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And the Beat Goes On: Yet More DOE Boondoggles

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Have you ever heard of Range Fuels? Well, they received, via the Department of Energy (DOE), $65 million, as well as $6.2 million from Georgia taxpayers. And guess what?! They went bankrupt.

Located in the Georgia town of Soperton, in economically depressed Treutlen County, 155 miles southeast of Atlanta, Range Fuels’ goal was to produce ethanol from rosin rich Georgia pines, of which there are 24 million acres. The ethanol would be used as an alternative fuel.

Unable to turn wood into ethanol profitably, it closed its doors a year ago, and, never came close to creating the 70 jobs once promised. Sam Shelton, director of research programs at Georgia Tech’s Strategic Energy Institute, was very skeptical of Range Fuels’ plans and technology. “It was too damn big a risk for an apparently unproven technology, and the due diligence I personally performed on Range would not entice me to invest in it,” Shelton said, adding, “Government should not be in the venture capital business selecting technologies.”

There seems to be an effort on to pin responsibility on the Bush administration, and indeed the DOE grants date back to 2007-08 and the previous administration. But the loan guarantee dates only to 2010, which will make it difficult for the Obama administration fully to escape scrutiny. There is plenty of responsibility to go around.

“I want to make it clear that I am not criticizing failure,” wrote energy writer Robert Rapier in 2010. “That is normal and expected. Failure is a part of what it takes to learn and move forward. But when you take taxpayer money to build your business, there needs to be a different level of accountability. Taxpayers will foot the bill,” Rapier predicted. “They will become cynical about biofuels as a result of the many broken promises, and ultimately funding will dry up for everyone in the sector.” Key phrase from Rapier: “Taxpayers will foot the bill.”  There is no argument from anyone (left or right) that green energy works. Making it work without taxpayer subsidies, however, is another story.

But wait, there’s more! The Range Fuels facility was sold for $5.1 million to Vinod Khosla, the same man who bankrolled and helped secure government loans for Range Fuels initially, before it went bankrupt. California entrepreneur Vinod Khosla is the main financial backer of LanzaTech, the New Zealand-based biofuel company that bought Range Fuels. Khosla, who made his billions as a co-founder of Sun Microsystems, has invested heavily in alternative energies. LanzaTech hasn’t received the same type of federal and state loans as Range Fuels, but the company has received “only” $7 million from DOE and Department of Transportation (DOT) to assist in the development of alternative fuels. LanzaTech, according to a spokesman, will use the Soperton site to turn wood residue into fuels and chemicals. Does LanzaTech figure it can succeed where Range Fuels failed and make a questionable process into a profitable one? Or will LanzaTech end up like Range Fuels in a few more years and start looking for taxpayer money to bail them out? Another question: Why did a New Zealand based company receive any US taxpayer money?

Have you ever heard of the National Renewable Energy Lab (NREL)? Located in Golden, Colorado, NREL’s commercial business purpose is to work on various research and development programs for DOE. NREL received $328 million in government grants in 2008, a $200 million stimulus grant in 2009 in addition to its regular government funding, and $536.5 million in 2010. As of October, 2011, NREL spokesman Bob Noun blames Congress for the organization’s failures. Noun says he believes the gridlocked U.S. Congress forced the NREL to find $8 million in new budgetary savings. NREL plans to eliminate between 100 and 150 of its 1,350 jobs, about 10 percent, through a voluntary buyout plan.

So while the Solyndra bankruptcy grabbed most of the headlines and caused major embarrassment for Barack Hussein Obama, there are many other green energy companies waiting to be discovered.

But that’s just my opinion.

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  • Glenn Contrarian

    (yawn)

  • Clavos

    Naturally Glenn is bored by accounts of the money boondoggles perpetrated by his Messiah…

  • Zingzing

    oil companies receive at least $4b/year in subsidies/tax breaks/whatever. that number could be much lower than the reality. where’s the outrage?