You can’t make this up:
Energy Secretary Steven Chu also announced the DOE has offered a $133.9 million loan guarantee to Abengoa Bioenergy Biomass of Kansas LLC (ABBK). ABBK, which is a subsidiary of Abengoa Bioenergy US Holding, Inc., the U.S. division of global energy giant Abengoa’s (MCE: ABG) biofuel development arm, will use the funds to build a commercial-scale cellulosic ethanol plant in Hugoton, Kansas.
When construction is complete, the facility will convert 300,000 tons of corn stalks and leaves into an estimated 23 million gallons of ethanol a year. In addition to creating alternative fuel, the facility will also produce its own electricity. Using unconverted biomass the plant is expected to generate 20 MW of renewable electricity.
Abengoa had revenues of €5.6 billion in 2010. On top of what’s mentioned above, Abengoa is the recipient of over $2.5 billion in other guarantees. This is about using taxpayer dollars to finance risky investments in the hope that jobs are created. How many jobs? According to the DOE, this $2.6+ billion will create 195 permanent jobs. That’s it.
This is from the DOE announcement of the Abengoa plant:
The Department of Energy’s Loan Programs Office (LPO) administers three separate programs: the Title XVII Section 1703 and Section 1705 loan guarantee programs, and the Advanced Technology Vehicles Manufacturing (ATVM) loan program. The loan guarantee programs support the deployment of commercial and innovative technologies that avoid, reduce, or sequester greenhouse gas emissions, while ATVM supports the development of advanced vehicle technologies. To date, LPO has issued loans, loan guarantees or offered conditional commitments for loan guarantees totaling nearly $40 billion to support 42 clean energy projects across the U.S. DOE has issued conditional commitments or loan guarantees to support numerous projects, including several of the world’s largest solar generation facilities, three geothermal projects, the world’s largest wind farm, and the nation’s first new nuclear power plant in three decades. For more information, please visit the Loan Programs Office website.
$40 billion is currently committed to this program and no real job creation as a result. This isn’t Keynesian economics. This is Marx — as in Marx Brothers economics.
The cellulosic ethanol is not a bad idea in itself. Hopefully the residue can, as with corn ethanol production, be used in animal feed reducing the loss to food production. However, I wonder how much of that 'unconverted' biomass would have gone into animal feed (silage, etc.) as I presume they will be burning it and there will be nothing but ash at the end?
Taxpayer funding/loan guarantees are of course the ultimate sticking point here. In spite of the possible negative impact on the food chain, if it could stand on it's own economically it would be just another business moving into a new area. With the taxpayer money included it becomes another example of the administration's stubborn refusal to face the reality of the 'green economies' failure.
Reply to this commentLinkReport AbuseTraditionally, corn stalks are returned to the earth, grinded down in the winter after they have dried to prevent soil erosion and return nutrients. Then, at least every third year, those fields are planted with soybeans or other sileage in crop rotation to remove excess nitrogen.
Reply to this commentLinkReport AbuseUmmm, Secretary Chu? Not to throw your own words back in your face much, but would you mind terribly if we go back to wasting our own money? It's a lot better than having you take it from us and then forcing us to watch you throw it away.
Reply to this commentLinkReport AbuseMarx Brothers Economics indeed. Groucho once said "I wouldn't join any club that would have me as a member." With these clowns its should be "I'll only invest in a business if no private investor in their right mind will invest."
Reply to this commentLinkReport AbuseI'm glad to see that the green energy movement is creating incentives to grow more corn in western Kansas. Corn requires a lot of water, something there isn't a lot of in the western part of the state. Oh well, I guess this will just lead to us more quickly draining the Ogallala aquifer - something the greens are also against.
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