Here We Go Again


Detroit – In 2006, Michigan Biodiesel received a ten-year, tax-free designation from the state of Michigan as Gov. Jennifer Granholm hailed biofuels as the key to breaking America’s dependence on foreign oil.

“This plant in Bangor is an important step in reaching our goal of becoming the nation’s alternative energy hub, strengthening our economy, and creating jobs for Michigan citizens,” thrilled Granholm.

Three years later, Michigan Biodiesel isn’t producing a drop of biofuel. The facility is a symbol of the industry’s international collapse — and of government’s arrogant belief that it can create markets for new fuels with tax breaks and green happy talk. The plant continues to receive special tax treatment even as it stays alive by producing products that have nothing to do with the fuel products it receives tax breaks for.

“We’re not a biodiesel plant anymore,” said John Oakley, CEO of Michigan BioDiesel. “We’re more of a chemical plant.”

A lesson learned? Naw.

This week, Michigan’s legislature will pass $100 million in tax credits for Texas-based Xtreme Power to make advanced batteries for electric cars in Wixom, Mich. “We’ve been really focused on adding this sector,” Governor Granholm told the press (obviously assuming it has the collective memory of a turnip), hailing it as the crown jewel of Michigan’s new economy. “It would be another feather in our cap of establishing Michigan as the battery capital of North America.”

Granholm says the Wixom energy park would create 4,000 jobs. Of course, when Michigan Biodiesel opened, state officials predicted that by March 2007 the plant would be producing 8.5 million gallons of biodiesel fuel a year.

Like their biodiesel cousins, Xtreme is entirely dependent on the public teat, saying it will only commit to the plant “if state tax incentives and federal loans are approved.” Some business model.

Meanwhile, Michigan’s biofuel industry — yesterday’s golden child — is back at the trough saying that it needs new government subsidies to hold up its promise as the fuel of the future. This time, they say a mandate that state vehicles use its product is necessary. “If the state government isn’t going to be interested in biodiesel, nobody else is either,” says one biodiesel producer.

Fool me once, shame on you. Fool me twice . . .


Subscribe to National Review