Biofuels Bailouts

by Paul Chesser, Heartland Institute Correspondent on May 15, 2009

Never mind the allegedly detrimental effect biofuels have by increasing greenhouse gas emissions and therefore global warming — the Obama Administration will continue to blast CO2 in the atmosphere by burning vegetation. It’s not a surprise as the president talked about it during his campaign, but now the ugly details are coming out and the new subsidies are being unveiled. From a May 5 White House press release:

President Obama today announced steps to further his Administration’s commitment to advance biofuels research and commercialization.  Specifically, he signed a Presidential Directive establishing a Biofuels Interagency Working Group, announced additional Recovery Act funds for renewable fuel projects, and also announced his Administration’s notice of a Proposed Rulemaking on the Renewable Fuel Standard.

The BIWG is to be co-chaired by Obama’s superheroic force of top eco-bureaucrats: Agriculture Secretary Tom Vilsack, Energy Secretary Steven Chu, and EPA Administrator Lisa Jackson. Part of their responsibilities will be to:

  • Immediately begin restructuring existing investments in renewable fuels as needed to preserve industry employment; and
  • Develop a comprehensive approach to accelerating the investment in and production of American biofuels and reducing our dependence on fossil fuels.

How is this plan to reward/subsidize failure and nonproductive jobs to be accomplished? Via bailout funds, of course:

The President also announced that $786.5 million from the American Recovery and Reinvestment Act will be provided to accelerate advanced biofuels research and development and expand commercialization by providing additional funding for commercial biorefineries.

So thanks to taxpayers, you can add bailouts for projects like this to the “rescued” banks, insurance companies and automakers:

Auction of F&S Oil’s biodiesel plant attracts just one bid

CHESHIRE, Conn. — A New Hampshire-based wholesale petroleum distributor submitted the only bid Thursday for F&S Oil’s biofuel production facility, but the total amount of the bid is uncertain and the bidding process remains open.

Frank Day, of Total Energy Solutions of Portsmouth, N.H., offered $75,000 for the entire plant during Thursday’s auction…

The bid was significantly lower than the $4 million to $12 million value suggested by a consultant…

The auctions, which attracted about two dozen people, were conducted by Thomas Gagliardi Jr., president of Thomas Industries of Guilford. Carlton E. Helming, the court-appointed receiver for F&S Oil, said he was “very disappointed” with the bid….

Or this:

Problem-plagued Athens Biodiesel (in Alabama) is facing foreclosure on its local operation by a California lending institution. The News Courier has run foreclosure notices on March 31, April 7 and Tuesday stating that the Temecula Valley Bank in Temecula, Calif., has instituted foreclosure proceedings on a loan taken out July 13, 2007.

In early March The News Courier reported Athens Utilities had cut electrical service to the plant off East Airport Road on the site of the old Knight Lumber Co. for non-payment of bills. Melvin Kilgore, owner of Athens Biodiesel, also acknowledged that he was a pay cycle behind in his payroll of about nine remaining employees….

Or this:

VeraSun auction of U.S. BioEnergy planned by March

NEW YORK, Jan 16 (Reuters) – Ethanol maker VeraSun Energy Corp received interim approval from a Delaware bankruptcy court judge to auction most of its U.S. BioEnergy ethanol plants by the end of March, according to court documents.

VeraSun, which filed for bankruptcy in October due to high corn prices, weak ethanol prices and a lack of access to financing, has had the U.S. BioEnergy plants idled since last year. It bought the plants for less than $700 million in 2008….

Should I keep Googling? These aren’t hard to find…perhaps some of the cap-and-tax carbon credits can also help bail these folks out.

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