Turning Black Liquor into Gold–And You Pick Up The Bar Tab
By Pat Racimora on April 5, 2009 at 3:16 PM in Corruption, Tax stimulus package
Why are these happy guys celebrating? According to a disturbing story by Christopher Hayes they may have just scored lots of our hard earned tax dollars by doing something outrageous.
Let’s start from the beginning so you can see how shameful this travesty is. Black Liquor provides much of the fuel used to make paper. The great thing about Black Liquor is that it is a byproduct then put to good use.
Hayes describes it as follows:
Since the 1930s the overwhelming majority of paper mills have employed what’s called the kraft process to produce paper…Wood chips are cooked in a chemical solution to separate the cellulose fibers, which are used to make paper, from the other organic material in wood. The remaining liquid, a sludge containing lignin (the structural glue that binds plant cells together), is called black liquor. Because it’s so rich in carbon, black liquor is a good fuel; the kraft process uses the black liquor to produce the heat and energy necessary to transform pulp into paper. It’s a neat, efficient process that’s cost-effective without any government subsidy.
So far so good. But here’s the harsh rub. The paper industry has figured out how to get taxpayers’ money—billions of it–by doing something wickedly creative. Oh, and they screw with the enviornment at the same time. A “twofer” disgrace.
Thanks to an obscure tax provision, the United States government stands to pay out as much as $8 billion this year to the ten largest paper companies. And get this: even though the money comes from a transportation bill whose manifest intent was to reduce dependence on fossil fuel, paper mills are adding diesel fuel to a process that requires none in order to qualify for the tax credit. In other words, we are paying the industry–handsomely–to use more fossil fuel. “Which is,” as a Goldman Sachs report archly noted, the “opposite of what lawmakers likely had in mind when the tax credit was established.”
So, adding the unnecessary diesel fuel to black liquor qualifies for a mixed-fuel tax credit, allowing them, as Hayes puts it, to turn black liquor into gold.
Many critics are saying that stimulus money will primarily go to those who need it the least. Stories like this make me sadly realize that they are probably right.
, the basis for the Best Motion Picture Nominee (Golden Globes) starring Brad Pitt.
, the novel by John Le Carre, a new motion picture starring Gary Oldman and Colin Firth.
by 
* (Included in the 
* 
.by David Fredosso who wrote 2008's 
- You'll have access to 18 million movies, TV shows, songs, magazines, and books, as well as ultra-fast Web browsing with Amazon Silk -- faster than iPad. Full e-mail and document access and a keyboard. Fire can transmit what is on your screen onto a connected TV or monitor without an accessory. It runs Flash (iPad doesn't). 
