Congress Denies $1.5 Billion With Favor to Pipelines

For more than 60 years, the Tennessee Gas Pipeline has linked natural-gas wells in Texas to customers in the north. Until last year, it paid federal corporate income taxes on its earnings, setting aside $107 million in 2011 alone.

Then in August, Houston-based Kinder Morgan Energy Partners LP bought the pipeline. Because of a little-known subsidy that annually costs taxpayers hundreds of millions of dollars, Tennessee Gas’s bill dropped to zero and stayed there.