The Green Economy

For those of you who believe in a green economy (why are you here?) I have some very political news. It's the money, stupid.

WASHINGTON, D.C. — Paper companies in Minnesota and across the nation have figured out how to make billions off of an alternative energy tax credit that Congress devised two years ago. Their answer: burn diesel.

This rather paradoxical twist has already ignited a debate between the paper industry and environmental groups and lawmakers on both sides of the argument in what some industry watchers and analysts are claiming is a presage of fights to come as Congress tries to detail new climate and energy legislation this session.

Well they never used to burn diesel. It wasn't economical when they could burn the waste from the paper making process. But our government (in its infinite wisdom) has made burning diesel by the paper makers profitable. So profitable that they may make more from burning the diesel than from making paper.

The tax credit in question originated from a 2005 highway law and was intended as an incentive to mix alternative energy sources, such as ethanol, with fossil fuels. In 2007, the credit was expanded to include non-transportation fuels.

Some papermakers who generate electricity by burning a wood byproduct called "black liquor" saw an opportunity to capitalize. But to qualify for the credit, which only applies to mixed fuels, paper companies have had to start adding in small amounts of diesel, Mason said.

By doing this, Mason estimates that the windfall for 30 paper-producing companies in the United States may reach about $6.6 billion and could rise as high was $10 billion.

About 100 U.S. mills are eligible to take advantage of the tax credit. Some paper companies could even raise more money this year through the tax credit than they do in revenue, according to Mason.

"This is a government program that has run amok," said Verle Sutton, who operates the Reel Time Report, owned by California-based Forestweb Inc., and has analyzed data for the paper industry for the past 10 years.

But those in the industry, which has plummeted recently amid a bad economy and a decreased demand for paper products as readers and advertisers increasingly turn online, defend the tax credit as a much-needed and appropriate recognition of their renewable energy process.

Is any one getting the idea that subsidizing alternative energy so we can pay higher prices for energy or keep alive dying industries is a scam? This scheme can only lead to excess paper production in a down economy and thus a decline in the price of the end product. You can see it coming. Next Congress in an effort to "fix" the problem it created will put quotas on paper producers. To save the trees. Thus Congress will decide how much paper the US economy actually needs. Which will lead to underproduction in times of high demand and overproduction in times of low demand. Your government at "work".

The only Green thing about this whole scam is the money. Which evidently now grows on trees. If the trees are fed into a paper mill with a little diesel. One good thing I can see coming from this is that it may lower the price of tea bags. Which are partially made of paper. You might want to send a used tea bag or two to:

The White House
1600 Pennsylvania Ave. NW
Washington, D.C. 20500

let them know what you think of this scheme. And don't forget to remind them to compost the tea bags. After removing the staples. It is the Green thing to do. Besides I think eau de Compost is an appropriate smell for the White Hose these days.

If you just want to e-mail the President (send electrons, save the trees) or his confederates in Congress here are a few hints:

House of Representatives
The Senate
The President

Stop the madness. Save a tree.