Word: taxed
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...burn like coal. It's now called "synthetic fuel." As such, the coal-like product, along with roughly 50 million tons of similar stuff from more than 50 similar plants in Pennsylvania, West Virginia, Alabama and other states, is worth more than $1 billion a year in federal income-tax credits, a corporate giveaway protected by a bipartisan group of supporters in Congress. Those who have profited from the system range from fast-buck artists to giant corporations. They include one of the nation's largest hotel operators, a commodities trader barred from the industry for fraudulent practices, a chain...
...qualify for the tax credits, the makers of this so-called synfuel don't have to prove that they are making a better kind of coal, one that burns more efficiently or offers any other benefit. By IRS ruling, they need only modify the chemical composition of coal. As a result, dozens of plants have sprung up across America to carry out a process that in many cases is so slight that critics call it spray and pray, a reference to their hopes that no one will peek too closely. "You can't believe what goes on," a government official...
...government's policy during that time has failed to produce alternative energy sources. Whipsawed by lobbyists and special interests, taxpayer-supported programs have succeeded mainly in making a few people rich and protecting ineffectual schemes. To be sure, not all energy programs have been a bust. For example, tax credits that gave homeowners an incentive to install storm windows and insulate their homes got results. But the synfuel tax credit is a dead end. It doesn't increase U.S. energy production. It's just a windfall for those who have found a way to exploit it. A TIME investigation into...
...companies that wanted to boost their bottom line. The hotel chain Marriott International Inc., which has 2,500 lodging properties worldwide, bought four synfuel plants in October 2001. The next year, the first full year of production, Marriott's new synthetic-fuel operations generated $159 million in tax credits. Marriott had paid $46 million in cash for the facilities, meaning the tax credits gave the company a return of 246% on its investment in just one year. It was a welcome boost for the company at a time when the average room revenue from Marriott's traditional lodging business fell...
Even when a company's operating income goes down, its profits can still go up if it has tax credits on tap. PPL Montana LLC, a subsidiary of PPL Corp., the holding company for such utilities as Pennsylvania Power & Light and Montana Power, reported that "although operating income from synfuel operations declined in 2002 compared to 2001, the synfuel projects contributed $7 million more to net income after recording tax credits...