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Energy taxes/ taxes on energy The once-stable price relationships among energy sources have changed markedly over the past 10 years as supplies, technology and energy use have undergone major changes. Governments at every level are now hard-pressed to formulate energy tax structures which will please consumers, developers and conservationists and yet produce necessary revenue. Illinois' problems, like those of many other states, boil down to one irreducible dilemma: What is good for the state of Illinois may be bad for the State of Illinois JOHN MARSHALL once observed that the power to tax involves the power to destroy. It also involves the power to conserve, to modify, to punish and to persuade. It has been a long time since either the states or the federal government used taxes merely to raise money. They use them to sustain ailing industries, to redistribute income among citizens and to subsidize socially approved enterprises (either through tax exemptions or outright grants) ranging from churches to colleges or convention centers. The usefulness of taxes for these various jobs swings on a simple point: Tax something and one adds to its price, making it more expensive and thus less attractive to buy; don't tax it and one makes it cheaper, and thus more attractive to buy. Taxes may be carrot or stick, sometimes even both. The taxes levied or not levied on energy, by whom and to what extent, affect what kind of energy people use, how much of it they use, when they use it and for which purposes. Taxes are screws governments may use to fine-tune the marketplace's price mechanism. The only forms of energy left un-taxed in the U.S. are those which are too new or too small to have made it worthwhile. A short list of federal energy taxes includes excise taxes on gasoline and severance taxes on coal, credits on individual income taxes for home insulation and accelerated depreciation for coal boilers. At the state and local level, energy generates not just heat and light and motion but money, in the form of motor fuel taxes, public utility taxes, sales taxes on water heaters and property taxes collected on coal still buried in the ground. Taxes on energy tend to be rewarding rather than punitive. They also tend to vary in their aims according to who is doing the taxing. Congress has been joined by a succession of presidents in using the tax code to encourage energy production rather than to reduce consumption. The prices of domestic oil were decontrolled in 1980 in order to stimulate further production. The windfall profits tax on oil companies was levied as a condition of decontrol mainly to make decontrol politically palatable; it was significant that much of the projected proceeds from the tax were set aside to finance synthetic fuels programs — whose aim, likewise, was to increase energy supplies. State governments, including Illinois', tend toward different uses of the taxing power. States have little leverage over supplies, especially states which import most of their energy from outside their borders, as Illinois does. Also, energy production is an expensive business, and the revenue resources of a state are seldom a significant factor: Illinois' entire authorization under the 1974 Coal Development Bond Program of $65 million would barely pay the interest on a single coal synfuels plant for six months. However, states do have the power to affect energy consumption through sales and utility taxes and through their regulatory authority over utilities. A few, such as California, have found it cheaper to
While there are many taxes on energy, there are relatively few true "energy taxes." Taxes on energy are revenue tools rather than policy tools; their effects on energy production and use, while often considerable, are often unintended, and are incidental to these larger aims. True energy taxes, on the other hand, are enacted with specific ends in mind — to alter people's energy behavior, perhaps, or to amend the rules of the marketplace to stimulate production or conservation, or possibly to spread the economic effects of energy costs more equitably. Theoretically, energy taxes are simple tools designed on a simple premise: People react to price in their choices about energy. Take gasoline. Many consumers have reacted to higher gasoline prices since 1979 by exercising one or more of several options open to them, such as driving less or buying a more fuel-efficient cars. Many other consumers have not, however. If one taxes energy in order to push its price even higher, one can (as energy economists sometimes phrase it) "speed the option curve" of those consumers. A fuel-efficient new car which can't pay for itself when gasoline sells for 75 cents a gallon becomes affordable when gas hits $1; riding a bus may not be worth the trouble when gas is $1 but becomes worth the trouble if gas were to hit $2 a gallon. Do the opposite — by forgiving certain energy forms the taxes which otherwise would be levied on them, for example — and the option curve accelerates even more. Had Justice Marshall lived into the 1980s, he would have understood that when it comes to energy the power to tax also involves the power to confuse. The increase in oil prices during the Partial support for the energy series has been provided through a grant from the Office of Consumer Affairs of the U.S. Department of Energy. Opinions and conclusions expressed in the article are solely the responsibility of the author. August 1982 | Illinois Issues | 9 '70s, expecially the one which followed the revolution in Iran in 1979, is a case in point. Illinoisans reduced their consumption of gasoline (chiefly through a switch to more efficient vehicles) with the result that road funds supplied by the motor fuel tax have been left perilously low. At the same time, in spite of declines in consumption, the drain on gasoline purchases on the state ecnonomy has increased. Illinois imported virtually all the 4.8 billion gallons of gasoline it consumed in 1980 and thus exported most of the $6.2 billion it spent on gasoline that year. European nations have long been faced with the unhappy fact that much of their exports to the Middle East have been in the form of the marks, francs and guilders which paid for imported oil. Thus European parliaments have levied stiff "conservation taxes" on gasoline in a deliberate policy of discouraging consumption. In the winter of 1979-80, when gasoline prices in the U.S. were about $1.20 a gallon, prices in Europe ranged from $2.34 (in the United Kingdom) to $3.11 (in Belgium). Some of the price differences resulted from the fact that most of Europe's gasoline, unlike that in the U.S., is refined from expensive OPEC crude. But most of the differences were in the taxes levied on that price. Taxes accounted for 52 percent of the selling price in Belgium, 64 percent in Italy, 73 percent in Portugal. In the U.S. at that time, the average figure was 12 percent. In Illinois it was closer to 8 percent. The European taxes seem punitive by U.S. standards. But by making gasoline so expensive, those taxes stimulated the market for fuel-efficient automobiles years before such a market existed in the U.S. The taxes also helped sustain demand for energy-efficient mass transit systems, reduced oil imports and protected trade balances. Higher gasoline prices since 1979 have had many of the same effects in the U.S., at least as far as consumers' choices about new cars is concerned. However, declines in gasoline prices late in 1981 caused an upswing in sales of gas-guzzling cars. The same thing happened in the mid-1970s when, after the initial shock of OPEC's first round of price increases wore off, U.S. consumers went back to big cars, and oil imports actually rose. That left the
It may be argued that it is in the national interest to keep consumption down even in a period of ample supply, so long as the country relies on imports for a significant part of its oil. Congress has made very modest attempts to tax away the appeal of gas-guzzlers by imposing a tax on models which fail to meet its mandatory fuel efficiency standards. But that tax falls on the automaker, not the auto buyer, and it is probably too little to deter the more affluent customer with whom bigger cars are most popular. Economies' scientific inexactitude is seldom more apparent than here. No one knows for certain how big a tax must be to deter consumers from a given purchase. What little evidence there is suggests that such taxes need to be sizable; the current formula measuring the so-called "elasticity" of demand for gasoline, for instance, holds that demand will drop by only 20-25 percent for every doubling of price. A conservation tax on gasoline might prove more persuasive. Such a tax might have the same effect in pushing consumers toward gas-efficient cars as higher OPEC prices did. It would have the added virture of keeping the resulting revenues in the U.S. instead of exporting them to Riyadh or Caracas. But the idea has been more widely admired than imitated in the U.S. The Carter administration briefly considered raising the federal excise tax on gasoline from its present 4 cents per gallon to 50 cents, which would have slashed imports and raised enough new money each year ($55 billion) to cut taxes and balance the federal budget. Illinois Republican Congressman John B. Anderson advanced a similar notion in his "50-50" plan by which the gasoline tax would go up to 50 cents with the revenue used to cut Social Security taxes in half. Ideally, the proceeds of a conservation tax would be used to offset the inflationary effects of the price rise, (through rebates or reductions in other taxes. Thus the net after-tax income would remain the same — with adjustments, perhaps through the income tax tables, to cushion the poor against the disproportionate impact of higher gasoline prices, since the poor tend to drive older, less efficient cars. But fears about the political impact of such a tax won it few votes from a nervous Congress. Motor fuels In many ways the position of Illinois and Europe regarding oil imports is analogous, but their position on taxes is quite different. The Illinois motor fuel tax was first levied in 1929 to pay for highways. The tax consists of a flat levy per gallon, which now stands at 71/2 cents, and was intended to have no impact on gasoline consumption other than to make it as convenient as possible. A state conservation tax on gasoline has not even been proposed, much less considered. Speaking to an energy conference in Chicago in 1979, Anthony Liberatore, then assistant director of the Illinois Institute of Natural Resources (now the Department of Energy and Natural Resources), said of such a tax: "For purposes of discussing state taxing options, one should remain within the realm of reason." There are economic as well as obvious political arguments against a conservation tax. Illinois would lose gasoline sales to nearby states, for one thing, and risk drying up the oil refineries which constitute one of the state's major industries. It is also a fact that the state still relies on a tax structure designed for high energy consumption rather than low; indeed, as the drop in motor fuel tax revenues shows, the state has a vested interest in sustaining gasoline consumption. One can seek to reduce petroleum use by making it more expensive through a conservation tax. But one can also accomplish similar ends by making the alternatives to petroleum cheaper. A provision of the 1978 Energy Tax Act (sponsored by Illinoisans 10 | August 1982 | Illinois Issues Sen. Charles Percy and Congressman Paul Findley) temporarily exempted gasohol from the 4 cents per gallon federal excise tax on gasoline.
Other corn states such as Iowa added exemptions from their own sales and/or motor fuel taxes. Several similar measures have been proposed in the Illinois General Assembly, but with much more modest results. The General Assembly has managed only to override in 1980 Gov. James R. Thompson's veto of a bill temporarily exempting gasohol from the state's 4 cents per gallon sales tax on gasoline. The tax will be phased back at the rate of a penny a year until 1985. But are such tax incentives genuine energy taxes? In the case of gasohol, the aim was less energy conservation than economic development. Whatever their purposes, sales tax exemptions were projected to reduce the price of gasohol in late 1981 by only a few percentage points. Such exemptions are usually more effective at boosting the standing of legislative sponsors among their beneficiaries than they are in boosting energy. State officials suggest that the peak gasohol consumption in Illinois (reached in the spring of 1981, when gasohol accounted for 2.2 percent of all gasoline sales in the state) was attributable more to intensive TV advertising by major retailers than it was to price incentives resulting from the state sales tax exemption. Tax exemptions may not have boosted sales much, but they have more decisive effects on the state's budget. Gov. Thompson has repeatedly vetoed bills exempting gasohol from the state's motor fuel tax because of the harm such an exemption would do to the state's road fund. Even the temporary sales tax exemption was estimated to cost the state $4.5 million in fiscal year 1981. The argument over the use of tax incentives to encourage the use of this particular petroleum alternative illustrates a dilemma of tax policymaking which recurs again and again: What is good for the state of Illinois often is bad for the State of Illinois, and vice versa. Utilities Natural gas and electricity are energy commodities as vital to Illinois as gasoline. Like gasoline, the prices for both have risen dramatically in recent years, in some cases as much as twice the rate of inflation. While the state's utility rates are subject to complex factors, which include everything from bad planning to what some consumers groups describe as lax regulation by the Illinois Commerce Commission, Illinois is also at the mercy of market and regulatory decisions made outside its borders. This is especially true in the case of natural gas. More than half the energy used to run Illinois homes is gas, in part because plentiful supplies in the past combined with government price control made gas a bargain fuel. But those cheap supplies of gas are being exhausted, and it was to stimulate the search for new ones that Congress in 1978 passed the Natural Gas Policy Act which authorized the gradual elimination of price controls on gas. The precise impact on prices is hard to predict, but decontrol may boost gas prices in Illinois by 1985 anywhere from 100 percent to 300 percent. How can Illinois defend itself against such increases in the cost of a fuel on which it has grown so dependent? Its "option curve" in this case bends toward conservation through increased efficiency. As was reported in these pages (see "Natural gas: What's in the pipeline for Illinois?" by George Provenzano, February 1982), gas use per customer in Illinois has already declined nearly 25 percent since its historic peak in 1972 because of low-cost conservation methods such as caulking and thermostat adjustments. However, additional efficiencies will require more expensive improvements such as new furnaces and better insulation. 
In the recent past, Washington supplied such efficiency capital through a variety of loan and grant programs administered by state and local social service agencies. Since 1977, roughly $12 million has been spent in the state on weatherization materials for 16,000 homes, and another $12 million has been spent through the Institutional Buildings Grants Program for efficiency improvements in schools, hospitals and government buildings. But most such programs were early targets of the Reagan budget cutters. Secy. of Energy James Edwards, for example, has testified that conservation grants are no longer necessary, since rising energy prices resulting from decontrol are providing incentives to conserve. The economic weight of higher energy prices falls unevenly on different classes. Poor people, for example, while using roughly the same amount of energy as their middle-class neighbors, must pay proportionately higher portions of their income for it. High interest rates have deprived efficiency improvements of much of their economic advantage. Small businesses and the poor generally lack access to affordable private capital in any event, and may have to accommodate to higher prices not through efficiency but through sacrifice. There is another source of efficiency capital, however, in the form of the money flowing out of Illinois to gas producers. A tax applied to natural gas August 1982 | Illinois Issues | 11 purchases would have the effect of pushing up gas prices even more quickly than the present decontrol schedule, and thus provide a painful incentive to conserve. If the proceeds from such a tax were made available to property owners as a source of low-cost improvement capital, the tax would: 1) capture some of the revenue resulting from higher energy prices; 2) help spread the conversion of the state's building stock into more efficient units, thus insulating property owners against future energy price increases; 3) help cushion consumer groups (chiefly the poor) against the financial dislocations caused by the transition from a cheap to an expensive energy economy; and 4) stimulate a considerable trade in home improvement products and installation. However much economic sense such a tax makes on paper, it does not yet add up politically. Sensing the public mood, candidates in the 1982 primaries focused the debate on utility pricing or how to keep rates as low as possible, not on how to turn higher rates to the state's advantage. People tend to form their political opinions much as they do their household budgets, and prefer short-term advantage at the expense of their longer term interest. Conservation Policymakers at both state and federal levels have tended to let energy prices rise in accordance with market forces, in part because it makes it possible to blame the results on the energy companies and OPEC, in part because the market is generally recognized to be a more efficient price mechanism than government regulation. But the market tends to undervalue both conservation and alternative technologies, since the price of the former reflects energy costs today (and in some cases yesterday), while that of the latter reflects those of tomorrow. Residential solar energy, for instance, must compete with energy supplied by regulated utilities whose prices reflect their average, rather than marginal costs of production. Solar economists argue that since solar energy reduces the need for these marginal supplies, the cost of installing solar should be compared to those higher marginal costs rather than to average costs. At current market prices, for instance, a solar collector may require 10 years to earn back its costs in energy savings; computed against marginal costs, the payback period for the same unit might be as few as two or three years. One popular remedy for such imbalances is to provide subsidies through tax incentives. Congress in 1980 financed several such incentives out of the proceeds of the windfall profits tax on oil. For example, owners of pre-1977 homes are entitled to a credit on their income taxes worth 15 percent of the first $2,000 of the cost of efficiency improvements such as storm windows and insulation, and builders of new homes can claim a credit of 40 percent of the cost (up to a maximum credit of $4,000) for the cost of renewable energy equipment such as solar, wind or geothermal
Such tax incentives diminish government treasuries, but can earn back their cost. A 1981 study, "Residential and Industrial Energy Conservation Potential in Illinois, 1980-2000," prepared for the Department of Natural Resources (DENR) by the Energy Research Group at the University of Illinois at Urbana, estimated that Illinois industry could reduce its energy use by 13 percent by the year 2000 through efficiency investments. Such savings are vital, according to the study, to "help Illinois industries retain their competitiveness over those in other states and [to] reduce Illinois' reliance on imported fuels." To do this, the study group calculated that subsidies amounting to 20 percent of the capital costs of efficiency improvements, or roughly $90 million a year, would be required. Illinois taxpayers would in effect be "buying" energy at a cost of 61 cents per million British thermal units (MBtu) by underwriting efficiency, compared to energy costs which in 1980 ranged from $2.70/MBtu (for natural gas) to $18.52 (for electricity). Concluded the Energy Research Group (ERG): "The long-run benefits to Illinois in terms of employment, productivity and reduced dependence on imported energy would probably exceed the cost of the incentives." Tax incentives thus would seem to be a bargain means of promoting what the ERG calls "cost-effective behavior." But as Gary Adkins reported in this magazine in April 1981, Illinois is not among either the 27 states which offer some kind of state income tax reduction or the 13 which offer sales tax incentives for residential solar instalations. Proposals in the General Assembly to offer such incentives have gone "nowhere," according to their sponsors, again because fears such incentives might have on the budget. The attitude of the legislature was summarized in a speech by Sen. Kenneth Buzbee (D., Carbondale), who acknowledged at a 1980 seminar that tax credits and exemptions "can stimulate changes in traditional behavior," then suggested that Illinois spur conservation by "encouraging federal incentives for energy users to cut back" (emphasis added). (Ironically, federal tax deductions for conservation and alternative energies, because they reduce federal taxable income upon which the Illinois income tax is computed, confer an indirect and unwilled state subsidy as well.) The only state tax subsidy to the new residential energy technologies came in the form of Public Act 79-943. Energy improvements add to the value of a house, and by doing so eventually boost the owner's local real estate taxes. This has the effect of lengthening the period required to recoup the investment, and amounts to an economic disincentive. To remedy this, the General Assembly allowed solar equipment to be assessed at a value no higher than the value of a conventional system of equivalent capacity. Thus Illinois state government has agreed to tax breaks for new technologies, but only when it involves someone else's taxes. And what about local taxes? Heretofore, locally generated funds have played a small part in energy programming, largely because the steady flow of state and federal grants made them 12 | August 1982 | Illinois Issues unnecessary. But local governments have several tax levers of their own which they can use to shift energy use. These range from granting property tax exemptions for energy-efficient buildings to the issuance of tax-exempt municipal bonds to finance energy improvement revolving loan funds. Using local taxes for such projects has provided local control, but as is the case with state tax incentives, it has the drawback of costing money which cities would like to spend somewhere else. As a result, local tax levers generally lay dusty and unused in Illinois. Another, more innovative possibility is suggested in a model for a unique municipal solar utility devised for the city of Carbondale in 1981 by the staff of the Shawnee Solar Project. Key to the project would be a Community Energy Development Fund, which in turn would be supplied by a new temporary Energy Consumption Tax levied by the city on each unit of energy consumed in each building. The tax would be computed and collected by the utilities serving the city. It would have the effect of raising utility rates by 3 percent, enough to both stimulate efficiency improvements and simultaleously provide a pool of low-cost capital with which to make them. Carbondale city officials, by the way, liked the idea of a municipal solar utility but didn't like the tax proposed to support it. Instead they funded the project using federal community development money, even though that made many potential projects ineligible for federal income tax credits, since otherwise their owners would be receiving a double subsidy from the federal treasury. The state is not the only entity which prefers to travel into the brave new world of energy on tickets paid for by someone else. Coal Since 1973, coal has been touted as a "bridge" fuel to a solar- or nuclear-powered future. The problem is that few people want to use it. Because certain coal, especially Illinois' coal, is unburnable under existing clean air regulations without expensive sulfur dioxide scrubbers and because coal in many markets is more expensive than natural gas, the switch to coal from oil or gas by electric utilities and industry has been something less than a stampede. For what are essentially national security reasons, Congress in recent years has sought to use the tax code to redress energy economics in favor of coal. For example, in 1978, Congress passed the Powerplant and Industrial Fuel Use Act which forbade construction of large new boilers Such incentives, however, failed to convert many boilers that weren't going to be converted anyway for other reasons. In 1980, Congress authorized $3.6 billion in outright grants (money to be taken from the new windfall profits tax on oil) to pay electric utilities to convert 70 boilers in the eastern U.S. from oil to coal. This scheme had the virtue, uncommon in federal energy tax law, of using money earned from taxing a scarce energy source to encourage the use of another, more plentiful energy source. However, the coal conversion program was scrapped by the Reagan administration. By the spring of 1981, the U.S. coal industry was back in Washington lobbying for new tax breaks, including tax-exempt status for bonds sold to finance conversion and a provision allowing new coal boilers to qualify for the same tax credit now allowed on pollution control equipment. The consensus seems to be that the failure of these various federal incentives to convert U.S. boilers to coal is largely one of degree: Either the feds just weren't generous enough or tax credits are scant incentive to companies which have few profits to tax. These hard rules apply in Illinois as well. But coal taxation in Illinois is complicated by circumstances unique to the state. Coal is a major energy source in Illinois, obviously. It is also a major industry. What one considers an appropriate state tax policy regarding coal, therefore, depends on whether one sees coal as an energy issue or an economic development issue. Consider the example of severance taxes. Severance taxes are levied on fossil fuels of all types to compensate states and/or localities for the loss of an irreplaceable resource and are computed as a percentage of the selling price of coal, oil or natural gas. In principle, if not always in practice, the resulting revenue is used both to offset the social costs of energy development (the so-called "boomtown effects") and to rebuild a depleted economic base. Because severance taxes are price-linked, the revenues thus earned by energy states have boomed since 1973. A 1981 study done for the Midwest Governors' Conference by DENR calculated that in 1981 the 13 mid-western states will have paid out a net total of $1.2 billion just in severance taxes to states outside the region, a sum which is estimated to add roughly 3 percent to midwestern energy costs. Most of this booty goes to oil- and gas-producing states such as Texas and Oklahoma, with the result that decontrol of gas prices will help boost the annual outflow from the Midwest to $2.6 billion by 1985. What is true of the Midwest is true of Illinois. But there is irony as well as pain in Illinois' plight. Roughly $25 million a year of Illinois' total tax tab to other states goes to western states which, like Illinois, produce coal — to Montana, for instance, which levies a 40 percent tax on its coal, and Wyoming, whose tax amounts to 17 percent. Like these states, Illinois exports much of its coal. Unlike these states, Illinois does not collect a severance tax on it. Illinois consumers, in effect, are paying for new schools and roads in Montana while needed schools and roads in southern Illinois are left unbuilt. Politically, a severance tax on Illinois coal has obvious appeal, since the cost of the tax would be exported to consumers in other states along with August 1982 | Illinois Issues | 13 the coal. Economically, such a tax would pose risks. Western coal is not only cleaner to burn than Illinois coal, it is cheaper — even after the addition of severance taxes and transportation costs. Adding a severance tax would add to this price spread and risk further erosion in Illinois coal's competitive position — a point made repeatedly by the Illinois coal industry in lobbying against the tax. Understandably, coal-importing
Illinois' position on western coal taxes is even more awkward. DENR director Michael Witte, for example, argues that a federal ceiling would push down western coal prices. That would make Illinois coal more expensive compared to its western competitor, and so lose an estimated 4.2 million tons in orders over the next four years. As an energy consumer which desires, in Witte's words, that "consumers not pay more than they have to for energy," Illinois regards western coal severances taxes as too high. As an energy producer anxious that higher prices not shrink its out-of-state markets, Illinois also regards them as too low. The case is further complicated by the fact that market conditions change. Witte also worries that a ceiling would infringe Illinois' powers to tax its own energy resources in the future. Through the 1980s and into the 1990s, as new, scrubber-equipped plants come on line and as accessible western reserves are depleted, demand for Illinois coal is expected to surge — at which point, an Illinois severance tax is not expected to significantly deter customers. Whether to apply a severance tax to Illinois coal, and how much of one, and how to divide the take are questions that have been before the General Assembly repeatedly in recent years, usually under the sponsorship of Marion Democrat Sen. Gene Johns. Only one severance tax bill escaped both houses, and it was vetoed by Gov. Thompson. It called for a tax of 5 percent of the gross value of the coal or 30 cents per ton, whichever was greater; half the resulting revenue would revert to the counties from which the coal was taken, with the rest going into the state's general fund and paying for land reclamation and miners' benefits. Whatever the fiscal case for or against a severance tax, the social case seems compelling. Carbondale's Southern Illinoisan, made this case for the tax in 1980:
Choices and questions Taxes are merely means to ends. If Illinois' energy tax policies are muddled, it is because the people making them have not yet sorted out which ends they want the taxes to serve. Only one thing seems certain: The choice is not whether Illinoisans will pay more for energy between now and the new century but whom they will pay it to. Beyond that, the questions are formidable. Should Illinois regard itself as an energy importer or an energy exporter? Are taxes merely revenue earners or should they be used more as instruments of social policy? Is energy taxation the proper province of Washington or the states? If the marketplace does not provide sufficient incentives to conserve, how can it be modified to do so fairly? Is it in the long-term interests of the state that Illinois consumers (as DENR's Witte avers) pay as little as possible for energy? Or is it true, as the national experience with gasoline would seem to suggest, that sometimes the best way to bring down energy costs in the long run is to make energy more expensive in the short run? Finally, and perhaps most crucial of all: Is it possible for popularly elected leaders to make unpopular decisions about energy and taxes in the face of resistance by voters who have yet to learn that cheap energy does not necessarily mean affordable energy? James Krohe Jr. is a contributing editor to Illinois Issues and associate editor of the Illinois Times in Springfield; he specializes in planning, land use and energy issues. 14 | August 1982 | Illinois Issues |
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country vulnerable to the 1979 supply interruptions and price increases.
designed to use oil or natural gas. To enable companies to comply, provisions of companion legislation, the Energy Tax Act of 1978, ruled out investment tax credits in the construction of such boilers. (Changes in depreciation schedules for such equipment also were enacted as part of this law.) A study done at the time by Southern Illinois University's Coal Extraction and Utilization Research Center at Carbondale predicted that because of these liberalized provisions, demand for Illinois coal might rise an extra two million tons a year by 1985.