Today, November 17th, all eyes in the energy sector will be trained on Washington, where Secretary of Energy Steven Chu testifies before Congress regarding the failed Solyndra loan guarantee.
Recent news that Obama Administration officials pressured Solyndra to delay an email regarding layoffs until after the 2010 midterm elections, has emboldened Republican lawmakers charging that the DOE’s loan guarantee program was improperly run.
Already, Secretary Chu was prepared to face tough questions as to why the loan was guaranteed in the first place, and why the DOE agreed to a debt restructuring that subordinated the US taxpayers to other securities holders.
Eyes on the Prize
Here the Digest’s take: For bioenergy, S-Day is about Solyndra and Secretary Chu, but it isn’t really much about bioenergy. Out of an $80 billion authorization for clean energy loan guarantees, and over a six-year period since the original authorizations, the DOE managed to complete two for bio-based projects — Abengoa and POET. Despite the fact that biofuels are the dominant platform for clean energy.
The DOE has been basically an electron shop since 2009, to the extent that it is about clean energy — making little or no effort on food vs fuel, and offering more loan guarantee dollars for a $100,000 electric car than the entire bisector, which currently has 207 projects under development around the world with five billion gallons of advanced biofuels in proposed capacity.
Out from Solyndra’s Shadow
Today, Brent Erickson of BIO, in his regular Digest column, points out a lot of good things about the overall federal loan guarantee program, especially over on the USDA side, and calls urgently for the continuations of programs like it. For sure, its an essential component, so far, to bond programs like those developed by Mintz Levin, Krei DeVault and Stern Brothers.
Here at the Digest, we’ve advised the industry, going back two years into the early hours of the Obama Administration, to “get off the government dope,” and to raise equity, partner with strong balance sheets, combine where necessary to build strength, and seek private technology risk insurance. And point government, county- state and federal, at offering “sweeteners” to privately-operated technology risk insurance programs, rather than running a loan guarantee program.
To us, S-Day is being defined around Secretary Chu and Solyndra, but is should be defined around capital Strength and critical Success Factors that matter.
Bioenergy Critical Success Factors
So, we are delighted to run, today of all days, Bioenergy Critical Success Factors, by B.A. (Ben) Thorp, Harry Seamans and Masood Akhtar. It may be less sexy television than watching the Hill drama as Republicans grill Chu over the Solyndra affair.
But it has a lot more relevance for the future.