Heavily subsidized Georgia ethanol plant closes

A Georgia biofuels company has drawn the attention of noted corporate-welfare critic Timothy Carney in the Washington Examiner:

To turn wood chips into ethanol fuel, George W. Bush’s Department of Energy in February 2007 announced a $76 million grant to Range Fuels for a cutting-edge refinery. A few months later, the refinery opened in the piney woods of Treutlen County, Ga., as the taxpayers of Georgia piled on another $6 million. In 2008, the ethanol plant was the first beneficiary of the Biorefinery Assistance Program, pocketing a loan for $80 million guaranteed by the U.S. taxpayers.

Last month, the refinery closed down, having failed to squeeze even a drop of ethanol out of its pine chips.

The Soperton, Ga., ethanol plant is another blemish on ethanol’s already tarnished image, but more broadly, it is cautionary tale about the elusive nature of “green jobs” and the folly of the government’s efforts at “investing” — as President Obama puts it — in new technologies.

Remember in last year’s gubernatorial campaign, when hopefuls from both major parties were throwing around the “Georgia is ‘the Saudi Arabia of pine trees’ ” line? It turns out that line of thinking is what led to the Soperton start-up, which was subsidized to the tune of $100 million, Carney writes:

Late in the Bush administration, corn-based ethanol started to get a bad rap. Corn for ethanol was crowding out other crops, and food prices were soaring. Mexicans rioted as tortilla prices spiked. So Bush started talking up “advanced biofuels” including “cellulosic ethanol”: roughly, ethanol distilled from plants that were not also food products. Bush mentioned wood chips and switchgrass in two consecutive State of the Union addresses.

Georgia politicians saw an opportunity here. “The Saudi Arabia of Pine Trees” became an unofficial state motto among Peach State politicians, and Gov. Sonny Perdue declared, “I’m confident the bioenergy industry and sector is going to be a cornerstone of the new Georgia.”

(snip)

Range Fuels is a politically connected, mostly through its founder, venture capitalist Vinod Khosla. Khosla has given more the $350,000 to federal candidates and campaign committees in recent years, a vast majority going to Democrats. … Despite these Democratic ties, it’s been Republicans who have lathered the subsidies on Soperton and celebrated them — Gov. Perdue, President Bush, Sens. Johnny Isakson and Saxby Chambliss.

Read the whole thing. As Carney argues, “Our ‘green’ subsidies could be postponing the day we get an alternative to foreign oil.”

One more note: Georgia Public Broadcasting last month reported that the Soperton plant did produce one batch of ethanol — specifically as a showcase to entice more investment dollars. Sounds like a job for private money, not more taxpayer funds.

39 comments Add your comment

Road Scholar

February 8th, 2011
12:45 pm

is this a part of the trickle down economics?

“subsidized to the tune of $100 million, ”

More like $162 Million!

quick work break

February 8th, 2011
1:06 pm

Pursuit of Ethenol was DOA–more subsidy (welfare) waste.
But the pursuit of green energy alternatives is definitely not folly. The alternative is our status quo: slaves to Islamic country’s oil production, which will only skyrocket in price as Chinese and Indian consumers quench their thirst for it.

Churchill's MOM

February 8th, 2011
1:22 pm

Kyle, I understand that Saxby is no longer the senior Republican on the Ag. Committee. Has his lobbyist son Bo quit his job as a lobbyist for the Chicago Merc. Exchange, 1 of the main beneficiaries of the taxpayer rip off ethanol program?

By the way 1 of the Atlanta stations did a big program about how E85 would burn up our car engine.

carlosgvv

February 8th, 2011
1:49 pm

This is just another case of business giving money to the politicans in return for political favors. I would love to be able to follow the money on this and see in whose pockets it finally wound up.

southpaw

February 8th, 2011
1:57 pm

I thought ethanol came from corn, and wood was used to make methanol. No methanol from the pine chips either?

nels

February 8th, 2011
2:03 pm

Your last topic lasted just a day. It was a great topic. Ethanol fuel, I have to research it, I donot just put out a lot of words. The only future for energy is electricity from wind power.

buck@gon

February 8th, 2011
2:07 pm

To Obama and lefties, the rhetorical war is already over. THEY know what is best, technology, engineers, investors, scientific progress and businessmen be damned if they can’t make it work. Lefties are already in their happy place, which is not necessarily green jobs, but the termination of regular ones. This is the vision of liberals.

HDB

February 8th, 2011
2:18 pm

buck@gon
February 8th, 2011
2:07 pm

Lest you forget that it was the technologists — R&D — that generated the ideas that businessmen used to create he products that summarily come to the marketplace. It’s not a separate effort…but a cooperrative effort that the President is seeking. Note how the Wright Brothers made the technology work….then look at how the marketplace moved after the practicality of the airplane became evident! Same thing will happen again!!

jconservative

February 8th, 2011
2:18 pm

Nice column. Another nail in the myth that Republicans are Conservative.

1961_Boomer

February 8th, 2011
2:35 pm

There is a grey line between investing in new technologies that may someday yield fruit, and investing in a glossy brochure. When government is quick and eager to throw money at something… and is not accountable to anyone for that money… there is a higher percentage of glossy brochures in the mix.

quick work break

February 8th, 2011
4:03 pm

I remember in the early part of W’s first term, he promoted investing in Hydrogen-powered autos. But that didn’t go anywhere and only a few other companies put token investment in R&D (BMW & Honda off the top of my head). I have to wonder if the US could have taken a lead in SOMEthing.

Not So Casual Observer

February 8th, 2011
4:11 pm

qwb@1:06,

You wrote: “slaves to Islamic country’s oil production”…

We are slaves only due to inept leadership in Washington.

Bill Clinton refused to build refineries “because ten years would pass before they would be on line”, well Mr. Clinton that was 15 years ago.

Liberals accused George W. Bush of invading Iraq for their oil, well now that is obviously untrue and we pay $3+ for gasoline.

The US has more than enough oil to last our country for centuries, yet we continue to import foreign oil. CORRUPTION in Congress and the White House is the problem.

Now our POTUS bans offshore drilling and simply hands control of our energy destiny to his buddies in the Middle East.

As for electricity, I urge you to investigate “Solar Highways”.

CJ

February 8th, 2011
4:15 pm

Timothy Carney wrote, “The Soperton, Ga., ethanol plant is..a cautionary tale about the elusive nature of “green jobs” and the folly of the government’s efforts at “investing” — as President Obama puts it — in new technologies.

Frustrating.

First, Carney makes a silly assertion in this quote. The closing of a refinery isn’t a cautionary tale about green jobs or the “folly” of investing in new technologies any more than the failure of one company or location in any industry is a cautionary tale about the “folly” of investing in that company’s industry. As we all know, businesses sometimes fail. In most cases, such failures say as much or more about the management of the business than it says about the industry that the business was in.

Second, anybody who doesn’t understand the difference between spending and investing has no business writing a column in a major publication. Putting quotation marks around the word investing, as Timothy Carney does in his piece above, doesn’t change the fact investing in clean technologies is exactly that–committing money in order to get a financial return. What would American businesses’ chance of success have been without previous government investments in roads, ports, railroads, levies, air traffic control systems, defense, R&D, and on and on?

Finally, if Carney is a noted corporate welfare critic, then is it safe to assume that he also opposes all agricultural subsidies for farmers producing ethanol from corn and that he opposes subsidies for oil companies as well, including infrastructure and defense spending that feeds our addiction to oil? I hope so. Then he’d be one of the few in the punditry business that we could count on for consistency.

JR

February 8th, 2011
4:16 pm

give 80 million more , they can stay open another year.

quick work break

February 8th, 2011
4:30 pm

NSCO: You’re deflecting the issue of imported oil to the number of refineries? OK. How many refineries were built in the 8 years under W? Why was it Bill Clinton’s responsibility? In fact, the Bush administration approved 33 takeovers/mergers of refineries, cutting capacity. Why aren’t you blaming Exxon and others for not building them? (and your second to last statement sent you in the fringe)

Slammy Wybring

February 8th, 2011
4:35 pm

This is the type thing that will someday lead to revolt.

Dusty

February 8th, 2011
4:52 pm

Soes anyone know why the plant at Soperton did not produce ethanol? What was wrong? There had to be some research behind this to make so many people believe it would work. Who did the research? Why are they not being investigated? Was the whole idea of pine chips wrong or was the process wrong? If AJC likes to reseach expensive boondoggles, here is a good one that might lead to better ideas. We still have plenty of pine trees if not plenty of money.

Not So Casual Observer

February 8th, 2011
5:06 pm

qwb,

I am not in the fringe and the quote from Clinton was simply an example of the government deflecting criticism of their ineptitude with an inane statement.

Exxon, along with other oil companies, is unable to forge through the permitting process as a result of the undue influence the environmental lobby has over the Democrat party in particular and the government as a whole.

If you think the comment on Obama’s ban is in the “fringe” then you are not paying attention and certainly are not aware the Gulf spill was about failure of leadership on the part of all involved and not anything about the failure of the drilling process. The ban is a symbolic gesture by a beholden POTUS to the environmental lobby and a pure GIFT to his pals in the Middle East.

I am not sure of the exact time span but I do not believe a new refinery has opened since the 1970’s. The government argument of “not enough refineries” is a fact simply due to the government unwillingness to allow construction.

You should study the “backroom” deals made with OPEC by every President since Nixon. Carter is nothing more than a shill for his financial backers at OPEC and throughout the Middle East. Clinton and his wife are nothing more than the same as a result of the tens of millions of dollars they have received from those Middle East sources.

George H.W. Bush Chairs a foundation whose largest contributor is George Soros and from said foundation his son W and Cheney are supoorted.

Please note I opened with INEPT leadership, not Dem or Rep leadership, but then you must be one of the Obamabots to read criticism of only the Left into my comments.

WHY do YOU not address the real issue of the drilling ban and not refining our own oil rather than foreign oil?

Obama has as his overriding goal a destruction of the US economy, and the dollar, in order to create yet another crisis to allow a further restriction on our freedoms and forced servitude to the federal government. Only Obama then can step forward and save us from bread lines and tents. If you do not believe then you should read the words in his books and speeches and then decide for yourself if the monetizing of debt, continued bailouts and the BAN ON DRILLING can possibly end any other way.

When you are paying $5+ plus for gasoline this summer, $10 dollars for a 64oz bottle of orange juice and all the other food prices are though the roof then ask yourself what the benefit was of the ban on drilling and the other destructive programs of this administration.

AmVet

February 8th, 2011
5:13 pm

Heavily subsidized Georgia ethanol plant closes.

Countless more heavily subsidized Georgia plants remain open.

Welcome to the Corporatocracy.

JF McNamara

February 8th, 2011
5:24 pm

Was the money for technology advancement or to produce an existing concept? If this was an experimental facility, I’m fine with the failure. If this is the new paradaigm, are we going to gripe about every defense program that doesn’t work?

If its a failure of management, then this was indeed a political debacle and waste of taxpayer funds and we need to be better about fund allocation.

Intown

February 8th, 2011
5:25 pm

Kyle: this left-of-center commenter agrees with you. Corn based ethanol is a joke. It is basically as scam to funnel public money to farmers and speculators and those with the best lobbying efforts. It is not the answer to our energy future and siphons off valuable tax dollars from more viable alternatives. But, please do not use the corn-ethanol scam to drag down public money toward alternative fuels. If only an independent panel of real experts could decide where the money goes to catalyze certain alternative fuel industries as opposed to who wins the lobbying battle. We’d all be better off for it in the long run.

Also, if Congress could be allowed to create the environment where economic incentives favored funding alternative fuels (aka – climate change bill setting up carbon caps and a carbon credit system) we might be better off.

If only conservatives either believed in global warming enough to do something about it or hated funding islamofascists and socialist dictators with every time they filled their SUVs with fuel more than they hated liberals we’d all be better off in the long run.

Intown

February 8th, 2011
5:27 pm

Kingfish

February 8th, 2011
5:34 pm

Should have been making Moonshine!!!!

Winfield J. Abbe

February 8th, 2011
5:40 pm

This is a natural consequence of what happens when “higher edcation” is really nothing but indoctrination without developing any skills of critical thinking and reason. College graduates today have been so indoctrinated they simply believe what the mob tells them is true, without evaluating with a functioning brain if it is indeed true. This is also a result of the advertising mentality which pervades America. After all, if you run an advertisement to sell a particular product, are you going to
also mention any negative facts about that product? Discovering the truth is not an easy task in America today and most college graduates are either too ignorant or prejudiced or lazy or stupid to discover it.

Hillbilly Deluxe

February 8th, 2011
6:01 pm

By late 1944, the Japanese navy commenced a project to manufacture aviation fuel from pine tree roots. “Two hundred pine roots will keep an airplane in the sky for one hour,” said a Navy spokesman. The Japanese navy distributed over 36,000 kettles and stills, in which countless pine tree roots met their fate. Many a hillside of Japan was utterly denuded of trees. But each kettle or still could produce only about 4 gallons of raw product, and even that required significant treatment to upgrade to anything approaching usable fuel. Compounding the problem, each still required its own fuel supply, and this exacerbated an already severe fuel shortage in Japan. By one estimate, 400,000 Japanese worked full-time in order to support a dispersed, inefficient industrial base that could produce all of about 2,500 barrels of pine oil per day. In the end, a mere 3,000 barrels of “pine root” aviation fuel were ultimately delivered to the Japanese navy. And the pine derivative gummed up aviation engines after just a few hours of use. The entire project was a massive waste.

http://navy.memorieshop.com/Stories/Lack-of-Oil.html

quick work break

February 8th, 2011
6:21 pm

Let’s see, NSCO: Single out Bill Clinton, criticize (apparently all) liberals who thought Bush went to war for oil (which I don’t believe), saying Obama “simply hands control of our energy destiny to his buddies in the Middle East” (truly fringe and false given his ongoing calls for independence), write “Democrat party”, “Obama has as his overriding goal a destruction of the US economy” (my eyes rolled so hard at that whole paragraph they now hurt), call me an “Obamabot” (hee).

I am definitely ALL for new refineries. But you simplify the complexity too much. You’re right about government unwillingness, but that includes state and local governments, with all their constituents saying Not In My Back Yard! They need to be near the shore where oil is imported to be efficient, but we all know how valuable that property is to real estate owners and all residents.

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...

February 8th, 2011
6:52 pm

CNN: 51% Say They Will Definitely or Probably Not Vote for Obama

See, people do learn from their mistakes…

[...] This post was mentioned on Twitter by Gas Diesel Prices, infotectravel1. infotectravel1 said: #ITTN : Heavily subsidized Georgia ethanol plant closes – Atlanta Journal Constitution (blog) http://bit.ly/h20dU6 [...]

Ragnar Danneskjöld

February 8th, 2011
7:50 pm

jconservative spoke my own thoughts @ 2:18. There is a solid, Georgian reason I do not call myself a Republican.

Ethanol is hardly "green"

February 9th, 2011
6:33 am

Except for all the green it has soaked up. Delivers less power per gallon, is heavily subsidized by government (as payment to companies and growers of corn), and then when the Brazilians more effectively develop sugar based vs. corn fuel, we tariff that? It’s all a political boondogle and a great example of what happens when the government tries to steer the economy with its great logic. Oh yeah, it’s also driven up the price of my corn on the cob! (the real travesty in all this)

bob

February 9th, 2011
7:35 am

Quick work break, Clinton did refuse to drill in ANWAR based on the fact that it would take ten years to get results. Therefore, lets not look at any tech that does not produce instant results.

Alex Kovnat

February 9th, 2011
8:29 am

I can see a point in not pouring the taxpayer’s dollars into a facility which for some reason or another doesn’t work. We taxpayers are burdened with federal debt too much as it is. But I see no reason to celebrate or applaud the failure of the Georgia facility. As the holder of an M.S. degree in Automotive Engineering (Lawrence Technological University in Southfield, Michigan, 2008), I like the idea of ethanol as an automotive fuel. It has an antiknock (octane) rating of over 100, and doesn’t cause problems such as corrosion as much as methanol, which has also been extensively studied as an alternative fuel.

Unfortunately, the only way to make ethanol form biomass is via glucose fermentation, and the only convenient source for that here in the USA is by breaking down cornstarch. The Georgia experiment that just closed, was an attempt to break down cellulose from sources like pine trees, into glucose for subsequent fermentation. It is a frustration to me that it didn’t work out.

If the problem of carbon dioxide buildup in our atmosphere is so great as to justify ever more draconian fuel economy requirements for cars, we can reduce our nation’s discharge of fossil fuel CO2 by taking biomass (pine trees, leaves, wood waste) and burning it in properly designed power plants to generate electricity. Since half of our electric power comes from burning coal, we can always use more non-fossil fuel electricity. Burning biomass is one good way to bring that about.

But I hope research on how to process cellulose into ethanol, will in the future bear fruit.

Not So Casual Observer

February 9th, 2011
9:10 am

qwb,

You listen to Obama’s words NOW as POTUS but ignore all he has written over the years. Of course Obama calls for independence, as does every politician, but his actions say otherwise.

Your reading comprehension skills need a little work. “The quote from Clinton was simply an example of the government deflecting criticism of their ineptitude with an inane statement”, yet this is, to you, singling out Bill Clinton.

Study Cloward and Piven and then compare the actions and policies of Obama and the Left Presidents who preceded him. Destruction of the US economy is absolutely the goal of Obama and likely Bush as well. The goal is a one-world government and currency.

I am through; you are clearly living in a la-la land devoid of the ability to see the forest for the trees.

jm

February 9th, 2011
9:22 am

Green (and fossil) fuel subsidies should stop. Corn based ethanol is the worst offender. Solar comes up a close second.

I think some subsidies for wind make sense simply because it is so close to being economical anyway…. but the rest of it is garbage.

ronald

February 9th, 2011
9:45 am

i cannot help but remember all the college kids who voted for Obama because of his campaign promise…and I quote “to create millions and millions of new green jobs.” What a laugher…..

Claude

February 9th, 2011
10:12 pm

Very interesting but why do we need to read the Washington Examiner to find out about a Georgia-based fiasco? Why didn’t the AJC report on this?

Port O'John

February 10th, 2011
12:33 pm

And the liar, liar pants on fire award goes to Not So Casual Observer for this gem:

“Bill Clinton refused to build refineries “because ten years would pass before they would be on line”, well Mr. Clinton that was 15 years ago.”

Repeating republican and Fox News talking points does not make them true. During the Clinton administration only one application for a new refinery was submitted to the administration and that one application was approved.

Repblicans keep saying that Clinton refused to permit refineries — but the fact is that they didn’t need new refineries to meet demand. If demand went up, they just charged more for gas and then stepped up production. When demand went down, they dialed back on production.

Carol Browner of EPA testified about this several times to the GOP Congress — but go ahead and believe the lie. It says a lot about you.

Dubliner

February 10th, 2011
2:16 pm

Whether your Republican, Democrat or independent, get use to paying for the the state and federal hand outs to companies like Range Fuels. Most of the establishment politicos of both parties are on the take when it comes to this kind cronyism at the local, state and federal levels.

Dorkbeavis

February 13th, 2011
4:57 pm

Ya’ll need to check out: http://www.emeraldplantations.com/
Let’s not let that refinery rot after so much money was invested. The MegaFlora Tree is the only real answer for providing cellulosic ethanol, or, better yet, biobutanol (which is more energy efficient). Three basic attributes must be present for energy to be feasibly extracted from wood chips. The tree must have a short rotation (grows really fast), is able to continually grow again quickly from it’s stump, and be of high density. There are other important factors that make the MegaFlora Tree the preferred choice, but these three qualities already put it well ahead of any other wannabes. Vinod Khosla offered MegaFlora Tree creator Ray Allen an ungodly amount of cash, but Mr. Allen was only interested in a partnership – not wanting to relinquish control of his product. MegaFlora is being purchased by the Chinese and the Vietnamese (remediation of Agent Orange soil destruction – yet another unmatched quality). This is good, but we need to make sure it is planted on U.S. soil. Hey, if for nothing else, the E.P.A. has designated MegaFlora as a major carbon sequester.