|Algae farm (claytonbodiecornell.greenoptions.com)|
Here,with a little highlighting from me, the "Algal Biomass Organization" offers up praise for an "investment" of $510 million from the USDA, DOE, and Navy (what does it matter whose budget the money comes from? It is all taxpayer money, extracted from the pockets of people who work for a living) into "biofuels" at "ABO Responds to USDA/DOE/Navy Biofuels Investment Promise" from Algae Industry Magazine:
The Algal Biomass Organization has voiced its opinion of the US government’s recently announced $510 million biofuels investment commitment over the next three years. Following is their statement: Late last month, three federal departments came together to launch an ambitious effort to commercialize next generation biofuels. The USDA, DOE and Navy announced an historic commitment to directly invest up to $510 million to retrofit and/or build facilities capable of producing drop-in replacement fuels. Funds from the private sector will be matched one-to-one, bringing the total potential available capital to more than $1 billion.Let's take a look at the highlighted portions.
This announcement is a significant boon to our industry and comes at a time where several of our member companies are moving from lab to pilot, and from pilot to commercial production of algae-based drop-in fuels.
We’ve always praised the US military for its leadership in procuring and testing biofuels—their support has shown that domestic, sustainable fuels can perform at the highest levels of use. But until now, direct investment in companies or projects was not an option.
These three departments have rightly determined that it’s not going to be enough to just be a customer. They understand that the capital costs of facility construction are too high, and not the right model for venture capital, and the technologies still so new as to preclude traditional bank financing.
Let’s be clear – this is not a feel-good publicity stunt. This is an investment in the long-term national security and economic health of our country. As Navy Secretary Ray Mabus said: “America’s long-term national security depends on a commercially viable domestic biofuels market that will benefit taxpayers while simultaneously giving Sailors and Marines tactical and strategic advantages.”
What was most inspiring to me, however, was one aspect of the partnership that went under reported—where the funds were sourced. It turns out that no new authorizations are required (no surprise, given the current climate surrounding our national debt) because the funds have been pulled from elsewhere in the budget.
That means, for the first time in what seems like a long time, that advanced biofuels took precedence for limited funds. From the Obama administration to the departments of the Navy, Agriculture and Energy, the importance of accelerating commercialization of advanced biofuels is now a national priority.
It’s now up to our industry to take advantage of this opportunity and show what we can do.
First, "three federal departments came together to launch an ambitious effort to commercialize next generation biofuels . . ." Uh, pumping federal taxpayer money into a project so iffy that its ". . . capital costs of facility construction are too high, and not the right model for venture capital, and the technologies still so new as to preclude traditional bank financing" means that taxpayers are at risk $510 million on something no rational commercial enterprise would fund (but for, apparently, the government decision to pony up money).
How does the government justify this? The Wall Street Journal editorial of 10 October 2011 has it just right, in describing the "Solyndra economy" mindset of this administration:
And there you have America's Solyndra economy, as the White House understands it: Washington allocates capital, and taxpayers pick up the tab if those choices go bust. Through this political lens, the August bankruptcy of the Fremont, Calif. company was a necessary casualty in the greater campaign to steer the U.S. economy toward Mr. Obama's noble goals. Private competition that winnows out losers is so yesterday.
Politics and a disdain of free markets triumphs economic sense. After all, throwing a big lump of government money at this project hardly seems capable of being described as an effort to "commercialize" anything. We might as well say we provide federal funding to "commercialize the next generation of grade schools." Ms. Rosenthal, I don't think that word means what you think it means.
Secondly, take a look at
What was most inspiring to me, however, was one aspect of the partnership that went under reported—where the funds were sourced. It turns out that no new authorizations are required (no surprise, given the current climate surrounding our national debt) because the funds have been pulled from elsewhere in the budget.Are you kidding me? The Defense and Navy "budget" process is designed to put money on things that need money. Ship repair, aircraft repair, fuel, ammunition replacement, personnel costs and so forth, Stripping money from such allocations means something suffers. Yep, because "advanced biofuels took precedence for limited funds", something else, planned for as priority, suffered. Was it Seaman Johnny's advancement in rate? Did ships not get under way because they needed repair? Oh, those things are lower precedence, I suppose.
Further, as I have tried to say before, the issue here is not a shortage of domestic fuel that would help with "energy independence" but rather with an extreme "green" agenda that is distorting our economy and wasting taxpayer dollars (see Baloney at the Navy Top: "We use too much fossil fuel"). I am not opposed to the development of a biofuel that is self-funded and self-sustaining. I am opposed to this forced "create a market" by expending tax dollars approach.
If you think this is the wave of future, I invite you to invest your own hard-earned money into companies that produce this product, like Sapphire Energy (no, I don't own any stock, nor do I guarantee any financial results, and all private investments are subject to risk, just like investments in any other company and all the other disclaimers you can imagine) (UPDATE: Oh, wait, it's privately held.)(UPDATE2: Oh, wait, Sapphire Energy got a $50 million loan guarantee from the USDA as set out here to "to build an algae-based diesel biofuels plant in Columbus, New Mexico." - Hmmm.)
My previous rants against this "investment" can be found here, here, here and here.