Cellulosic Biofuel is a Boondoggle-- Governor Bentley, Explain Yourself and Your Big Biomass Boligee

Biomass Plant in Michigan

We've written about the proposed biofuel plant in Boligee, Alabama before and what we really suspected it was all about--one great big federal and special interests fleece job. But Governor Mule Bentley claims it's a way for him to live up to his campaign promises of "jobs, jobs, jobs," and Alabama's press refuses to question the project. Why?

We say Governor Bentley is full of biomass with this idea and what happened in Baldwin County with the same proposal gives credibility to our argument that this is not a job creator as much as it is a money trough for certain interests at the taxpayer's expense:

MOBILE, Ala. -- Facing bankruptcy and a $10.4 million judgment from a lawsuit, Jack W. Boykin approached a city in southern Illinois last week with a project that he said would create 200 jobs.

Billy McDaniel, the mayor of Metropolis, said that Boykin — an originator of the failed and allegedly fraudulent Cello Energy in Baldwin County — inquired about an industrial park in the city that could be home to one of a half-dozen alternative fuel plants that he planned for the state.

In 2009, a federal jury in Mobile awarded $10.4 million to a company that owned a pair of paper mills in Monroe County and invested $2.5 million in Boykin’s supposedly revolutionary technology to turn wood chips and other plant matter into cheap fuel.

Two years later, testimony at the federal trial indicated that the Cello Energy plant in Bay Minette had never been completed and had produced just $17,000 worth of fuel. Lab testing showed that a batch of Cello’s fuel contained no biomass material.

Today, the plant sits quiet in Bay Minette. No one answered the phone last week. 

In a second article on Cello Fuels we can see that the Boligee proposal and the Baldwin County boondoggle mirror each other in the manner in which they were discussed and conceived:

Jack W. Boykin -- with his Baldwin County company, Cello Energy -- was one of those. He persuaded investors to pour millions of dollars into his promise to produce cheap biofuel using wood chips and plant matter, even tire scraps.

Boykin had a lot of backers. David Bransby, an Auburn University agronomy professor, vouched for Boykin’s concept. So did the Environmental Protection Agency, which once named Cello as one of two companies that largely would enable the country to produce 250 million gallons of cellulosic ethanol each year by 2011.

Thus far, no company has proven an ability to produce cellulosic biofuel in commercial quantities. *Range Fuels, a company for which Bransby served as a scientific adviser, recently closed a biofuel plant in Georgia after obtaining significant funding from the government and private sources. 

*Range fuels is another brainchild of venture capitalist Vinod Khosla, the same investor behind the proposed Boligee, Alabama CE Plant Coskata. Cello Fuels was said to be backed by $12.5 million from Khosla, although a spokesman for Khosla "denies" he was ever involved with Cello. Court proceedings seem to indicate that Khosla was involved with Cello. What is clear about Khosla is that he is on a mission to become the "Baron of Biofuels."

An assessment of Khosla from chemical engineer Robert Rapier:

"I felt like he [Khosla] came into the energy industry without a very good comprehension of if, but felt that he would apply his golden touch from Silicon Valley to show the dinosaurs how Silicon Valley innovates. I also felt like he was attracted to people who made grandiose claims, but didn’t have the proper historical perspective to determine when something was truly novel (and really worked)."

We understand the EPA's desire to support alternative fuels, but thus far all that has really happened is that millions of taxpayers dollars have been invested in companies that have gone bankrupt and not lived up to all of their grand promises that Cellulosic Ethanol (or ANY biofuel) can be produced on a viable scale, if at all. 

Edmunds Inside Line reports that Alabama-based Cello Energy, which was supposed to produce 70 percent of the EPA’s 100m gallon/year cellulosic ethanol goal, has been convicted of fraud. A jury has awarded over $10m in damages to investors after witnesses testified that Cello’s supposedly biomass-derived fuel was actually petroleum based. Furthermore, it turns out that Cello only has the capability to produce 20m gallons of its putative biofuel per year. The EPA’s Renewable Fuel Standard (RFS2) had banked on Cello to produce 70m gallons per annum. The downside? If (when) America’s cellulosic ethanol producers fail to meet the 100m gal/year mark inn 2010, the EPA could sell credits which would increase the biofuel’s price to $3/gallon. Current futures place the fuel’s value at $1.77/gallon. Alternatively, the EPA could postpone the ramp-up to 100m gal/year… but who’s expecting that to happen? Meanwhile, so-called “second-generation” biofuels continue to act as a subsidy magnet for an industry that is wholly addicted to feedstock-based fuels and government assistance.

The Baldwin County story of Cello clearly illustrates that biomass is a huge profit source for flim-flam men who take full advantage of the race to energy alternatives. Since the Boligee biofuel project has been in the works for two years, this was obviously a Riley scheme that was passed down to Bentley.

Executive Order 37 was established by Riley in 2007 and it set up the Alabama Research Alliance Trust Fund a $10,000,000 dollar fund that was reported to use the interest on the principal to fund alternative energy projects:

“Innovative approaches are needed to make our nation energy independent and to free us from our dependence on foreign oil,” Riley said in the release. “By generating alternative energy from renewable sources, these projects will serve as an example that other governments may follow to cut energy costs and stretch taxpayer dollars.”
The grants, which were awarded from the Alabama Research Alliance Trust Fund, are being administered by the Alabama Department of Economic and Community Affairs. According to the governor’s press release, interest earned from the $10 million trust fund is used to support alternative energy research in Alabama.

Riley has more than a passing interest in Bentley carrying this ball because he created the game with this Order and the slush fund that followed, so of course it's a great idea because it's Riley's idea.

When it comes to economic development, let's face it, Bentley isn't the sharpest tack in the toolbox. That's why he's surrounded himself with men who seem to control what he does and he makes a huge misstep in carrying on Riley era pie-in-the-sky deals without fully understanding them beyond what Bob Riley tells him. After all, it was Riley who told the Bentley administration this about economic development deals in the works:

"If they have any questions about our economic deals all Governor Bentley has to do is call me and I'll confirm to him what was discussed about a particular project. I'm always just a phone call away."

That's a convenient way to make sure your prey gets into the 'trap,' in addition to paving the way for Big Luther to ride to the governorship in 2014. Why do we say that? This is why, in addition to the ridiculousness of CE in Alabama and its real 'viability' on a mass scale:

Riley also predicted the term of his successor; Dr. Robert Bentley would be “a disaster” making it easy for Strange to be successful in 2014.

If we have said it once, we'll say it again, better watch your Bass Doc, you're getting dangerously close to one of many well-planned gotchas.

Bentley is just not smart enough to question the validity of Riley's previously brokered deals. Or maybe he's just going along with the Mules that he surrounded himself with who are in place to be sure that previous deals to fleece Alabama and the US taxpayers, while they laugh all the way to the bank, stay on course.

So, that leaves us with our original question when Governor Bentley announced the project for Boligee, Alabama--who will really benefit from the Boligee boondoggle?
And why isn't the Alabama media asking the right questions about the Coskata project?

**Coskata partnered with Monsanto subsidiary Ceres, Inc. to provide cellulosic switchgrass stock for it's Pittsburgh plant. This link provides compelling evidence that to solve one problem, we'll create others that won't be without serious repercussions.
Facts about biomass plants that are not being discussed. 
An Unsustainable Idea (see part 6)

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