Monday, October 06, 2008

Bailout bill boosts coal, oil shale and tar sands, but slashes a tax credit for biodiesel from animal fat

The financial-system rescue bill contained boons for coal gasification and liquefaction, and development of tar sands and oil shale, but cut in half a tax credit for converting animal fat into diesel fuel.

"The bailout package includes a 50 percent tax write-off on refinery construction, which would assist the oil shale and tar sands industries," writes Julie Cart of the Los Angeles Times. "The bill extends production credits for coal gasification plants and includes the end product, aviation fuel, in the alternative fuel category. . . . Critics of the measures note that the [coal and shale] breaks run counter to the carbon-reduction message Congress intended when it vowed to bankroll clean, renewable technology. And a substantial portion of the tax breaks go to energy companies already flush with record oil profits." (Read more)

The bill extends the tax credit for wind-energy production and biodiesel for a year, through 2009; "and the alternative fueling credit for ethanol blended gasoline (E-85) infrastructure, through 2010," notes Janie Gabbett of MeatingPlace.com, a journal for the meat industry. "It also cuts the federal tax credit to 50 cents per gallon from the current $1-per-gallon for companies that use animal fat to make renewable diesel fuel."

That threatens an 11-month-old project of Tyson Foods and ConocoPhillips to convert tallow from Tyson's beef-processing plant in Amarillo into diesel fuel at the oil company's refinery in nearby Borger, animal fat into diesel fuel. "Without the current $1 per gallon credit it is unlikely this venture will remain economically viable," Tyson spokesman Gary Mickelson told Gabbett. The plant is producing 300 to 500 barrels per day. (Read more)

1 comment:

John Maszka said...

This bailout is just one more example of the indivisible handjob stroking irresponsible CEOs and CFOs with billions so that they can run the American economy even further into the ground. So much for Keynesian economics. If the goal is to stimulate the economy, why not give the money directly to the American taxpayer? A bird in the hand is worth two in the bush administration.