Stacking up like cord wood (cellulose)
AgSouth Farm Credit, the bank that loaned Range Fuels $80 million to launch its Soperton ethanol plant, is foreclosing on the plant.
That leaves taxpayers on the hook for the $64 million portion of the loan that was guaranteed by the U.S. Department of Agriculture.
AgSouth advertised the foreclosure sale of the plant in Thursday’s Soperton News.
Repeated phone calls to Range Fuels over several days were not returned. The company’s website disappeared in October.
Justin DeJong, a spokesman for the Department of Agriculture, said in a statement Thursday night: “We are disappointed that this company did not succeed, and we will be working on behalf of the American people to protect the federal government’s interest in the loan.”
In its statement, the Department of Agriculture said it had worked with AgSouth “on options to revive operations, but on October 27th notified the lender that it was moving forward with liquidation, because liquidation is seen as the best way to preserve U.S. assets and reclaim funding.” The department said it anticipates that there are “a number of companies” that could be interested in the site.
That $80 million is on top of $76 million given to the company back in 2007 which claimed it could produce millions of gallons of ethanol from wood chips.
From Robert Bryce:
There’s ample reason for outrage here. Range had claimed it could make ethanol at efficiencies far greater than those being achieved by corn-based ethanol producers. Tad Patzek, chair of the petroleum and geosystems engineering department at the University of Texas at Austin and a veteran critic of the biofuel craze, told me that Range’s failure “was easily predictable based on the thermodynamic inefficiencies of the refineries. But no one in the Department of Energy paid any attention.”
Allow us to translate: It took more energy to produce the ethanol than that same ethanol would yield.
More from Bryce:
Instead, federal bureaucrats were once again gulled by extravagant claims from people like Khosla and a cadre of high-profile national-security types, who continue to claim that ethanol and other biofuels will somehow save America from the evils of foreign oil. And the federal bureaucrats were convinced even though a small dose of sixth-grade math would have shown that large-scale development of wood-based biofuels was little more than a pipe dream.
We're pressed for time right now but we are going to revisit this issue later on as time permits and as related to some breaking news yesterday.
We know you are waiting for the other shoe to drop but we have yet to locate any Obama crony/donor/bundler in this particular case. Shocking, we know.
Suffice to say, however, yet another misguided plunge wasting tens of millions of tax-payer dollars into a not-yet-ready-for-prime-time alternative energy technology.