WASHINGTON, DC – The Government Accountability Office issued a report documenting a series of shortcomings in the Department of Energy’s administration of the federal loan guarantee program for energy projects that reduce greenhouse gas emissions – shortcomings which Growth Energy described as a “road block” to developing cellulosic ethanol in the United States.
“Congress had tremendous foresight in creating a loan guarantee program to advance America’s renewable energy goals. With tight credit markets, the government must help early stage cellulosic ethanol producers secure the financing they need to prove their revolutionary technology. Yet, as the GAO has clearly identified, the Energy Department’s loan guarantee program is not working properly and that is especially true for cellulosic ethanol. Since the Department of Energy began administering this program six years ago, there is yet to be a single loan guarantee issued to a producer of cellulosic ethanol. Yet, the federal government’s own calculations find that cellulosic ethanol is carbon negative – it takes more GHG’s out of the air than it creates. It’s not just a little better than traditional gasoline from oil, it’s a lot better. But we cannot get the Department of Energy to back a loan guarantee to help drive this industry forward,” said Tom Buis, CEO of Growth Energy, the coalition of U.S. ethanol producers.
The modern U.S. Department of Energy was created in 1977 partly in response to a cartel-driven oil crisis that shocked the American economy. At the time, the mission of the agency was identified as helping the United States wean itself off its dependence on foreign oil. Today, Buis noted, a major hurdle in making America more energy independent is the Energy Department’s failure to properly manage the program intended to develop cellulosic ethanol and other domestic energy programs.
“I am confident of the Obama Administration’s commitment to developing a vigorous clean-energy industry in the United States. Yet, just yesterday, the Environmental Protection Agency revised the nation’s cellulosic ethanol production target for next year from 250 million gallons to less than 20 million gallons. The single biggest reason for that revision is a lack of financing available to cellulosic ethanol producers, many of which are ready to build plants if funding can be secured. The Energy Department needs to address these issues identified in the GAO report and fix the loan guarantee program,” Buis said. “Without it, we will continue importing foreign oil rather than developing a domestic cellulosic ethanol industry.”
The GAO report is available here
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About Growth Energy
Growth Energy is a group committed to the promise of agriculture and growing America’s economy through cleaner, greener energy. Growth Energy members recognize America needs a new ethanol approach. Through smart policy reform and a proactive grassroots campaign, Growth energy promotes reducing greenhouse gas emissions, expanding the use of ethanol in gasoline, decreasing our dependence on foreign oil, and creating American jobs at home. More information can be found at GrowthEnergy.org.