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“Green” Energy: The Color of Money

15 Tuesday Dec 2015

Posted by Belinda Silva in Agency, Congress, Energy & Environment, EPA, Government, Government Accountability Office (GAO), Office of Inspector General (OIG), Renewable Fuels Mandates, Uncategorized

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Abengoa, Biofuels, Ethanol, GAO, Government Waste, Green Energy, OIG, Renewable Portfolio Standard (RPS), RFS, Subsidies

In light of the recent legal filing for creditor protection by Spain-based, Abengoa, Inc., the viability of the Renewable Fuel Standard (RFS) is getting appropriate scrutiny and reconsideration. Through that program, the giant green-energy company received billions of U.S. taxpayer dollars in grants, loans, and subsidies. Still, last week they were forced to close their cellulosic ethanol facility in Hugoton, Kansas. The court filing for creditor protection came the day before Thanksgiving and within a week, the Kansas employees received layoff notices while many creditors received nothing.

Economic predictions suggest taxpayer losses could amount to five-times that of the 2011 Solyndra collapse. For local farmers, $5 million in unpaid, delivered product prompted their cooperative (CHS, Inc.), to file a lawsuit just two days prior to Abengoa filing for protection in a Spanish court. While some articles and blogs appear to revel in an Obama administration failure, others denounce the fact-based reporting of Abengoa’s troubles as a hit-piece against green-energy. Neither position is accurate, valid or productive.

From a free-market, smaller government perspective, the issue is not green-energy versus traditional energy sources. There is no denying the world would be a better place if everyone had access to affordable, renewable clean energy. But, consider the financial sink-hole that is the Hugoton plant and contrast that with the stunning announcement that it has sold zero gallons of cellulosic ethanol, and it is apparent that to some the label of “green” energy denotes big money as opposed to an emphasis on low environmental impact.

It should be noted that Abengoa’s demise was not a shock to everyone. Various sources have been sounding the warning sirens for years.

  • A 2009 Government Accountability Office (GAO) report warned of multiple challenges to RFS’s increasing volumes of biofuels, particularly cellulosic.
  • November 2011: Senator Jeff Sessions of the Senate Budget Committee specifically requested all documents relating to Abengoa and other solar companies from the Department of Interior (DOI).
  • 2012 GAO letter to The Honorable Dianne Feinstein, and House & Senate members of the Subcommittee on Energy and Water Development, Committee on Appropriations stating it was the sixth time GAO had reported its concerns about (DOE) loan guarantees for biofuels.
  • March 2012 GAO report to Congress restating concerns about the lack of adequate review and oversight by DOE and its $30 billion loan program, detailing Abengoa as the recipient of $1.2 billion.
  • March 2012: U.S. House Oversight Committee report specifically finds loans and resources granted to Abengoa, created excessive risk. The report reveals that “Abengoa managed to obtain a DOE loan commitment for the lowest rated project across the entire DOE Junk portfolio — which received an extraordinarily low CCC rating and was still approved by DOE for a direct loan to the project. This overinvestment in this single firm will likely cause substantial harm to the taxpayer.”
  • May 29, 2012: Letter from the U.S. House Oversight Committee threatened the Department of Interior (DOI) with “compulsory action” if they failed to release requested documents related to Abengoa and other solar companies. The Committee stated appearance of preferential treatment in taxpayer-funded loan guarantees.
  • April 30, 2013: Office of Inspector General (OIG) reported Abengoa of received $2 million dollars through The American Recovery and Reinvestment Act of 2009 (Recovery Act) for a project completed before the passing of the law.
  • May 1, 2014: GAO warned a significant threat to taxpayers in the DOE biofuels loan programs due to poor oversight and deviation from monitoring and qualifying procedures that, “pose an unacceptable risk of default.”

Highlighted above are but a few examples of serious problems with the government’s renewable fuels program. So, as presented, critics are not opposed to the concept of green energy but see the RFS as a seriously flawed mechanism to that end. The wasting of billions of dollars on infrastructure for a product that is not market ready could be better served funding advancing research projects in laboratories. The simple concept of putting the cart before the horse comes to mind. It is not Capitalism when the Federal government, through sheer financial force develops unsustainable, artificial industries.

Even Abengoa knew the Kansas plant would not be self-sustainable. In a 2014 report to DOE, the company presented their risk mitigation plan. The list included a push for the development of “energy crops”, continued dependence on the RFS to maintain a premium for ethanol, and to encourage the USDA to allow farmers to produce cellulosic biofuel crops on Conservation Reserve Program (CRP) lands.

The Abengoa plan does not reflect the goal of eventual self-sufficiency, but instead, details what others may contribute to help restructure market fundamentals to suit Abengoa’s projected goals. That is not capitalism. We have limited lands for food production, and the thought of more farmland to biofuel production is alarming. Also, the move would defeat one of the RFS stated goals of developing renewable energy by utilizing material currently identified as low valued waste or by-products.

To be clear, green-energy, as in renewable, eco-friendly, sustainable, and affordable, is a national security and humanitarian issue. There is little debate about the need to pursue that end. But, the government mandates and financial handouts created extremely provocative incentives to abuse the U.S. taxpayers. Through big dollar, experimental programs that ignore market impact and economic viability, coupled with extremely lax oversight, the term “green-energy” takes on a different meaning.

– See more at: http://environmentblog.ncpa.org/green-energy-the-color-of-money/#sthash.SjW9Htzf.dpuf

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Congressional Request leads to Scathing Review of the EPA

22 Thursday Oct 2015

Posted by Belinda Silva in Agency, Energy & Environment, EPA, Government Accountability Office (GAO), Uncategorized

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Belinda Silva, Environment, EPA, GAO, Government Accountability Office, Regulatory

by: Belinda Silva

Businesses, landowners, and farmers know the feeling of dread that comes with hearing the words “not in compliance” from the U.S. Environmental Protection Agency (EPA). The EPA has earned the reputation of delivering heavy-handed enforcement actions and exorbitant punitive penalties. The agency’s authoritarian over-reach is near legendary, earning them the moniker “rogue agency”. Even the U.S. Supreme Court gave the EPA a dressing-down stating they commonly strong-arm regulated parties into “voluntary compliance” without the opportunity for judicial review. The EPA has taken a firm stance that the rules are published, and therefore, noncompliance is not excusable.

Yet, a congressionally requested federal review of the EPA found the agency regularly ignores rules that pertain to its own operating procedures as dictated by law. In fact, a Government Accountability Office (GAO) report says the EPA disregards the law in its reporting to congressional inquiries. According to the GAO, the EPA’s Science Advisory Board (SAB) is not in compliance with the long-standing Environmental Research, Development and Demonstration Authorization Act of 1978 (ERDDAA). As well, the agency’s Clean Air Scientific Advisory Committee (CASAC) fails to follow legal requirements of the Clean Air Act.

The GAO investigation revealed agency staffers routinely judge whether a congressional request is a policy driven question or requires a science-based response. As a result, answers to lawmaker’s queries often have no scientific basis in fact. Also, the agency failed to perform regular five-year impact reviews of national ambient air quality standards (NAAQS). Under the Clean Air Act, CASAC is to review and report “any adverse public health, welfare, social, economic, or energy effects” resulting from regulations and strategies of NAAQS. According to the GAO, the EPA “has never” instructed CASAC to comply with the federal requirement to review and report.

Members of Congress and the GAO have voiced similar concerns regarding EPA conduct and manner of operational performance.

  • Regularly ignores epidemiological evidence that dispels, counters, or invalidates their decisions.
  • Ignores their own scientific panels to format or propel false alarms.
  • Uses federal law, such as the Clean Water Act, to regulate private lands through regulatory “takings” of rights.
  • Consistently exceeds its legislative authority forcing businesses, municipalities, and citizens to challenge regulations through the court system.
  • Abuses authority in “policing” of private property activity through notoriously heavy fines.
  • Habitually practices “moving the goal” tactics to hamper businesses and industries efforts to remain operationally compliant.

The agency’s standard operating procedures often are in defiance of the law. Also, the arbitrary use of selected and contrived science to establish environmental regulation is a serious threat to our national wellbeing and jeopardizes public health, general welfare, socio-economic conditions and our environment.

– See more at: http://environmentblog.ncpa.org/congressional-request-leads-to-scathing-review-of-the-epa/#sthash.eyxYrxSY.dpuf

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