Re: Re "terminology"

["Tom Miles" <tmiles@trmiles.com>]

Alternative Fuel Production Credit (Section 29 of the Internal Revenue Code), or
"gasification tax credit"

The credit started in 1980. It is due to end December 31, 2002 although credits on
some facilities will be received until 2008. I believe the period for qualification
for the tax credit expired in June 1998 in it's last extension. By that time
enterprising tax attorneys had broadened the definition of a gasifier to include
boilers operating in a staged combustion mode with the air required for "gasifying"
coming up through the grate. It has also been used extensively for methane from
landfills. Other extensions have been proposed but none have been approved as far as
I know.

One positive effect of the credit was to force many small boiler makers who wanted to
take advantage of the credit to make their systems more efficient. There were never
more than half a dozen large industrial scale or independent power systems built
under the credit. Most of these were in the period 1984-1990.  To my knowledge only
one is still operating. For some installations it provided substantial income. See
http://www.drykiln2000.com/capstone_turbine/section29.htm

Following is an excerpt from a March 1998 BERA description of tax credits found at
http://www.bera1.org/3-26-98.html
"a tax credit is exactly that, a direct reduction in the tax that is due on taxable
income. An example is the biomass gasification tax credit under IRC Section 29. The
fuel gases from landfill gas recovery systems and biomass gasifiers qualify for the
credit as long as certain conditions are satisfied. The amount of the credit is
inversely related to the price of oil; when the price of oil increases, the credit is
reduced. For 1997, it was $1.05/MMBtu of fuel gas produced and sold to an independent
third party, so the credit can be substantial." See also
http://www.eia.doe.gov/oiaf/servicerpt/subsidy/box_txt.html and
http://spee.org/pdfs/taxs29.pdf http://www.lfgtech.com/tax_credits.htm etc.

Tom Miles


----- Original Message -----
From: "Ron Larson" <ronallarson@qwest.net>
To: <andrew.heggie@dtn.ntl.com>; "Stoves" <stoves@crest.org>; "Paul S. Anderson"
<psanders@ilstu.edu>; "Crispin" <crispin@newdawn.sz>; "Mike Antal"
<mantal@hawaii.edu>; "Tom Reed" <tombreed@attbi.com>; "Dean Still" <dstill@epud.net>
Sent: Saturday, October 19, 2002 9:38 PM
Subject: Re "terminology"


> Hi all:
>
> This is intended to agree with most everything I hear from Andrew and
> mostly from Tom - as a part of the terminology thread started by Paul (and I
> have changed the subject heading back to
> "terminology".  I am not happy with Paul's use of the word "gasifier".
>
> 1.  Tom Reed said today re terminology:  " The distinction is not trivial
> since there are often tax credits for
> gasification and not for combustion of biomass.  Testifying in court, I
> would say that if in principal you can put a septum between the gasification
> section and the combustion section and remove samples of combustible gas
> requiring more air, it is a gasifier.  If sufficient air is supplied in one
> step for "substantially" complete combustion (like the pellet stoves), it is
> a combustor.
>
> (RWL1):  I wish that we had this tax credit problem to contend with.  If we
> did, I might change some of the following.  I would say that Tom's remark is
> true on the gasification list - where I think they almost never use the term
> "pyrolysis".  Gasifying people, as Andrew has emphasized, try for a minimum
> amount of charcoal, for continuous operation, - and often are adding steam.
> You (Paul) and I (and Andrew a lot) are not doing any of these.  So
> everything Tom says about the septum is true - but the septum criterion also
> applies to pyrolysis units - which I claim are a different animal from
> gasifiers.




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