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Posted by: anonymous on 04/17/2007 09:21 AM
Updated by: admin on 04/17/2007 01:34 PM
Expires: 01/01/2012 12:00 AM
Big companies get their way on interpretation of fuel rule
By DAVID IVANOVICH
Copyright 2007 Houston Chronicle Washington Bureau
WASHINGTON, Millions of American taxpayers may feel a bit grumpy today after cutting checks to the Internal Revenue Service.
But ConocoPhillips and Tyson Foods have reason to be more kindly disposed to the tax man this April.
The Bush administration — after some intense lobbying — has chosen to ignore the objections of a senior Republican leader on Capitol Hill and interpret broadly language in the massive Energy Policy Act of 2005 designed to encourage production of renewable fuels from animal waste.
And that ruling helped enable ConocoPhillips and Tyson to overcome the economic hurdles confronting their plan to use animal fat at the oil giant's existing refineries to make diesel fuel.
The act refers to a process known as "thermal depolymerization." Biodiesel companies say the $1-per-gallon tax credit was supposed to help spur development of boiler fuel from turkey offal and carcasses.
Complaint by Blunt
But ConocoPhillips and Tyson pushed for a looser interpretation. The sponsor of the original provision, Rep. Roy Blunt, R-Mo. — now House minority whip — fired off a letter to Treasury Secretary Henry Paulson last year, warning that a broad reading of that language "is not what we intended."
But in a little-noticed ruling two weeks ago, the administration opted to define thermal depolymerization "generically."
Small renewable energy firms cried foul.
"The tax credit has been hijacked," Brian Appel, chief executive officer of Changing World Technologies, which has been producing fuel from turkey offal. "The idea was to encourage the development of other viable sources of alternative fuels that have the potential to contribute to the national fuel economy."
David Lowman Jr., a Washington-based tax attorney who represented ConocoPhillips on the issue, said Monday, "Treasury interpreted the statutory requirements for renewable diesel consistent with its ordinary, accepted meaning and consistent with the
energy and policy goals of Congress and the administration."
Joe Jobe, chief executive officer of the National Biodiesel Board, which represents biodiesel makers, said his group will now push for a legislative fix to pare down the definition.
With average gas prices again pushing $3 a gallon and proposals to eliminate subsidies for Big Oil extremely popular in Congress, Jobe's members have reason to be optimistic.
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