Today Taxpayers for Common Sense Action released a letter to the Senate opposing the inclusion of generous tax breaks for liquid coal in the Tax Extenders Act of 2009, H.R. 4213. The bill extends billions in tax credits for mature energy industries and includes the extension of several coal-to-liquid tax credits. Subsidies for a risky coal-to-liquids (CTL) technology that will have no short-term impact on jobs and could cost billions in taxpayer dollars should not be included in any jobs or tax package. As the total cost of this bill inches up, lawmakers must trim the fat on costly provisions that do little to stimulate the economy.
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Liquid Coal Tax Credits Are Money Losers for Taxpayers
March 8, 2010 Dear Senator, Taxpayers for Common Sense Action urges you to oppose the inclusion of generous tax breaks for liquid coal in the Tax Extenders Act of 2009, H.R. 4213. The bill extends billions in tax credits for mature energy industries and includes the extension of several coal-to-liquid tax credits. Subsidies for a risky coal-to-liquids (CTL) technology that will have no short-term impact on jobs and could cost billions in taxpayer dollars should not be included in any jobs or tax package. As the total cost of this bill inches up, lawmakers must trim the fat on costly provisions that do little to stimulate the economy. Coal liquids are not a cost-effective solution for the nation’s oil and gas dependence and the federal government should not be providing generous tax breaks for its development. To replace just 10 percent of America’s oil consumption with coal derived fuels could cost taxpayers $70 billion in construction costs. In addition to the high construction costs, the success of coal to liquids heavily depends on volatile oil prices. Taxpayers learned the hard way when we lost billions on failed liquid coal projects in the 1980’s. The federal government invested billions in liquid coal facilities only to lose it when mismanagement and oil prices devastated the industry leaving taxpayers with the bill. The high risk and high cost of liquid coal make it a bottomless pit for subsidies. According to Standard & Poor’s, without constant, long-term taxpayer support, CTL projects “are likely to be untenable.”
Extending generous tax breaks to the liquid coal industry is a money loser for taxpayers and will not help address our current economic situation. Subsidies for this costly unproven technology have no place in this legislation. TCS Action urges you to oppose the inclusion of any liquid coal provisions in this or any upcoming legislation. The synthetic fuels push of the early 1980’s failed and there is no need to repeat this costly mistake. If you would like additional information please contact me or Autumn Hanna at (202) 546-8500 or autumn [at] taxpayer.net. Sincerely,
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