Word: coaling
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...home heating oil for $1.60 per gal., in place of today's $2.39. But a select group of investors and companies will walk away with billions of dollars in tax subsidies, not from oil but from the marketing of a dubious concoction of synthetic fuel produced from coal and dependent on government tax credits tied to the price...
...dialed down the thermostats in homes and apartments so they could afford to pay their utility bills. In 1980, Congress enacted tax incentives that were designed to spur the development of a synthetic-fuel industry. The goal was to build huge plants using new technologies that would transform raw coal, which the U.S. has in abundance, into synthetic natural gas and oil to heat homes and factories, power cars and--here comes the ever popular bromide--reduce U.S. dependence on foreign oil. As then House majority leader Jim Wright, a Texas Democrat, put it at the time, "[This] will show...
...prices fell, Washington lost interest in creating a real synfuel industry, and the grand projects to promote energy independence came to nothing. But the synfuel credit remained on the books, dormant, until a group of enterprising entrepreneurs came across it in the 1990s and saw a way to transform coal into gold...
...coal can look and burn like regular coal. The IRS rule for transforming coal into synfuel--and getting the tax credit--requires only that the substance be chemically altered in some way. The alchemy that satisfies the IRS is a simple process: some plants spray newly mined coal with diesel fuel, pine-tar resin, limestone, acid or other substances--a practice that industry critics call "spray and pray." Other operators mix coal-mining waste with chemicals, coat it with latex and blend it with untreated coal to form briquettes. (For an earlier story on the scheme, see "The Great Energy...
Once a few pioneers started reaping the tax credits, it wasn't long before plants using various techniques sprouted next to coal-burning power plants, which buy the so-called synfuel and use it as they would any other coal. Those synfuel operations were a far cry from the state-of-the-art plants that Congress had envisioned as performing a more radical transformation. Instead, they were flimsy facilities that could be easily dismantled and moved to other locations...