, has been meeting with officials from Congress and the IRS. Says KennethKies, a former chief of staff of Congress's Joint Committee on Taxation, who heads the effort: "There is a lot of energy being put forth on behalf of taxpayers to force the IRS to back off of this."... The IRS review of the synfuel industry has for the time being halted the buying and selling of credits. Congress could resolve the issue by ending the credit, but it has shown little inclination to do so. In fact, the pending Energy Bill preserves it. Although the credit is due to expire at the end of 2007, until then it's worth $5 billion to $10 billion. And there's always the possibility that Congress will extend it. On four different occasions friendly lawmakers have intervened to rescue it - lawmakers like Orrin Hatch, the Republican Senator from Utah, where Headwaters is based.