(snip)"We’ve entered another ugly battle in the ethanol wars. The EPA released an analysis last month purporting that corn-based ethanol is actually worse for the climate than gasoline on a lifecycle basis, and the California Air Resources Board (CARB) released a ruling that will effectively exclude corn-based ethanol from California’s Renewable Fuels Standard for that reason.
The ethanol industry and its supporters are livid. House Agriculture Chairman Collin Peterson (D-MN), a longtime ethanol supporter, threw a fit during a recent hearing and now is threatening to block climate legislation over the new rules. "I don't care,” he exclaimed during a hearing over EPA’s draft rule, “Even if you fix this. I don't trust anybody anymore -- I’ve had it." Ethanol opponents are cheering the agencies' decisions and urging them to look at ethanol under worst-case scenarios."(snip)
(snip)A quick primer on the latest wrinkle from the EPA and CARB: Both reached damning conclusions about the impact of ethanol based on complex economic modeling, but the basic logic behind their analysis is simple:
• Using farmland for ethanol diverts land from being used for food production, driving up price and demand
• Higher prices and demand encourage farmers in the developing world to plant more crops
• Developing world farmers clear and burn forests so they can plant more crops
• Clearing forest for cropland releases a tremendous amount of greenhouse gas
• Thus, devoting cropland to ethanol production leads to increases in greenhouse gas emissions
The ethanol industry and its supporters don’t dispute this logic, but claim two problems with the agencies’ approach: (1) The science behind this economic modeling is too new and imprecise, and (2) biofuels are being held to a much tougher standard than other climate solutions. Their opponents hold that the science is sound, and that other low-carbon technologies simply don't have these massive "indirect land-use" problems."(snip)
Of course the rich New York and California 'investors' are unhappy because their tax credits are now in jeopardy ...
(snip)"Ethanol plants are classified as “manufacturers” and, as a result, are eligible to participate in unique federal and state tax incentive programs, particularly in the first year of operation. Tax credits are more valuable than equivalent tax deductions. A tax credit reduces tax dollar-for-dollar, while a deduction is based on a percentage of tax. The following is just a sample of the myriad credits out there.
Alternative Fuels Tax Credit
Available to U.S. ethanol producers is the small producer ethanol credit. This credit will benefit small “agri-producers” by giving them a 10-cent-per-gallon tax credit for up to 15 MMgy. In addition, the limit on production capacity for small ethanol producers increased from 30 MMgy to 60 MMgy. This is effective until the end of 2010.
Cost Segregation
Every year, thousands of commercial property owners overpay because they are unaware of the tremendous federal and state tax savings hidden in their buildings. Those lost profits can quickly amount to hundreds of thousands of dollars in just a few years.
Construction-related or building acquisition costs are commonly lumped together as real property with a depreciable life of 27.5 or 39 years. This means annual depreciation deductions are spread over that time frame.
The goal of a cost segregation study is to identify all direct and indirect costs that qualify for shorter depreciable lives. Reducing tax lives to five, seven or 15 years results in an opportunity to significantly reduce a producer’s current tax liability and free up operating capital for other uses. "(snip)
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