There is an article in today's _The Wall Street Journal_ (page A12, first column) entitled "The Black Liquor War".
In this case, "Black Liquor" refers to a material used in paper production.
Congress in 2005 wanted to encourage the use of alternative fuels by providing a fifty cent per gallon tax credit to a business when it used a mixture of fossil fuel and an alternative fuel.
The paper production industry took notice. The have been using "Black Liquor", a paper production byproduct to fuel their factories. Since this was an "alternative fuel", by regulation and law the paper industry noted that if they added a bit of diesel to this mix they would qualify for the tax credit. The tax credit for the paper industry amounts to $6 billion this year.
Why is this relevant to Cap & Trade?
This unintended loop hole was a $6 billion dollar mistake for this one relatively small industry.
Cap & Trade will apply to almost everything and while the "Cap" suggests a maximum for CO2 production, there is nothing in the "Trade" portion that provides any modest limits to the $$$.
When this insanity played out for electricity, what once cost $5 rose in price to $3,000.
A few months of smart careful work by Congress will never match years of work by everyone else.
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1 comment:
So they originally were only using their byproduct and NO fossil fuel? And then added fossil fuel to qualify for the credit?
There's that thing about following the spirit of the law rather than the letter of the law? Is that what the government hopes for? Humankind that is going to do the right thing just for the sake of doing the right thing? Of all people, should politicians know that that's not what makes the world go round?
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