A short window of opportunity to demand the USDA deny ArborGen permits to do a widescale planting of genetically engineered Eucalyptus in the Southern US...
Spotlight on IP – Billions of Dollars in Misguided Taxpayer Funded Subsidies…
Part 3 is a five week series exposing International Paper as the South’s largest forest destroyer…
Our previous two entries have detailed International Paper’s (IP) gigantic global impact on the world’s forests. Now would it really surprise you to find out that one of the world’s largest corporations would constantly have their hands reaching out for state and federal handouts? IP is a huge recipient of misguided taxpayer subsidies and often leads the charge for huge payouts and tax breaks, time and time again convincing the government that they and colleagues in the paper industry will fall into financial ruin without the free money.
Several months back, Dogwood Alliance and our partners exposed the Black Liquor loophole and called for its closure. Big paper companies, led by International Paper, found a loophole in the 2005 Transportation bill that they have exploited for billions of dollars in free money at the taxpayers expense. The loophole in the 2005 federal bill was intended to stimulate production of alternative fuels for vehicles. Instead, it has increased consumption of fossil fuel and threatened to strike a catastrophic blow to the recycled paper collection and manufacturing industries, while making IP and its cronies rich.
Paper companies, in a scheme devised by consultants, are now being richly rewarded for the long-standing practice of using a byproduct of the wood pulping process known as "black liquor" as a fuel to run their mills. In March of 2009, International Paper received a first payment of $71.6 MILLION for ONE MONTH of burning the fuel last year, and one report estimates they could stand to receive payment of up to $3.7 BILLION.
And this just in, though the loophole was set to expire at the end of this year, International Paper and other large paper companies just got a ruling that will allow them to collect free subsidies until 2013, meaning a total giveaway just shy of the highly publicized bailout received by the auto industry.
From a story in tax.com by Martin Sullivan:
“Well, believe it or not, the IRS has just given the industry a green light to use an even larger loophole. The source of this fantastic news for pulp producers is a just-released legal memorandum (ILM 200941011) from the IRS chief counsel dated June 3, 2009. The memo says that when the alcohol fuel mixture credit expires at the end of this year, black liquor will still be eligible for an even more generous tax credit -- the $1.01-per-gallon cellulosic biofuel producer credit. It is not scheduled to expire until the end of 2012. By our estimates, this credit will provide the paper industry with $25 billion of additional tax benefits that Congress never intended.”
That is billion with a B! Add to that the tax shelters provided to IP and other paper companies from massive land sales earlier this decade, millions of dollars in state and local funds to woo the companies to their area, and government funded cost share programs for planting trees in plantations and you have a whole lot of cash. Seems like taxpayers need a break from the pulp and paper industry!
Check back next week to learn more about how International Paper spends millions of dollars funding greenwashing.
Congrats! The IP Franklin VA mill is dead. Many renewable trees will be saved at the expense of nearly 2000 workers. I'm sure a plan is in place to replace them with "Green" jobs. Hopefully, Asia and South America will do a better job producing a sustainable forest product!
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Profit over people written by scot,
October 27, 2009
It is not the goal of Dogwood Alliance to close down paper mills and displace workers. To the contrary, it is our belief that the long-term survival of the US paper industry is closely tied to its ability to compete in a marketplace that is increasingly demanding environmental and social accountability. The IP Franklin Mill could have been a model for the 21st century but instead failed under the 20th century mentality of one of the biggest dinosaurs in the paper industry – International Paper.
We have been aware for many years now that IP, driven by short-term profits, has never taken the long-term interest of local communities, workers or the environment to heart. Instead, the use it, abuse-it mentality still prevails at the corporate headquarters of IP.
The Franklin, Albany and Pineville mills are closing even as IP receives ever-growing taxpayer handouts. Meanwhile, CEO John Faraci continues counting his ever-growing pile of money.
Pitting the environment against local communities is creating a false dichotomy. The real problem is not small, nonprofit organizations working to protect forests; it’s the profit over people business mentality of companies like IP.
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... written by Kimberly,
November 04, 2009
My husband has worked at that Mill for 30 years. While I support and understand your position on renewable forests, environmental concerns, etc. I DO NOT support your position that IP closing this mill is a good thing. The entire town of Franklin will evaporate in less than 5 years as a result of this closure, not to mention the devastating effect it is having on the economy and morale in all of the surrounding communities.
Have a heart, and think before you speak, Ben.
Respectfully,
Kimberly
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Thank You written by scot,
November 05, 2009
Thank you for your note Kim, the blog about IP People Over Profit is the Dogwood Alliance position on this. Ben is not affiliated with our organization.
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