Coal + Diesel = Alternative Fuel?

January 2, 2003 2:03 PM

Coal + Diesel = Alternative Fuel? I didn't think it was this easy, but Marriott International shows us how to make alternative fuel and a handy windfall, all at the same time:

1. Buy a ton of coal (cost: $24)
2. Spray it with diesel
3. Sell it at a loss (40 cents on the dollar)
4. Hold your hand out for $26 per ton from the government in tax credits--for making an "alternative fuel." It made Marriott an estimated $120 million last year. So there's a late Christmas message for you: nothing's more valuable than the things you make yourself. Especially a fat profit.
posted by busbyism (23 comments total)

Wow, if I only had a place to keep a few million tons of coal, I could totally do this.
posted by RylandDotNet at 2:08 PM on January 2, 2003

So what happens to the coal, er, synfuel after it's treated, I mean, created?
posted by elwoodwiles at 2:11 PM on January 2, 2003

Evidently this is an industry wide practice. Marriot is mearly following the pack in search of profits. More info here and here. To answer my own question the treated coal is sold to utilities and mills for less then the price of production. The loss that companies like Marriott report is the source of the tax credit.
posted by elwoodwiles at 2:24 PM on January 2, 2003

What I want to know is whether the treated materials are more efficient combined as they are, as neither coal nor diesel fuel would be considered "alternative" on their own.
posted by silusGROK at 2:30 PM on January 2, 2003

Crazy Mormons. What will they think of next?
posted by blue_beetle at 2:32 PM on January 2, 2003

but I wanna keep all my coal
posted by Degaz at 3:07 PM on January 2, 2003

I suspect somebody at Marriott has been watching Matthew Lesko infomercials.
posted by pitchblende at 3:33 PM on January 2, 2003

My neighbors will be Really mad when they see what's in my backyard next week. Diesel has a nice smell though, kind of perfumey even.
posted by troutfishing at 3:35 PM on January 2, 2003

I can't find a good link yet but there does seem to be an increase in effiency by using some of these methods. The idea is to coat the coal and make it burn slower (therefore longer) and decrease the amount of coal needed. I cannot, however, find a objective link so your guess is as good as mine.

On another note: coal is $24 a ton? Wow, I wonder if I could have a ton of coal delivered to the White House as a joke.
posted by elwoodwiles at 4:12 PM on January 2, 2003

A detailed history of the tax credit, and the reason that such a lame excuse for an alternative fuel qualifies, is found in a 2001 WSJ article. At worst, coal that is delivered to power plants is sprayed and used, and still qualifies for the credits. Even the coal industry is skeptical. To be sure, this is the way a tax credit of any kind is supposed to work -- offsetting tax expenses to make certain investments more economically appealing. Many businesses and much residential real estate operates at a loss, only sustainable because of tax credits. Generally there's little policing of the credits (from an economic benefit standpoint) -- nobody checks, for instance, whether there are too many apartments in a city before giving you the credit.

What's appalling here, given the high amounts of taxes being credited, is that this loophole stays in the tax code despite the objections of lawmakers, as a result of dealmaking. One of the interesting things is that it seems to have been designed to phase out as gas prices rose in an era of apparent scarcity -- but inflation was brought down, and gas prices are actually significantly lower now by dollar than they were, so the credit continues. Also, its deadlines and other restrictions have been extended or weakened.

This Paul Nyden journalist (author of the Charleston Gazette article) actually seems to be the leading expert on the tax credit -- he's written dozens of articles on it over the last several years.
posted by dhartung at 4:43 PM on January 2, 2003

$24 a ton? Wow, I wonder if I could have a ton of coal delivered to the White House

it's the delivery cost that kills ya, but i got five bucks to throw in...
posted by Big_B at 7:05 PM on January 2, 2003

Cool, something to do with my christmas presents..
posted by benh57 at 9:13 PM on January 2, 2003

It's like the wind farms that electric companies put up. Does this power really help with the power demand? Not yet. Bottom line is that the electric companies are getting tax breaks for these farms. meanwhile our bats, birds and scenery is destroyed. Cake, eat it.
posted by tomplus2 at 9:45 PM on January 2, 2003

So what happens to the coal, er, synfuel after it's treated, I mean, created?

I think I saw some in the campus restaurant last week.
posted by octobersurprise at 10:07 PM on January 2, 2003

In case anyone is under the impression that this is a good thing, let me point out that coal is typically higher sulphur than fuel oil (more acid rain) and that coal produces more carbon dioxide than oil (about 15% more). Looked at from either an air-quality or greenhouse gas emissions perspective, this is a lose-lose solution. It only makes sense because of the tax loophole.
posted by bonehead at 5:52 AM on January 3, 2003

it's the delivery cost that kills ya, but i got five bucks to throw in...

The port of Baltimore must have coal available for sale by the ton. A one ton truck can't be more than $500.00 for the half-day of use for delivery to the Whitehouse. I don't know why but I'm in for five.
posted by Dick Paris at 6:45 AM on January 3, 2003

I like the idea, but I suspect that the intentions of your rental truck would be....umm..."misconstrued" by authorities.

It might work out nicely if 50,000 people each mailed a pound or so of coal to the White House.
posted by troutfishing at 7:45 AM on January 3, 2003

This is probably one of the lesser evils of the Sudhaxo Marriot companies.

Private prisons seem to be another of their growth areas. Been watching Wackenhut profit on this one and wanted a cut probably.
posted by nofundy at 9:22 AM on January 3, 2003

Um... huh? Nofundy, I'm sure that what you just said made sense to you, but would you mind translating that last comment?
posted by silusGROK at 9:37 AM on January 3, 2003

I think troutfishing is on to something... maybe someone who's read this thread will organize a movement by Christmas 2003 to get people to fill a sock with coal and send it to the White House?

Also I found this link that (according to my approximate interpretation of graphics) says that the current price of coal per ton shipped from the US producer to a US plant is under 50$ (price includes shipping).

What I can't find out is, what is the volume per weight of coal? I assume coal is pretty heavy, and one ton wouldn't amount to much of a big pile on, say, the front lawn of the White House...
posted by titboy at 10:03 AM on January 3, 2003

Sorry vis10n, I was trying to say that Marriott observed the easy money generated by Wackenhut with private prisons and decided to get into the game themselves. Better?
posted by nofundy at 10:07 AM on January 3, 2003

titboy: Coal is anywhere from 1.3 to 1.7 times as dense as water (more valuable, more expensive). A tonne of coal is roughly 2/3 of a cubic metre.
posted by bonehead at 10:44 AM on January 3, 2003

Better, nofundy. Thanks.

: )

My view on this: The pressure on corporations to turn an ever-increasing profit is staggering, so when laws are crafted to encourage this behavior I'm not surprised it happens... frankly, I'm not sure how much my anger at Marriott for (supposedly--I'm still not sure whether this stuff is really an "alternative" fuel) abusing the law is mitigated by my anger that the law is still abuseable.

Put another way: when I drive my Lexus into a crime-ridden part of town for an evening out, only to return to see that it been stripped... I can't be surprised that it's happened. I'm angry that it happened, but I'm more angry that I let it happen to me.
posted by silusGROK at 9:16 AM on January 6, 2003