Word: creditably
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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. How important is the tax credit to synfuel producers? In its latest annual report, Headwaters Inc., a Utah-based purveyor of synfuel processes and substances, says flatly, "Headwaters does not believe that production of synthetic fuel will be profitable absent...
When oil 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...
...what Congress had in mind in 1980 when it enacted the subsidy. The idea was to stimulate the birth of a new industry that would make synthetic fuel competitive with the price of conventional oil and gas. To achieve that end, lawmakers pegged the value of the credit to the price of crude oil. If oil prices were to rise above a certain level, the synfuel industry would no longer need the credit to make a profit and the subsidy would be phased out. As long as oil prices were below $50 per bbl., synfuel producers could claim the full...
...experts differ on how high oil prices would have to go to wipe out the full value of the credit, but most agree that if oil were to remain at recent peak levels, or climb even higher, few synfuel operators could claim the full credit. Citing that uncertainty, the Marriott Corp., which has invested in four synfuel plants, temporarily suspended production in January. Before the shutdown, Marriott had racked up $370 million in synfuel profits...