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“Clean coal” subsidies have let Wall Street and the energy industry make a lot of money at taxpayer expense, as several new reports suggest.
The term “clean coal” refers to two entirely separate technologies. One is the chemical treatment of coal to make it more environmentally friendly. The other uses sequestration techniques to capture carbon dioxide before it escapes through coal power plant smoke stacks. But both are financial engineering profit engines.
Under the George W. Bush administration, the American Jobs Creation Act of 2004, a bill passed with bipartisan support, created subsidies for the first type of clean coal. A new Reuters investigative report has found that those payments currently cost taxpayers $1 billion a year in tax credits largely snatched up by investors, including Wall Street banks, insurers, meat packers, and drug companies.
On top of the money transfer, it turns out that coal treatment often fails to reduce the nitrogen oxide emissions that contribute to smog and acid raid.
The second type of clean coal, with subsidies extended and expanded through the federal budget under the Trump administration, could “radically change the economics of some power plants,” a researcher at the University of Texas at Austin Energy Institute wrote at Forbes. Some plants that were running in the red could suddenly become profitable.
But there’s a checkered history in the technologies. Out of $450 million in Obama era Energy Department stimulus grants for one sequestration project, millions were spent on “liquor, lobbying, and spas,” according to Bloomberg. And multiple clean coal plants have gone off the rails after significant federal investment.