Monday, August 19, 2013

Billions of Obama biofuel bucks funded "not so shovel-ready" risky projects, fueled by more green corruption


The Dirty Politics of Clean Energy 

Last month we focused on the “Green Slime Fuel Dream: Scent of a Scam,” of which I chronicled the trio of President Obama’s “algae allies” –– those with political access and influence –– and how they scored over $100 million in clean-energy funds.

Marita Noon, energy expert and columnist at Townhall.com, followed my post with the following piece: The Dirty Politics of "Clean" Energy, whereas she noted the latest battle over the renewable fuel standard (RFS) as well as how biofuel mandates cost the American taxpayer at the pump and much more.

Despite the fact that some will argue that ethanol "can ruin car engines, it’s bad for the environment, and it raises taxes, gas and food prices," the Obama administration continues to dump millions of tax dollars into this fuel source. Inside Noon's column is just a hint into the number of ethanol companies that have gone bankrupt, with some problematic, while receiving taxpayer subsidies, grants and loans –– all with the potential for cronyism, of which she summarized a portion of my latest research.

Algenol Biofuels: $25 million DOE stimulus grant
During an energy speech in Florida, President Obama stated, “We’re making new investments in the development of gasoline and diesel and jet fuel that’s actually made from a plant-like substance — algae.” Right there in Florida is Algenol Biofuels — which Forbes calls “Obama’s favorite algae company.” In December 2009, Algenol Biofuels received $25 million in federal stimulus grants from the Obama administration and a $10 million grant in 2010 from Lee County’s Economic Development Committee.
Sapphire Energy: $54.5 million USDA loan; $50 million DOE stimulus grant 
Then there’s Sapphire Energy, which received a $50 million grant from the DOE and a loan guarantee for up to $54.5 million through the Biorefinery Assistance Program for their “Green Crude Farm” in Southern New Mexico. Surprise! Executives, board members and employees at Sapphire contributed almost exclusively to Democratic campaigns. Michelle Malkin reports: Sapphire's “website reads like a satellite White House communications office.” Even the Private funds raised for Sapphire have Obama connections: Bob Nelsen, a founding partner of ARCH Ventures—a Sapphire investor, served on Obama’s National Finance Committee during the 2008 campaign, and Microsoft’s Bill Gates is also a Sapphire investor. In 2008, Microsoft donated $852,164 and $814,645 in 2012—making them number four and number two, respectively, on the top Obama donor lists. In 2012, Bill and Melinda Gates personally contributed $71,800 to Democrats.
Sapphire Update: On July 30, 2013, it was announced that Sapphire Energy, Inc. had "paid off the entire $54.5 million loan guarantee awarded to the company by the U.S. Department of Agriculture." Then on August 1, 2013, Sapphire Energy snagged another $5 million DOE algae grant. 


Solazyme: $21.7 million DOE stimulus grant; plus part of the $12 million biofuel contract with the U.S. Navy
The really interesting story is Solazyme, as it got both a $21 million DOE stimulus grant in 2009, and then in 2011 was rewarded with a guaranteed government customer for its biofuel that will pay four to seven times the regular fuel price: the US Navy. TJ Glauthier is a “Strategic Advisor” for Solazyme. Previously Glauthier held key positions in the Clinton administration and the DOE and served on Obama’s 2008 White House Transition Team. He is widely credited with helping to develop the energy provisions of the American Recovery and Reinvestment Act of 2009. Solazyme’s officials, including Glauthier, contributed at least $360,000 to Democrats between 2007 and 2012. Other Solazyme Obama/Democrat connections include:
  • Drew Littman, head of Solazyme’s Washington lobbying office, who was chief of staff for Senator Al Franken (D-MN). 
  • Jerry Fiddler, chairman of the board of directors, is a large Democrat donor, who contributed $24,000 to Obama’s Victory Fund. 
  •  Sanjay Wagle was a Solazyme investor through VantagePoint. He was an Obama fundraiser for the 2008 campaign and joined the administration, as a “renewable energy grants advisor” at the DOE. 
  • Jonathan Wolfson, Solazyme co-founder, sat on the board for the Center for American Progress (CAP) Clean Tech Council. CAP is responsible for crafting and promoting many key Democratic policies and is a major force behind Obama's green-energy agenda. 
 "Not so Shovel-Ready" Risky Projects tied to Obama & Democrat Buddies 

After over a month of extensive research, in today's Green Corruption File I'll be unleashing how the Obama administration has gambled on approximately 30 potentially risky biofuel projects, including advanced biofuels, which is consider a high-risk investment, costing American taxpayers over $2 billion. While a little over half of the money came out the Department of Agriculture's Biorefinery Assistance Program, a huge chunk was dished out of the 2009-Recovery Act –– the massive spending bill with over $90 billion earmarked for clean energy, which was sold as a means to stimulate the economy and create jobs. Yet we know that there were additional stimulus funds for "Clean Energy R&D:" $2.5 billion for applied research, development, demonstration and deployment activities at the Energy Department’s Office of Energy Efficiency and Renewable Energy. Of this total, $800 million was designated for biomass energy projects and $400 million for geothermal projects.

Meanwhile our new Energy Secretary, Ernest Moniz –– just a few months on the job –– just handed out $22 million for algae biofuels, and the DOE continues to divert more taxpayer money towards the expansion of biofuels. Still, there are firms with the support of Democrats that are hammering away at the DOE's loan program for their fair share of taxpayer money. But where's the oversight?

Also, a handful of these biofuels firms have received contracts from the Department of Defense (DoD), for example grants from DARPA's Living Foundries research program –– as did Amyris. The DoD is also doling out grants for the engineering and development of plants to produce jet fuel, as in the case of Fulcrum BioEnergy, Inc. Throw in the Pentagon's effort to switch to (experiment with) biofuels, which includes large contracts to purchase biofuels for the Navy and the Air Force –– both Solazyme and Gevo (covered in this post) were winners here. The alarming aspect to this piece of the story is that as reported by RT.com, the Navy and Air Force "demonstrations were triggered by President Obama’s initiative to unearth greener solutions to rising fuel costs," yet the U.S. Navy’s Great Green Fleet cost $26 per gallon of biofuels, while the Air Force spent $59 per gallon on alcohol-to-jet fuel.

How much money the DoD is wasting on green "green biofuel" would require an army of researchers, however, we do know that there is a "Green War" being waged;  "the Department of Defense has launched more green energy initiatives than any other federal agency and many are duplicative and wasteful," according to a report released in 2012 by Sen. Tom Coburn (R., Okla.) –– as reported by the Washington Free Beacon. Furthermore, in 2012 the Agriculture, Energy, and the Navy expects to fund the Navy Biofuel Initiative (under the Defense Production Act) "at $510 million in aggregate over three years" –– and the funds continue to flow despite opposition on The Hill.

With Range Fuels (we'll get to later) as the poster child for "biofuel failure," about one third of these taxpayer-funded biofuel projects are having issues and while many have survived or been revived by government assistance and renewable energy mandates, most, if not all, rely heavily upon taxpayer funds.

In reality, we won't get a true picture of the success or failure of these risky ventures (what the Obama administration calls investments), because, despite the fact that the stimulus was promised for “shovel-ready” projects, the majority of these biofuel projects –– stimulus funded and otherwise –– are only about half completed, and the jobs anticipated, saved, created, direct and indirect for each are laughable.

Still, if you are tempted to trust Recovery.org or the any of these firms to give the American taxpayer accurate or truthful jobs statistics for each of these these biofuel projects, it's important note that there has been no government oversight committee or watchdog group to validate them. Furthermore, we know that the manner in which the Obama administration calculates so-called green jobs is nothing but pure hype, if not downright lies –– janitors, bus drivers, clerks at bicycle shops, environmentalists, etc. are considered in that tally.

What's not funny is that inside the DOE's Loan Guarantee Program, with $26 billion spent since 2009 through Section 1703 and 1705, it has yielded 2,308 permanent jobs — meaning the cost to taxpayers is $11.25 million per job," as documented by the Institute for Energy Research (IER) in May of this year.

Keep in mind that I'll only be tackling the projects that I have personally kept track of: meaning that of the 31 highlighted below, I'll be documenting the corruption path of thirteen, with a few more as a bonus. I'm confident if I dug deeper, the percentage of the crony capitalism at work here would exceed 50 percent, and possibly as high as 90 percent, following the same pattern of the Energy Department's Loan Guarantee Program, which we have exposed since 2012, and thus far, have cost taxpayers over $34 billion under President Obama.

First off, about five of these 31 biofuel projects had already received government funding under the Bush administration, but today you'll learn that these so-called investments stimulated the pockets of Obama and Democrat's wealthy donors and buddies, as well as those inside the Department of Energy (DOE), stimulus authors, Congresswoman, and so on.

Besides the usual suspects, such as Kleiner Perkins (Al Gore and John Doerr), Steve Westly, Goldman Sachs, VantagePoint Capital Partners, ACORE, and Center for American Progress, today you'll meet others from the biofuel category. There's the Democrat bigwig by the name of Steven Farber, a Denver lawyer and a golfing buddy of former President Bill Clinton, whose political contacts catapulted him into a central fund-raising role for the 2008 Democratic National Convention. But the huge winner of biofuel funds in this story is President Obama's billionaire buddy, Vinod Kholsa, of which I found TEN biofuel investments, and all but one have received special grants, loans and/or government contracts totaling over $800 million of taxpayer money –– with $500 million of it directly under the Obama administration. 


Department of Energy Funded 19 Biofuel Projects: $600 million from the stimulus package 
Map courtesy of the EERE / BETO
 IBR Portfolio Overview

In December 2009, the DOE awarded close to $600 million for 19 integrated biorefinery projects from the “American Recovery and Reinvestment Act to accelerate the construction and operation of pilot, demonstration and commercial-scale facilities.”

While three were algae-based projects within the stimulus hand out, and covered in detail in my last post (referenced above: Algenol Biofuels, Sapphire Energy
, 
and Solazyme)
, there are plenty others that are confirmed corruption tales to share. But for now it is important to note that Energy Department program doled out "big biofuel bucks" via the Bioenergy Technologies Office (BETO) through the Office of Energy Efficiency & Renewable Energy (EERE), of which we know that the 2009-Recovery Act gave that office “$16.8 billion for its programs and initiative.” It seems that EERE got $107 million from the stimulus package for Advanced Biofuels Research and Fueling Infrastructure as well as that 600 million for Advanced Biofinery Projects, mentioned above.

Also, we know that Cathy Zoi –– whose past includes serving as chief of staff for environmental policy under President Clinton as well as the CEO of Al Gore’s Alliance for Climate Protection –– in April 2009, became the Assistant Secretary for the EERE.

Later in 2010, during a series of DOE vacancies, Zoi briefly filled the role of Acting Undersecretary for Energy, and in February 2011, she jumped the DOE ship to work for George Soros, another billionaire buddy of the president and key villain in this Green Corruption scandal that I tackled in March, exposing the fact that Soros' green tab exceeds $11 billion of stimulus money –– paid for by American taxpayers, and this tally is not factoring in the huge profit Soros is making off of his "green" investments.

Now it seems that Zoi has landed a new gig as the "chief strategy officer for C3, which develops data grid analytics tools for utilities like PG&E, and is the software behind GE’s Grid IQ Insight product."

Needless to say, it's unclear who exactly was involved in the decision making process in regards to the biofuel funds (picking winners and losers), but we do know that while Zoi was at the DOE, she "managed more than $30 billion of American stimulus funding for research, investment and commercialization activities in renewable and nuclear energy, the smart grid," and so on. In May, I covered the renewable energy firms that Zoi is directly tied to (even during her time at the DOE) that financially benefited from the clean-energy stimulus funds –– Serious Windows and Landis+Gyr –– as well as her connection to Pacific Gas & Electric that has an invested interest in $7.7 billion of Energy Department stimulus loans.

It turns out that for quite some time, through cost-sharing partnerships, BETO has funded various stages of biorefinery projects from the pilot, demonstration, and commercial scales. With 24 Integrated Biorefinery Projects listed as of May 2013, BETO also incorporates the stimulus grants that were announced on December 4, 2009 by then-Energy Secretary Steven Chu and Secretary of Agriculture Tom Vilsack when they gave out $600 million to advance their favored biorefinery projects.

Department of Agriculture:  Since 2009, $1.02 Billion Loan Guarantees to 10 biofuel projects

Since 2009, the Department of Agriculture (USDA) via the Biorefinery Assistance Program, as documented by Taxpayer for Common Sense in April of this year, has given out about $1.02 billion in treasury-backed loan guarantees for ten biofuel companies as recorded. In fact some of the same projects that received free taxpayer money from the DOE's BETO program also got USDA loans. This is the same program that gave us Range Fuels, costing taxpayers millions of dollars, and an interesting "green corruption" story I'll get to in a bit.


The list of taxpayer-funded biofuel projects
  1. Abengoa*: In 2007, DOE grant up to $76 million from the Bush administration /In  August 2011, Abengoa received a $132 million loan guarantee through the 1705 DOE stimulus created program (finalized), of which the DOE projected that this projects was going to create 300 construction jobs and 65 permanent jobs. Status: according to Abengoa's website, "The construction of the Hugoton plant began in July 2011 and it is expected to begin operations in June 2013." Hmmm, no update?
  2. Algenol Biofuels, Inc.*$25 million stimulus grant (01/19/2010) to "convert carbon dioxide into ethanol using Algenol’s proprietary DIRECT TO ETHANOL® algae technology, which was first announced to be in @ Freeport, TX, but now they are doing this in Fort Myers, FL  –– Status: While you can find the complete Green Corruption story on Algenol in my last post, Recovery.org places this project for the 2013 second quarter as "more than 50% completed." Also, this project had initially claimed that it would create "300 or more high-technology jobs in Florida," yet in the second quarter of 2010, jobs reported were 59.75, which seems to be their highest job creation since they began the project. Furthermore, since the fourth quarter of 2012, ZERO jobs have been reported for Algenol's pilot-scale biorefinery in Florida.
  3. American Process, Inc. (API)$17.95 million stimulus grant (01/31/2010) to "produce fuel and potassium acetate, a compound with many industrial applications, using processed wood generated by Decorative Panels International, an existing hardboard manufacturing facility in Alpena, MI"  –– Status: 2013 second quarter is more than 50% completed, with initial jobs anticipated were as follows: "19 permanent jobs for direct employees and help retain 200 jobs associated with the host facility." However, it seems that this API project didn't start adding any jobs until the third quarter of 2011, which was ONE job reported. If you mosey around you'll find more, but its unclear as to the total jobs created as well as those 200 saved
  4. Amyris, Inc.*$25 million stimulus grant (12/28/2009) to "produce a diesel substitute through the fermentation of sweet sorghum" @ Emeryville, CA –– Status: With an anticipated jobs of 35 full-time, the 2013 second quarter places this project as completed. / Unrelated to the CA biofuel plant, Amyris also snagged a DoD DARPA contract in 2012 worth $8 million, as part of DARPA's Living Foundries research program.
  5. Archer Daniels Midland (ADM): In December 2009, ADM was awarded$24.8 million stimulus grant to "use acid to break down biomass which can be converted to liquid fuels or energy" @ Decatur, IL. –– Status: While I can't locate the status of this project via Recovery.org, I can say that their "anticipated job creation" was 55 construction jobs and 14 sustained. Also, in June 2010, ADM was awarded a "$99.2 million DOE grant for a commercial-scale carbon sequestration project to capture and store 1 million tons of carbon dioxide annually from the Company’s ethanol facility in Decatur, Illinois." Yet, Recovery.org, states, "The ethanol plant and the sequestration site are both located in Decatur, Illinois, and lists ADM's DOE stimulus grant award for their "CO2 capture" in the amount of $141,405,945, which is also "less than 50% completed." Hmmm
  6. BlueFire Renewables Inc.: In December 2009, the largest single stimulus grant of $81 million went to BlueFire Ethanol Fuels Inc. (BFRE) to "construct a facility that produces ethanol fuel from woody biomass, mill residue, and sorted municipal solid waste" @ Fulton, MS. Plus, under the Bush administration, BFRE was awarded a total of "$40 million in DOE funding aimed at increasing the use of renewable and alternative fuels," noted Ethanol Magazine in 2008. (Also were seeking $250 million funding from the DOE loan program). Status: This project was supposed to create 65–70 permanent, and up to 750 during peak construction, and it turns out that Recovery.org lists this project for the 2013-second quarter as "less than 50% completed." Still, BFRE's DOE loan didn't work out and they are currently having financial issues –– construction halted in March 2013, and it seems they are out looking for more money to get rolling again. #1 with ISSUES 
  7. Elevance: $2.5 million stimulus grant (December 2009) to "complete preliminary engineering design for a future facility producing jet fuel, renewable diesel substitutes, and high‐value chemicals from plant oils and poultry fat" @ Newton, IA / Apparently, Renewable Energy Group (REG, who also purchased SoyMor) was involved in this project, and 2011, Newton also snagged grants from the USDA's Farm Bill (Renewable Energy Group, Ames $695,000) along with a six other Iowa biodiesel plants Status: In July 2010, the Elevance biorefinery pilot project and research facility in Newton, Iowa was "put on hold indefinitely," citing private financing issues. However, sometime in 2012, according to the DOE, Elevance's "research and development" was a success, and they moved their biofuel technology Natchez, Mississippi. #2 with ISSUES, but resolved 
  8. Enerkem: $50 million stimulus grant (12/30/2009) for a "project to be sited at an existing landfill and use feedstocks such as woody biomass and biomass removed from municipal solid waste to produce ethanol and other green chemicals through gasification and catalytic processes" @Pontotoc, MS / January 2011 also the recipient of USDA loan guarantee worth $80 million (finalized) –– Status of Enerkem’s biorefinery in Mississippi is a little foggy
    due to the fact that Recovery.org only has data as recent as the third quarter of 2011, which lists it as "less than 50% completed," and the jobs report is dim as well.
  9. Gas Technology Institute (GTI): $2.5 million stimulus grant (December 2009) to "complete preliminary engineering design for a novel process to produce green gasoline and diesel from woody biomass, agricultural residues, and algae" @ Des Plaines, IL –– Status: It seems that in November 2012, according to the DOE, the project was completed
  10. Haldor Topsoe, Inc.: $25 million stimulus grant (12/28/2009) for a "pilot plan to convert wood to green gasoline" @ Des Plaines, IL –– Status: While Biomass Magazine reported last month, "[Haldor and partners] have successfully completed the first production of gasoline from woody biomass in an integrated 20-barrel-per-day demonstration plant located near Chicago," Recovery.org places this project's 2013 second quarter status at "more than 50% completed." And what are the anticipated jobs here? "35 jobs during peak construction and 25 sustained jobs during operation" –– oh my. 
  11. ICM, Inc.: $25 million stimulus grant (12/04/2009) to "modify an existing corn‐ethanol facility to produce cellulosic ethanol from switchgrass and energy sorghum using
    biochemical conversion processes" @ St. Joseph, MO –– Status: With an anticipated jobs creation of 21 sustained and 50 temporary during peak construction, as of the 2013 second quarter, the status of this cellulosic ethanol project is "more than 50% completed."  
  12. INEOS Bio/New Planet Bioenergy: $50 million stimulus grant (12/30/2009) to "produce ethanol and electricity from wood and vegetative residues and construction and demolition materials" @ Vero Beach, FL / January 2011, also the recipient of a USDA loan guarantee worth $75 million (finalized) –– Status: Recovery.org's 2013 second quarter places this project as "more than 50% completed," and "400 jobs reported." Also, a July 2013 press release by the partners, "announced that its Indian River BioEnergy Center (Center) is now producing cellulosic ethanol at commercial scale." Great news, however, those 400 jobs were temporary –– with the "Center" listing only 65 full-time employees. At least for $125 million of taxpayer money, this project exceeded its anticipated job creation of 50 full-timers.
  13. Logos/EdeniQ Technologies*: $20.4 million stimulus grant (03/30/2010) to "convert switchgrass and woody biomass into ethanol" @ Visalia, CA –– Status: With this project listing 11 new positions (43 sustained) as their "anticipated job creation," we find that as of the 2013 second quarter, Logos/Eden is more than 50% completed. Yet, in June of 2012 they "hosted an event to officially launch [the] Corn to Cellulosic Migration (CCM) pilot biorefinery" –– funded in part by American taxpayers... of course. 
  14. Mascoma*: Mascoma Corporation is a cellulosic biomass-to-ethanol company that has received federal and state funding since its founding in 2006:  Then in December 2011, Mascoma received up to $80 million in DOE funding "to assist in the design, construction and operation of a commercial-scale hardwood cellulosic ethanol facility in Kinross, Michigan." This $80 million was awarded to Mascoma despite the fact that this project had only created three jobs in three years. It should be noted that in October 2008, Mascoma –– for their Michigan facility as well –– had also received a total of $26.0 million in funding from the DOE and an overall contribution of $23.5 million from the State of Michigan. Status as of August 2013: The project was expected to be completed by the end of this year (2013), but ground has yet to be broken. #3 with ISSUES that will be expanded upon later in this post 
  15. Myriant (BioEnergy International, LLC): $50 million stimulus grant (01/20/2010) to "biologically produce succinic acid from sorghum" @ Lake Providence, LA / This project is also funded with $25 million from the USDA's Rural Development B&I Loan Guarantee Program (June 2012) and a $10 million grant (2010) from the Lake Providence Port Commission and the Louisiana Department of Transportation  –– Status: 2013 second quarter, more than 50% completed, and this project, worth $85 million in state and federal funds, was "expected to create approximately 40-50 direct and highly-skilled jobs, approximately 250 construction jobs and an estimated 300 indirect jobs." Now, Myriant, in a June 17, 2013 presser, announced a critical milestone at their plant located in Lake Providence, Louisiana, and that the "Company anticipates that customer shipments will commence soon." Wonder if the jobs commenced too? 
  16. POET/DSM Advanced Biofuels, LLC*: The POET Project LIBERTY (primarily corn stover) in Emmetsburg, IA has been part of the DOE BETO for a while. And, in September 2009, additional DOE funds were awarded to this project, of which at that time "the two grant increases will bring the total financial commitment from DOE to $100 million." Plus,  $20 million in financial assistance from the State of Iowa (could be more?) /  Was also awarded $105 million loan guarantee through 1705 DOE (stimulus created) program but POET voluntarily withdrew in January 2012 due to availability of private financing –– Status: Project LIBERTY, with an anticipated 35 sustained and 200 peak construction jobs, is scheduled to begin operations in Iowa in early 2014. 
  17. Red Shield Acquisition, LLC (RSA): The Red Shield Acquisition integrated biorefinery, Old Town, ME, converts wood to sugars for feedstock. In 2008, RSE Pulp and Chemical, a subsidiary of Red Shield Environmental LLC, received up to $30 million for a wood-based ethanol facility at an existing pulp mill in Old Town, ME –– a mill that has had issues since 2003, and has been supported by Maine taxpayers. One of the most ironic problems that existed, even as recent as 2012, is that the Old Town Mill is on the EPA's watch list for air pollution. "In 2011, the Center for Public Integrity revealed that the mill was on the EPA’s watch list of the 464 violators of the Clean Air Act in serious or chronic noncompliance," documented the Bangor Daily News. #4 with ISSUES
  18. Renewable Energy Institute International (REII): $20 million stimulus grant (04/14/2010) to "produce high‐quality green diesel from agriculture and forest residues" @ Toledo, OH –– Status: A collaboration, of which this next-generation, fully integrated biorefinery (IBR) pilot plant in Ohio, anticipated 110 jobs during peak construction with an average of 30–35 jobs over the three-year project period. And as of the 2013-second quarter, is like most of these so-called "shovel-ready" projects is "more than 50% completed."
  19. Rentech ClearFuels: $23 million stimulus grant (01/29/2010) to "produce renewable diesel and jet fuel from woody biomass by integrating ClearFuels’ and Rentech’s conversion technologies" @ Commerce City, CO –– Status: With anticipated job creation for this project at 12 sustained and 50 peak construction, Recovery.org doesn't go past the final quarter of 2012, which at that time, placed it at "more than 50% completed." It was noted at that their Product Demonstration Unit (PDU) facility in Commerce City, was designed, built and operated," however, in March of this year, BiofuelsDigest,com reported, "In California, Rentech announced plans to cease operations at, reduce staffing at, and mothball its research and development Product Demonstration Unit, in Commerce City, CO, and to eliminate all related R&D activities." Translation, Rentech will be closing their Colorado demo unit, and is "currently seeking parties interested in purchasing the PDU and/or the site.#5 with ISSUES, yet it seems that it was completed prior...
  20. Sapphire Energy, Inc.*:  $50 million stimulus grant (12/29/2009) to "cultivate algae in ponds that will ultimately be converted into green fuels, such as jet fuel and diesel" @ Columbus, NM / November 2011, also the recipient of a USDA loan guarantee worth $43.6 million (finalized and recently paid back as mentioned earlier in this post) / August 1, 2013, Sapphire Energy snagged another $5 million DOE algae grant. –– Status: While you can find the complete Green Corruption story on Sapphire Energy in my last post, Recovery.org states that as of the 2013-second quarter, this New Mexico biofuel project is "more than 50% completed."  Meanwhile Sapphire claims that the Green Crude Farm "is on-schedule and on-budget," with "scale up operations and expansion of farming operations into 2013." Still, from what I gather, it will takes years to know if this slimy jet and diesel fuel will be viable –– to infinity and beyond...
  21. Solazyme, Inc.*: $21.8 million stimulus grant (December 2009) to "produce algae oil that can be converted to oil‐based fuels" @ Riverside, PA, but it states that their pilot project is in Peoria, IL Plus part of the $12 million biofuel contract with the U.S. Navy –– Status: 2013 second quarter, more than 50% completed. While you can find the complete Green Corruption story on Solazyme in my last post, it should be pointed out again that, according to Forbes, "Last year Solazyme posted a net loss of $83 million last year on sales of $44 million," and it seems that Solazyme's "green fuel" is not the money maker in the family.
  22. UOP, LLC*: $25 million stimulus grant (12/31/2009) to "integrate existing technology from Ensyn and UOP to produce green gasoline, diesel, and jet fuel from agricultural residue, woody biomass, dedicated energy crops, and algae" @ Kapolei, HI –– 2013 second quarter status: More than 50% completed, and is "expected to start up in 2014." 
  23. Verenium*: In 2008, Verenium was awarded a grant from the DOE under a $40 million program to support the development of small-scale cellulosic ethanol biorefinery plants for their project in Jennings, LA.  / Approximately 12 million from Obama's DOE and the State of Florida (Back in 2010, Verenium was "banking on" one of those DOE loan guarantees to help it build its now-delayed first commercial cellulosic ethanol plant.) #6 with ISSUES, explained a bit later in this post 
  24. ZeaChem, Inc.*: $25 million stimulus grant (04/27/2010) to "use purpose‐grown hybrid poplar trees to produce fuel‐grade ethanol using hybrid technology" @ Boardman, OR / September 2011, part of a $40 million USDA grant /  January 2012, also the recipient of a USDA loan guarantee worth $232.5 million (Conditional loan) –– With all that taxpayer money, we find that this project also, as of the 2013 second quarter is only "more than 50% completed." #7 with ISSUES, financial and jobs, and explained later in this post 
  25. LOANS ONLY START HERE: Chemtex International, Inc.: August 2012, $99 million for miscanthus and switchgrass @ NC / (finalized)  Yep, Chemtex International Inc. snagged this huge USDA loan to build a 20 MMgy cellulosic ethanol facility in eastern North Carolina’s Sampson County, called Project Alpha, of which a month prior (June 2012) had already been "awarded $3.9 million by the USDA, under its Biomass Crop Assistance Program, to support the establishment of over 4,000 acres of miscanthus and switchgrass across 11 counties in North Carolina to help supply the new facility," documented Ethanol Producer Magazine. Status: With an expectation of creating "approximately 65 direct and at least 250 indirect jobs excluding those relating to the construction of the plant," Project Alpha target start-up date is set for 2014.
  26. Coskata*:  January 2011, $250 million for woody biomass @ AL (finalized) #8 with ISSUES, explained a bit later in this  post 
  27. Fiberight, LLC: January 2012, $25 million for "municipal solid waste, seed corn waste" @ IA (conditional loan) / Fiberight also received a $2.9 million grant from the Iowa Power Fund in 2010. –– Status: Fiberight, who at the time of the loan announcement, estimated the plant based in Blairstown, Iowa, "will create 38 jobs and save 16 jobs, now Craig Stuart-Paul, CEO of Fiberight "hopes" to have construction start towards the end of 2013.
  28. Fremont Community Digester (FCD): May 2011, $12.8 million for "organic waste, agricultural residues"  @ MI (finalized) / This project also received a 1603 stimulus grant "that covers up to one third of eligible capital costs." It turns out that FCD’s majority owner is INDUS Energy, LLC, an investment group located in Bingham Farms, MI. Managing member is NE Biofuels LLC of Novi Energy. During FCD's July 2011 groundbreaking announcement, "The head of Novi Energy said that even though the project had suffered ups and downs – even on life support for a bit," he was happy. Status: The latest data that I could find on this project is from the Detroit Free Press (dated January 2013), which reported that the Fremont Community Digester plant began making electricity (out of blend of food wastes and livestock manure) in the winter of 2012, and the plant employs 12 workers.
  29. Fulcrum Sierra BioFuels, LLC: August 2012, $105 million for "municipal solid waste" @ NV (finalized)Also seeking $85 million funding from the DOE loan program Status" According to Fulcrum's 2012 press release, "The Sierra BioFuels Plant will be located approximately 20 miles east of Reno, Nevada in Storey County," and is supposed to create "53 full-time and more than 430 engineering and construction jobs." Status: In November of 2012, it was reported that Fulcrum BioEnergy Inc. withdrew its IPO. However, despite the setback, Fulcrum, at that time, planned on proceeding with their Nevada project –– that is after they have "secured all of the capital necessary to fund construction of the plant." So we may see our taxpayer money at work by 2015...maybe. Unrelated to the Nevada project, Fulcrum, in May of this year, was awarded a $4.7 million grant by the U.S. Department of Defense (“DoD”) to begin engineering and development on a plant to produce jet fuel. 
  30. Range Fuels, Inc*: January 2009, $80 million for "woody biomass" @ GA (finalized but project failed, costing taxpayers millions) / Also sometime in 2007, when the Bush administration awarded "six Cellulosic Ethanol Plants up to $385 million in federal funding," Range Fuels (formerly Kergy Inc.) of Broomfield, Colorado, got up to $76 million. The proposed plant was to be constructed in Soperton (Treutlen County), Georgia. #9 with ISSUES: Failed in December 2011 with more details on this project later in this post 
  31. SoyMor: June 2009, $25 million for "corn or soybean oil" @ MN (finalized) / What's funny about this biofuel deal is that the UDSA gave SoyMor millions knowing that "High feedstock costs forced SoyMor to suspend operations at its Albert Lea, Minn., facility in the spring of 2008" –– meaning that they were struggling, and this was an attempt at a bailout. But things didn't get better for SoyMor, because in July 2011, Renewable Energy Group (REG) became the new owner of the SoyMor Biodiesel LLC facilities located in Albert Lea, Minn. "The purchase included SoyMor’s biodiesel plant as well as its soy lecithin facility" –– a 30 million gallon per year (mmgy) biodiesel plant that had been idle since 2008. Status: from what I gather in September 2011, REG opened the REG Albert Lea biodiesel plant in Minnesota, which as stated, was originally was built and opened by SoyMor. #10 with ISSUES, that apparently got resolved –– I just wonder if they paid back the $25 mill...
NOTE: Above is the list of taxpayer-funded biofuel projects that I've compiled, along with help from the following charts listed below. Starting with the BETO projects funded with DOE grants –– the majority announced in December 2009 funded by the Recovery Act, unless specified. At the conclusion (from #25-31) I've listed the USDA loans, yet I've taken measures so that those biofuel projects that were winners of both grants and loans are not counted twice.
    CODE:
  • Asterisk*: Cronyism will be covered in this Green Corruption File
  • Highlighted: Obama's biofuel stimulus grants 
  • Green Italics: DOE biofuel stimulus loans 
  • Red Type: Those that received a loan guarantee from the USDA 
  • ISSUES: briefly explained except for when noted 
Five projects were not found in the 2009-DOE biofuel grant presentation, when then-Secretary Chu dished out 19 awards, however, they are found within the DOE's "Integrated Biorefinery Projects Awarded DOE Funds" inventory. I'd like to point out that they comprise of Abengoa, Mascoma, POET/DSM Advanced Biofuels, LLC, Red Shield Acquisition, LLC (RSA), and Verenium –– and this is primarily because they were funded by the Bush administration, yet some did receive funds from other DOE programs under Team Obama, while others are still seeking funds at this time.

Additionally, if you look at the the Bioenergy Technologies Office interactive map, provided by EERE and last updated May 2013, it states that "grey markers signify projects are no longer active with BETO," which includes Verenium, Elevance, and GTI. But there are five others that are not listed with the final 24 such as; Flambeau, Lignal, New Page, Pac. Biogasol and Range Fuels, of which some had to terminate their DOE awards, and Range Fuels ended up a boondoggle.


Breaking Down the Biofuel Corruption 


Abengoa

The DOE supports the Abengoa Bioenergy Biomass of Kansas" of which this "Integrated Biorefinery (project located adjacent to and west of the City of Hugoton, in Stevens County, Southwestern Kansas) states, "it will convert biomass feedstocks to fungible liquid transportation fuels and green power."

Abengoa had already received a DOE grant up to $76 million for their proposed plant in the state of Kansas sometime in 2007, when the Bush administration awarded "six Cellulosic Ethanol Plants up to $385 million in federal funding." But what's interesting about the Spanish company Abengoa is that the Department of Energy’s (DOE) loan program gave them than $2.8 billion in loans — making them the second largest recipient of the DOE 1705 loan program money (created by the 2009-Recovery Act), and a huge part of the Green Corruption scandal, that Marita Noon and I have covered many times. 

While two of the taxpayer-funded loans were for solar, the third went to fund a biofuel project located in Kansas. Despite the fact that Fitch rated the this project as "extremely speculative" –– just like the majority of the DOE loans: junk bonds and jammed packed with cronyism and corruption –– in August 2011, the Energy Department awarded Abengoa a $132 million loan in order to "begin construction of a first-of-its-kind, commercial-scale biofuel plant" –– projected to "support approximately 300 construction jobs and 65 permanent jobs about 90 miles southwest of Dodge City, KS."

Furthermore, in December 2012, the Export-Import Bank of the United States (another huge taxpayer-funded giveaway fueling corporate welfare and cronyism) authorized $150 million in loans to Abengoa: $78.6 million direct loan to Spain-based Abengoa, and $73.6 million direct loan to a wind farm in Uruguay, which is owned by Abengoa –– as part of "an ambitious goal set by President Obama, of doubling U.S. exports in five years." 

So how did such a poorly rated, non-American company get billions in US taxpayer loans? And now we can add millions in grants. Can you say “crony corruption?” A story Marita and I broke last summer, yet I revisited in January 2013, exposing internal Energy Department email interactions that demonstrated a rush on Abengoa as well as other DOE deal making, which in this case included White House "intervention," and much more shenanigans. However, in short, Abengoa has a cadre of cronies in high places which not only involves Al Gore (since 2007), but former New Mexico Governor Bill Richardson, California’s Democratic Senator Dianne Feinstein, and of course, President Obama — plus, many others whose names you’ve probably never heard of. 


Amyris

Speaking of Congresswoman Feinstein, let me introduce you to, Amyris Biotechnologies, and if Range Fuels is the poster child for clean-energy failure (covered in detail later), Amyris is the template for clean-energy corruption.

Amyris is a Kleiner Perkins and Khosla Ventures investment that happens to be an exited investment of The Westly Group –– all three big Venture Capital (VC) firms with direct ties to the Obama White House as well as inside the Energy Department. Not to mention those that   helped craft the stimulus bill, who eventually raked in tens of billions of tax dollars from the Green Bank of Obama –– the focus of my January 2013 post.

Due to the fact that Khosla and Westly were big winners of biofuel bucks, I'll share more Intel on them in a bit, but if you've been following my work, you'll know that I gave a detailed report on Kleiner Perkins this year, and they made out in the biofuel category as well: Amyris, EdeniQ, and Mascoma.

It's worth repeating that billionaire John Doerr, partner at Kleiner Perkins, along with his "billionaire climate buddy" Al Gore, is considered "a very big-ticket Obama donor" by New York Magazine, who in February 2011 hosted a star-studded billionaire Silicon Valley dinner for the president. Doerr was one of the chosen members of on President Obama’s Jobs Council (also from Obama's 2009 PERAB), but early on he ultimately shaped what went into the energy sector of the 2009-Stimulus package. Gore and his VC firm Kleiner Perkins is tied to at least $10 billion of Obama's taxpayer funded clean-energy spending spree.

Additionally, I've noted Obama’s Wall Street Buddies in many of my Green Corruption files, and have written extensively about the president's connection to Goldman Sachs –– the number two top Obama donor in 2008. Also, two Goldman executives sat on Obama's 2008 Finance Committee, Bruce Heyman and David Heller, while Jennifer Scully and Bruce Heyman were 2008 bundlers –– Heyman was also a 2012 Obama bundler.

Even without extensive research, Goldman Sachs is tied to many other clean-energy projects that received loans, grants and special tax breaks from the Obama administration, and what I've tracked so far are billions of stimulus money from the DOE. Besides First Solar, Cogentrix, U.S. Geothermal, and others that I covered in January 2013, Goldman is also credited as the “exclusive financial adviser” for now bankrupt Solyndra, and in 2010, handled the IPO of both Tesla Motors and Amyris.

 But there’s more to the Amyris story, of which in late 2011, Breitbart.com reported

“Peter Schweizer, president of the Government Accountability Institute, said President Barack Obama had a "recycling" program that used crony capitalism to reward its campaign contributors, who would then funnel money back to the Obama campaign. 
Schweizer said the Obama administration treated taxpayer dollars as "gift bags" to give to its top donors, which he called "the Obama recycling program." 
In many instances, Schweizer said top Obama administration bundlers and influential Democrats -- like California Senator Dianne Feinstein and former Vice President Al Gore-- invested in companies before those companies received government-backed loans and grants, and then saw their investments flourish. 
One such company was Amyris biotechnologies in Berkeley, California. Weeks before Amyris received a $25 million grant from the Obama administration, Feinstein and her husband bought nearly a $1 million in equity in the company. Then, the initial investors, such as Gore, saw a $12 million investment balloon to more than $80 million after they took the company and cited the government grants as a reason the company would be successful. As Schweizer noted, the IPO was only possible because of taxpayer dollars.
Also in 2012, the "U.S. Department of Defense's Advanced Research Projects Agency (DARPA) awarded Amyris a contract to develop tools that can expand the scope of our industrial synthetic biology technology platform across various biological platforms and cell types," announced Amyris on their site.


Logos/EdeniQ Technologies

The Logos and EdeniQ pilot facility is listed as a project that "will test methods to convert non-food feedstocks into ethanol." It turns out that Logos, Inc. and EdeniQ, Inc. "are retrofitting EdeniQ’s existing pilot plant in Visalia, California."

In December 2009, this project snagged one of those Energy Department stimulus grants worth $20.4 million. Also, in June 2012, EdeniQ secured a $3.9 million from California Energy Commission to "support California feedstock and corn ethanol facilities’ innovations."

In a very eye-popping report by the Center for Public Integrity you'll meet the Steve Westly –– the poster child for the dirt behind the majority of the clean-energy deals –– via their piece March 2011 entitled, "Green bundler with the golden touch: Obama fundraiser got clean energy aid, then perch to advise Energy Secretary.

It is worth repeating that Steve Westly is the Founder and Managing Partner of The Westly Group as well as another Obama crony who made a DNC 2012 cameo. Westly is a two-time Obama bundler, sat on the campaign’s National Finance Committee, and was a co-chair of the 2012 Technology for Obama group. He was briefly considered for a cabinet level position in the Obama administration, and in August 2010, Westly secured a top advisory role inside the DOE, close to then-Energy Secretary Steven Chu.

While IWatch points to "a trail of [green] loans, grants and tax breaks," I uncovered much more: as of January 2013, of the listed 20 firms (exited and current), at least 50 percent of The Westly Group portfolio were winners in the Obama clean-energy spending spree, and one of those is EdeniQ. But Westly is not the only VC firm that has an invested interest in EdeniQ: it is also a Kleiner Perkins investment as well, as noted above. 


Mascoma


Keeping in line with Kleiner Perkins, one of the big winners of taxpayer biofuel funds was Mascoma Corporationa New Hampshire-based renewable energy company that specializes in cellulosic ethanol, which has received state and federal clean-energy grants, contracts and awards since 2006 for research and various projects. 



While part of the $200 million that Mascoma scored came from former-President Bush's Energy Department, Mascoma announced –– for their biofuel project in Michigan –– on Dec. 14, 2011, "a cooperative agreement with the federal Department of Energy, in which Mascoma would receive "up to $80 million in DOE funding" to assist in the design, construction and operation of a commercial-scale hardwood cellulosic ethanol facility in Kinross, Michigan." 

This $80 million, which came from the DOE's EERE, was awarded to Mascoma despite the fact that this project had only created three jobs in three years, as pointed out by the Washington Examiner last year. It should be noted that in October 2008, Mascoma –– for their Michigan facility as well –– had also received a total of $26.0 million in funding from the DOE and an overall contribution of $23.5 million from the State of Michigan.

Jobs are not the only issue facing Mascoma's Michigan biofuel facility: they've had other problems, and made it on my 2012 Green Alert: Tracking President Obama's Green Energy Failures post, in the troubled category. Besides what I've documented, in March 2013, Mascoma withdrew its registration for a $100 million initial public offering (due to market conditions), of which SmartPlanet.com, noted, "Mascoma’s initial IPO filing–back in September 2011–illustrated what problems plague not just the company, but the rest of the cellulosic ethanol industry."




Nevertheless, this month, Valley News reported that Mascoma Corp. "has lost its major partner in a proposed $233 million ethanol plant in Michigan" –– energy giant Valero Energy Corp ––  and "that a funding partner is being sought to build the Kinross, Mich., facility and another plant in Alberta, Canada." It turns out that "the Michigan plant has incurred at least $150 million in debt and, as most of these biofuel projects, "has relied primarily on government grants and smaller amounts of venture capital for its existence." Still, two years after getting $80 million from the Obama administration, and state funding as well, "the project was expected to be completed by the end of this year (2013), but ground has yet to be broken," confirmed Valley News.

Mascoma is not only a Kleiner Perkins investment but also one of Khosla Ventures –– both with direct ties to the Obama White House that I covered in January (and more on Khosla in a bit), but Mascoma also has the backing of another big VC firm with Obama allies at the helm: VantagePoint Capital Partners, which I tackled in my last post due to the fact that they are also an investor in Solazyme, Inc.

POET/DSM Advanced Biofuels, LLC

Apparently, the Bush administration had supported POET Project LIBERTY, a commercial-scale, cellulosic ethanol plant in Emmetsburg, Iowa. As mentioned in my bullet point presentation, in September 2009, additional DOE funds were awarded to this project: "two funding increases from DOE to help establish a market for corn cobs. The second, expected next year, is estimated to provide an additional $13.15 million."

However, if you add up the all the funds that the DOE has doled out to POET, as of 2009, the total financial commitment is at about $100 million of taxpayer money. Also, according to the Project LIBERTY site, "The State of Iowa has also taken a lead role in helping make this process a reality by contributing $20 million in financial assistance, yet, it's unclear if the $20 million from the State of Iowa includes the funds ($14.8 million) that Project LIBERTY got from the Iowa Power Fund, which contracts were finalized in June of 2011.

Be that as it may, all this free taxpayer money for Project LIBERTY to produce an anticipated 35 sustained and 200 peak construction jobs, which is scheduled to begin operations in Iowa in early 2014, is quite amazing. 

Still, Poet, LLC, one of the largest biofuel producers in the country, in September 2011 had received a $105 million loan guarantee from the Energy Department for their Iowa project –– one of those Obama stimulus loans. Then "on January 23rd 2012, POET announced they would withdraw from the federal loan guarantee program. Instead of receiving the $105 million federal loan guarantee, POET plans to partner with Royal DSM, a life and material sciences company, to further develop cellulosic ethanol," documented Taxpayers for Common Sense. 

According to OpenSecrets.org, the POET PAC "didn't make any contributions to federal candidates in the 2008 election cycle," but they started donating in 2010, giving more to Republicans than Democrats, and did so again in 2012 –– supporting only GOP 2012 presidential candidates. Then we discover in December 2011 from USA Today that POET was a big donor to the Former House speaker Newt Gingrich: "The political action committee and employees of ethanol maker POET, along with their relatives, donated $20,000 to Gingrich's campaign to emerge as the No. 2 contributor." Also, "POET donors include company CEO Jeff Broin, who chairs Growth Energy, an ethanol industry lobbying group that hired Gingrich as a consultant in 2009."

True, but what USA Today missed is the fact that POET's connections to the American Council on Renewable Energy (ACORE) are pretty thick. Not only as member, but we find that Doug Berven, POET's Vice President of Corporate Affairs is on ACORE's Board of Directors.

Who is ACORE?

As mentioned in a few posts, ACORE is an organization where we find many of our Green Corruption villains, however, if you enter in Michael Eckhart, who after spending the last decade as the founding President (2001) and a member of the Board of Directors at ACORE, joined Citigroup as Managing Director in February 2011, there's more to this part of the scandal. 

ACORE is a renewable energy lobby powerhouse –– a band of Music Man businesses and deep-pocketed backers, of which PJ Media had alerted to 2011: “Eckhart and the ACORE membership also helped design the Department of Energy grant programs that partly offset the loss of tax equity financing arrangements. The tax equity financing schemes had been Wall Street’s main vehicle for bankrolling large wind and solar power plants, but they became moot when major losses …"

It is not clear which grant program that ACORE "helped design," however we do know that there are numerous ways that the Energy Department gives out free "green money" –– as is the case here with billions in biofuels bucks. Besides the DOE loans, there are smaller grant programs like the ARPA-E and the SunShot Initiative. Yet additional programs were created under the American Recovery and Reinvestment Act of 2009, such as $11 billion for Grid Modernization, the $5 billion Home Weatherization Program, as well as $3.4 billion for carbon capture and sequestration demonstration projects, $2 billion for research into batteries for electric cars, $500 million for Green Jobs Training, and so on. Then throw in the Clean Energy R&D, where as stated, "$2.5 billion went for applied research, development, demonstration and deployment activities at the Energy Department’s Office of EERE," of which a huge chunk was designated for biomass energy projects and geothermal projects.



In fact, as I've said over and over, President Obama's stimulus was jam-packed with clean-energy provisions that included at least $90 billion of "green spending." And one of the biggest stimulus scams is coming out of the 1603 Treasury Program that was covered in my January 2013 Big Wind Story, and it turns out that ACORE ensured that the 1603 was extended through 2012. At the time of my post, the Feds had doled out $16 billion, and as they continue to give out free taxpayer money, the tab for that program is now at $19,349,675,402.  


The author of the PJ Media piece, Christopher Horner, a senior fellow at the Competitive Enterprise Institute, goes on, "At what point does this sort of admission warrant some investigation by Congress? I know it’s just a group representing 650 companies writing a federal program from which they would benefit. Lobbyists writing policies and all that. But, still." 


Still, Marita Noon and I exposed Citigroup's part in this massive mess this year in two exposés: "Citigroup’s Massive 'Green' Money Machine" and "Wall Street Walks on the White House," chronicling the Citigroup's carbon footprint inside the Obama administration and this Green Corruption scandal. But don't underestimate ACORE's, another one of the Gang of Eight stimulus authors, which are cashing in big time on green funds, and I've been exposing for some time. But for now, we'll stay with Obama's biofuel buddies...

ZeaChem, Inc.


Like all the other DOE biofuel stimulus grants, in December 2009, ZeaChem (a Colorado-based energy company) snagged a $25 million grant (which was cinched in May of 2010) for a 250,000- gallon-per-year cellulosic biorefinery in Boardman, Oregon.


Then September 28, 2011, ZeaChem and their partners were awarded part of a $40 million grant by the U.S. Department of Agriculture (USDA) for the commercialization of advanced “drop-in” biofuels –– again at their Oregon facility. But January 26, 2012 was especially sweet for ZeaChem when Agriculture Secretary Tom Vilsack announced that the "USDA had approved a conditional commitment in the amount of $232.5 million to ZeaChem Boardman Biorefinery, LLC (ZBB) [to make fuel from "poplar trees, wheat straw and corn stalks"] through the Biorefinery Assistance Program." 


Hmm, I thought trees were important for our environment, but I digress.

ZeaChem also snagged additional government handouts; such as in July 2012, they were "awarded $6 million for Hawaiian Biofuels Project" and in October 2012, they were "selected for $4.6 million award from California Energy Commission to develop renewable low-carbon biofuels."


But with close to $300 million of taxpayer money that ZeaChem received for their DOE Oregon project, what is the anticipated job creation? A whopping 19, yet even if you factor in the USDA's projections, which they state, "Projected to be operational by late 2014, the biorefinery will create 65 jobs while supporting another 38 jobs with the parent company." However worse is that in April 2013, the Oregonian reported on the financial troubles surrounding ZeaChem, and that "the company failed to close on a bridge loan, leading to layoffs at the Oregon plant as well as a lab in California and the Colorado headquarters."


As documented in Peter Schweizer's Throw Them All Out (chapter on green energy: "Spreading the Wealth to Billionaires..."), the Democrat cronyism is vast. "One of ZeaChem's major investors are Globespan Capital Partners, where managing director Jonathan Seelig is a Democratic (only) donor. The other major investor is PrairieGold Venture Partners, which is headed by Paul Batcheller, a former aide to then-Senator Tom Daschle" –– you know, one of the longest serving Senate Democratic leaders in history and the only one to serve twice as both majority and minority leader, who is also a Distinguished Senior Fellow at Center for American Progress (CAP) –– CAP a driving force behind this dirty clean-energy scheme. 

The other ZeaChem investors are worth noting, because when you've been around this clean-energy dirt long enough you recognize that the winners in the Obama sweepstakes are everywhere, as I did. However, the big find here is a Democrat bigwig by the name of Steven Farber, the President and founding partner of Brownstein
Hyatt Farber Schreck –– who as exposed by Schweizer, lobbied on ZeaChem's behalf, yet they also had the help of
Dutko Worldwide as well as Liebman & Assoc, records OpenSecrets.org.

Farber is a golfing buddy of former President Bill Clinton, who, according to the New York Times, "In terms of lobbyists, few are more connected — both west of the Mississippi and in the corridors of power in Washington — than Steve Farber, a Denver lawyer whose political contacts thrust him into a central fund-raising role for the [2008] Democratic National Convention" located in Farber's back yard. The powerful attorney and co-chairman for the host committee, said in an October 2008 interview, "It was supposed to be $40 million, but you just knew it was going to be closer to 50, and when it was all in, we ... raised closer to 60.”

Mr. Farber's law firm members have donated around $1.1 million to candidates, parties and political action committees since 2005, with the majority going to Democrats. Nevertheless, since the New York Times 2008 reporting, in 2010, the Brownstein, Hyatt "PAC Contribution Data" breakdown was significantly higher to the Left: 63% to Democrats, 35% to Republicans, while in 2012, it slightly shifted to red: 47% to Democrats, 53% to Republicans.

Also documented in Schweizer's book, "shortly after the federal government started writing Recovery Act grant checks, Farber boldly placed an ad in the Wall Street Journal" touting his firm’s clout (access and influence): “Expertise in sustainable energy law is worth nothing without connections,” the advertisement read. “Learn how we’ve helped clients obtain funding from the Department of Energy through the American Recovery and Reinvestment Act.”

"Brownstein Hyatt Farber Schreck is at the forefront of representing companies in the clean technology sector," states their website, and while they draw political talent from both sides of the aisle –– even from the Department's of Energy and Interior –– their assistance goes beyond ZeaChem's $25 million stimulus cash. For example, in 2010, which was their largest amount of lobbying income in over a decade that almost hit $25 million, it included representation of additional clean-energy stimulus money winners such as Amyris Biotech, CH2M HILL, First Wind, NextEra Energy, Prologis, US Geothermal –– and all but Prologis I've covered in detail here at The Green Corruption Files. (NOTE: stats on political donations and lobbying expenditures are from OpenSecrets.org, and linked accordingly.) 


Another Obama Billionaire Buddy, Khosla Ventures: a huge VC winner of the taxpayer-funded green spending spree, which includes  least $800 million of biofuel bucks

Photo from theiitian.com 
Khosla Ventures is where you'll find another Obama billionaire buddy, Vinod Kholsa, who is labeled as "one of the most influential venture capitalists in Silicon Valley." Khosla was an affiliated partner of Kleiner Perkins (now a PARTNER EMERITUS), whose VC firm Khosla Ventures has also invested in some of the same companies as Kleiner Perkins –– many of which, like I stated, were big winners of green energy funds.

As divulged in Peter Schweizer's book, Throw Them All Out, Mr. Khosla "had been the head of Obama's India Policy Team during the 2008 election." Later we find out from Breitbart.com that even though Khosla donates to Republicans, he is a major Democrat donor, who, in October 2012, donated one million dollars to Priorities USA Action, a top liberal super PAC that backed President Barack Obama’s reelection." And as recent as June 2013, Vinod Khosla hosted a dinner for President Obama at his Portola Valley home.

Last year, during the 2012 presidential elections, Bloomberg News reported the following statement by Mr. Khosla:
Khosla, a registered Republican, breaks with inside-the-beltway Republicans most significantly over the significance of climate change risk. "I'm fiscal hawk. I vote against all taxes, but I do believe the environment, and climate change, is a bigger issue than fiscal deficits are as a risk to the nation."
Fine and dandy, however, maybe Mr. Kholsa is liberal when it comes to government spending only when taxpayers foot the bill in order to save the planet, because he's one the big venture capitalists sitting in the winners' circle.

Although I kept a file on Khosla since 2010 –– with over 50 investments within their sustainability portfolio –– I didn't expose their entire part in this scandal. However, in my January 2013 post, I documented the Kleiner Perkins and Khosla Ventures connection, along with their related clean-energy investments, which were winners of stimulus funds and, at that time, included Ausra Inc, AltaRock, Amyris, Great PointEnergy, Mascoma, and QuantumScape.

Also in my post, I shared Coskata as well as Nordic WindPower, the latter was also a Goldman Sachs investment, which snagged a small amount of stimulus funds and went bankrupt. So, today we'll take a peek at Khosla's biofuel, advanced hydrocarbon categories, which only lists seven. However ALL but one of those got renewable energy stimulus funds, other energy funds from at the federal and state level, as well as special deals –– with one hold out seeking a billion dollars from the Energy Department.
  1. Amyris
  2. Coskata
  3. Gevo
  4. KiOR
  5. LS9
  6. Lanza
  7. Mascoma
Needless to say, not listed on Khosla's current portfolio are a few more found on Gigaom.com 2007 "10 Khosla Biofuel Bets" that include the following:

  1. Cilion: Goshen, CA 
  2. Hawaii BioEnergy: Honolulu, HI* 
  3. Mascoma Corporation: Cambridge, Mass. 
  4. Range Fuels: Broomfield, CO* 
  5. Coskata Energy: Warrenville, IL 
  6. Gevo: Pasadena, CA 
  7. LS9: San Carlos, CA 
  8. AltraBiofuels: Los Angeles, CA 
  9. Amyris Biotechnologies: Emeryville, CA 
  10. Celunol, (now Verenium): Cambridge, Mass.* 
If we take the seven from Khosla's biofuel portfolio and add the three marked here (*), that confirms TEN biofuel investments by Kholsa. Now after a month of research, we can confirm that all but one have received special grants, loans and/or government contracts totaling over $800 million –– and while about $300 was awarded under the Bush administration, the majority was under Team Obama. Here's the breakdown:


#1)  Amyris: complete corruption story covered earlier that received a $25 million stimulus grant from the Obama administration to "produce a diesel substitute through the fermentation of sweet sorghum" @ Emeryville, CA



#2) Coskata: USDA $250 million loan guarantee for woody biomass @ AL (finalized)

Coskata News:
Former Pennsylvania Governor Ed Rendell
with Coskata CEO William Roe
 
In January 2011, when the U.S. Department of Agriculture awarded $405 million in loan guarantees for biofuel refineries, Venture Beat noted, "Coskata received the largest biofuels plant loan guarantee ever: $250 million for a cellulosic ethanol facility in Green County, Ala. with an annual capacity of 55 million gallons per year. Coskata is backed by Khosla Ventures, Blackstone Group and GM, among others. It uses woody biomass as feedstock."

While this was a project heralded as a jobs creator –– "the new plant will bring 300 construction jobs and 700 direct and indirect jobs to Boligee."  –– by 2012, things went sideways. On July 20, 2012, Bloomberg News reported, Coskata "shelved its $100 million initial public offering and [was] seeking investors for a plant that will convert natural gas into ethanol."

Eleven days later, we discover that the Green County Biofuel plant for Boligee got axed: "Coskata Inc. had announced in January 2011 that it would build a bio-refinery at the Crossroads of America Park in Boligee. The site was selected because the plentiful supply of timber in the region would provide ample wood chips and wood waste needed to produce ethanol. The company later decided to instead use natural gas, which is less expensive, to make ethanol," wrote Tuscaloosa News.

Listed on their site, Coskata currently has two facilities: Lighthouse located in Madison, Pennsylvania and in Warrenville, Illinois, and the latter is where they house several development labs. But what is unclear is what they did with the $250 million of taxpayer money, which was supposed to be for the Alabama biofuel project. It's a biofuel mystery. 


#3) Gevo: Under Obama, $600 thousand Air Force contract; $5 million grant from the USDA; and $1.8 million grant from the DOE and USDA Biomass R&D Initiative

In my last post, Obama's Biofuel Buddies, Part One, with a special emphasis on algae, I had given a complete overview of Solazyme, and their clean-energy dirt. But let me give you a recap. At the end of 2011, Solazyme [and Dynamic Fuels] secured a $12 million contract with the U.S. Navy to unload hundreds of thousands of gallons of biofuel, which was priced at an estimated four to seven times the normal cost of regular jet fuel. This deal, which included the purchase for 450,000 gallons of advanced biofuels, at the price of $15 per gallon (some reported $26 a gallon) , was for the "first demonstration [off the coast of Hawaii] of the so-called "'Great Green Fleet'" — an entire aircraft-carrier strike group relying on alternative energy sources," reported Wired.com.

But it turns out that as part the "Pentagon push, which has escalated under the administration of President Obama, to adopt green solutions to rising fuel costs, the Air Force bought 11,000 gallons of alcohol-to-jet fuel from Gevo Inc, a Colorado biofuels company, at $59 a gallon in a program aimed at proving that new alternative fuels can be used reliably in military aircraft - once, that is, their pricing is competitive with petroleum, which now costs $3.60 a gallon," reported Reuters in July 2012.

While Gevo's contract to supply 'alcohol-to-jet' (ATJ) based jet fuel to the U.S. Air Force, worth $600,000 was awarded on September 28, 2011, the Huffington Post in July 2012, noted that
Gevo spent $360,000 over three years for the services of Green Capitol LLC, and that "the principals of the firm are a former Capitol Hill aide who worked on energy programs and a former official of the Air Transport Association, the major airlines' trade organization, who pushed the Air Force to experiment with biofuels." Interesting enough, Huffington Post noted a tiny fraction of the Khosla connection, but reported, "Khosla told Reuters through a spokesman that he had no knowledge of the Air Force contract and declined further comment."

Also, on Sep 28, 2011, Gevo was awarded a $5 million grant from the USDA for the development of biojet fuel from woody biomass and forest product residues, which was "a portion of a $40 million grant presented to the Northwest Advanced Renewables Alliance (NARA), a consortium led by Washington State University (WSU)," stated a Gevo presser. 

But Gevo received government assistance back in November 2009, when the DOE and USDA doled out a dozen grants for biomass totaling $24 million of taxpayer money. At that time, Gevo was awarded $1.8 million as part of the "DOE/USDA Biomass R&D Initiative to help fund ongoing development of its yeast strain to produce biobutanol from cellulosic biomass."


#4) Hawaii BioEnergy: Honolulu, HI: Under Obama, $25 million stimulus grant went to UOP, LLC for an "integrate existing technology from Ensyn and UOP to produce green gasoline, diesel, and jet fuel from agricultural residue, woody biomass, dedicated energy crops, and algae" @ Kapolei, HI

In 2009, UOP LLC, a Honeywell (NYSE: HON) company was awarded "$25 million stimulus grant to build a demonstration unit in Hawaii to convert cellulosic biomass into green transportation fuels." According to Honeywell press release, dated January 2010, the demonstration plant refinery in Kapolei, Hawaii, which broke ground in August 2011, "is expected to start up in 2014."

While Honeywell International Inc., the billion-dollar company, is also a big player in this clean-energy scam, what's relevant in this story is that the Pilot-Scale Biorefinery UOP Project includes other participants : Tesoro; Ensyn; Pacific Northwest National Laboratory; Ambitech; Hawaii BioEnergy; Group70; Michigan Technological University; Ceres; Cargill, Inc.; Grays Harbor Paper LP; Imperium Renewables; Mesa Engineering; Countrymark Petroleum; Kern Oil; Honeywell; Boeing; and General Motors.

While Hawaii BioEnergy is not listed on the Khosla sustainability portfolio, they are part of Gigaom.com 2007 "10 Khosla Biofuel Bets" and Hawaii BioEnergy does include Khosla Ventures as one of its partners. 

Meanwhile, just this month, the new Energy Secretary Ernest Moniz. –– as part of the Obama administration’s Climate Action Plan –– announced over $22 million in new biofuel investments, where nearly $16.5 million of more free taxpayer cash went to "four projects in California, Hawaii and New Mexico aimed at breaking down technical barriers and accelerating the development of sustainable, affordable algae biofuels."
  • Hawaii Bioenergy ($5 million DOE grant)
  • Sapphire Energy ($5 million DOE grant)
  • New Mexico State University ($5 million DOE grant)
  • California Polytechnic State University ($1.5 million DOE grant)

#5) KiOR: seeking $ 1 billion DOE loan, and we will watch if they get it

According to their website, "KiOR is a next-generation renewable fuels company that has developed a proprietary technology platform to convert biomass into renewable crude oil that is processed into gasoline, diesel and fuel oil blendstocks." 

In February 2011, Gigaom headlines hit the airwaves, "KiOR Seeks $1B DOE Loan Guarantee," which summarized some key points, "Khosla-backed bio-crude startup KiOR is seeking a $1 billion loan guarantee from the DOE, and that the money would "be crucial to the company’s plans to scale up production." By August 2011, "KiOR put its application for 2011 on hold in May, with plans to roll it over to 2012 — assuming the program gets funded for 2012." 

Nevertheless, according to Taxpayers for Common Sense April 13, 2013 DOE Loan Guarantees: Biofuels and Biomass analysis, Kior's $1 billion loan was for "renewable crude oil from algae and wood chips," at facilities in GA, MS, and TX –– and the status listed is "Environmental Assessment on hold."

#6) LS9: at least $13.5 million ($4.5 from the State of Florida and $9 million from Obama's DOE)

In a July 2011 presser, LS9, Inc., a technology leader in the development of sustainable products, announced that it had "been awarded in conjunction with partner HCL CleanTech Ltd., a $9 million grant from the Department of Energy (DOE) to improve and demonstrate an integrated process to convert biomass feedstocks into fermentable sugars and then into diesel and other fuel and chemical products. As part of the DOE grant, LS9 and HCL CleanTech are combining their proprietary technologies to produce drop-in advanced biofuels and other valuable bio-based chemicals from wood waste and other agriculture waste, commonly referred to as biomass."

Apparently in May 2012, LS9, Inc. got some help from Florida Opportunity Fund's (FOF) Clean Energy Investment Program. LS9 presser stated, "FOF invested $4.5 million to help fund the retrofit of LS9's demonstration facility in Okeechobee, Fla., to develop biodiesel and renewable chemical products." 

Early this year, we discover that "Venture backed biofuel startup LS9 is not shutting down, despite a report, but has changed up its CEO and restructured in the fourth quarter of 2012. It’s a difficult time for biofuel companies, given some VCs have been slowing backing out of greentech investing, wrote Gigaom.com on January 23, 2013.

#7) Mascoma: complete corruption story covered earlier, who thus far has snagged almost $300 million tax dollars since the Bush administration, with $80 million directly from Obama

#8) Range Fuels, Inc:  Under the Bush administration Range Fuels (formerly Kergy Inc.) of Broomfield, Colorado, got up to $76 million. / From the Obama administration, $80 million USDA loan for "woody biomass" @ GA –– and this boondoggle ended up costing costing taxpayers about $92.5 million

#9) LanzaTech: Under Obama, besides special DOE and DOD deals, which includes purchasing the Range Fuels factory,  Lanza got at least $11 million tax dollars from the DOE and DOT 

Sometime in 2007, when the Bush administration awarded "six Cellulosic Ethanol Plants up to $385 million in federal funding," Range Fuels (formerly Kergy Inc.) of Broomfield, Colorado, got up to $76 million. The proposed plant was to be constructed in Soperton (Treutlen County), Georgia.

Under the Obama administration, Range Fuels "secured a conditional commitment for a loan guarantee from the U.S. Department of Agriculture out of the 2008 Farm Bill worth $80 million to help the company finish construction of its commercial scale plant near Soperton, GA," reported Gigaom in January 2009. 

This $80 million USDA deal was later revealed by The Atlanta Journal-Constitution (ACJ), "that taxpayer money for Range Fuels was approved despite repeated warnings and strong opposition by some of the federal officials who vetted the project." ACJ goes on, "The documents obtained by the AJC show that three USDA officials who vetted the project approved it. Three opposed it. And three others who made critical comments had their opinions redacted."

By December 2011, Range Fuels had failed, of which Bloomberg News gave an account: "The closely held company, which counts Vinod Khosla, a venture capitalist and Sun Microsystems Inc. co-founder, as an initial investor, shuttered the factory in Soperton, Georgia, in January after not delivering on its promise to convert woodchips into ethanol, which was intended to help the U.S. become less dependent on foreign oil, " noting that "The ethanol project received $46.3 million of a $76 million grant from the Energy Department and half of an $80 million loan from the Agriculture Department." 

A month later, "The failed Range Fuels wood-to-ethanol factory in southeastern Georgia that sucked up $65 million in federal and state tax dollars [although my calculations place it closer to $92.5 million] was sold for pennies on the dollar to another bio-fuel maker with equally grand plans to transform the alternative energy world,” wrote Dan Chapman of The Atlanta Journal-Constitution.

Interesting enough, Range Fuels facility in Soperton, GA, was sold to the New Zealand-based LanzaTech for $5.1 million, of which LanzaTech’s main financial backer is none other than Vinod Khosla.

This revolving door green deal was documented at The Blaze on January 5, 2012, using detailed data of Mr. Chapman's reporting at where he goes on, "Although LanzaTech hasn’t been given the same type of loans Range Fuels received, the company is still getting $7 million from the U.S. departments of Energy and Transportation to assist in the development of alternative fuels."

Yet, I found that in December 2011, LanzaTech got a $3 million contract from the United States Federal Aviation Administration (FAA), through the Department of Transportation. And that LanzaTech has snagged more government contracts and funds from the Obama administration. In November 2010, LanzaTech entered into a research and development agreement with the DOE's America's Pacific Northwest National Laboratory (PNNL), of which it was reported by the Global Bioenergy Industry News, "The first phase of the work will take place over a year with equal funds from the DOE and LanzaTech."

In September 2011, The New England Herald announced, "LanzaTech will be eligible for "up to US$4 million to develop a cost-effective technology that converts biomass-derived ethanol into jet fuel using catalysts." This funding came from the DOE's Office of Energy Efficiency and Renewable Energy. "The DOE win is one of three similar small-scale projects to be funded up to US$12 million, and comes after LanzaTech picked up a contract [for an unknown amount of funds] with the US Department of Defense’s Advanced Research Agency in June to help develop drop-in bio-fuels for military aircraft," the Herald went on.


#10) Verenium:  DOE grant under a $40 million program from the Bush administration to support the development of small-scale cellulosic ethanol biorefinery plants for their project in Jennings, LA. / Approximately 12 million from Obama's DOE and the State of Florida 

Verenium, a Cambridge, Mass. biofuel maker, which as I mentioned earlier, is part of Gigaom.com 2007 "10 Khosla Biofuel Bets," which in 2008 snagged a large grant from the DOE through the Bush administration, "under a $40 million program to support the development of small-scale cellulosic ethanol biorefinery plants." Also, in April 2010 –– as an extension of the grant previously awarded in July of 2008 –– Verenium was awarded an additional $4.9 million from the DOE "to fund ongoing activities at its demonstration-scale facility in Jennings, Louisiana."

In 2008, according to VentureBeat.com, Verenium had "formed a partnership with oil giant British Petroleum and taken on a $90 million investment from the latter company to develop its cellulosic ethanol process."

Then in 2009, we find out that Verenium was awarded a $7 million grant from the State of Florida's Farm to Fuel initiative to build its first commercial-scale cellulosic ethanol plant.
But ever since they got all that cash, Verenium "managed to lose a lot less money in 2009 than in 2008. Verenium announced a net loss of $56.24 million in 2009, down from a staggering net loss of $189.00 million in 2008," documented Gigaom in March 2010. And at that time, "the company’s joint technology development deal with oil giant BP, called Galaxy Biofuels, is set to expire on April 1, 2010." Meanwhile in March of 2010, Verenium was "banking on" one of those DOE loan guarantees to help it build its now-delayed first commercial cellulosic ethanol plant."

No DOE loan yet, however in July 2010 BP came to the rescue, and announced that it "will acquire the cellulosic biofuels business of Verenium. The $98.3 million deal includes Verenium’s biofuel facilities in Jennings, LA and San Diego, CA. But it doesn’t include Verenium’s commercial enzyme business, and allows Verenium to develop its own “'lignocellulosic'” enzyme program," reported TechCrunch.com. This deal also included the fact that BP will own 100% of Galaxy Biofuels, mentioned above.

Two years later, BP scrapped their cellulosic ethanol plant plans, including the one in Florida, announcing that they "will instead focus its U.S. strategy on research and development as well as licensing its technology." SmartPlanet.com, conceded while opining on BP's Verenium $98.3 million bargain, that "the cellulosic ethanol business is a risky one that requires considerable investment." BP is hardly alone in its failure. Dozens of companies and startups have tried without success to produce a single commercially viable drop of the stuff."

In closing...

Risky, yet the Obama administration continues to gamble with tens of billions of taxpayer money in order save the planet. But for those of you that have been following "green corruption," you know that biofuel is only a fraction of the funds being dumped into so-called clean energy, which, in reality is used as political payback. Worse still, is the obvious crony capitalism and corporate welfare –– those with access and influence –– fueling this massive, expensive and deceptive scandal.

But what's a few billion amongst friends –– of other people's money –– anyhow?

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