Biden revives Obama-era loan program that funded Solyndra and cost U.S. taxpayers more than $500 million
The Biden administration has issued its first clean energy loan guarantee, reviving an Obama-era program that helped launch the nation’s first large-scale wind and solar farms a decade ago, but is largely inactive in recent years.
The Department of Energy said it securing up to $1 billion in loans to help Nebraska company scale up ‘clean’ hydrogen production to convert natural gas into commercial products used in manufacturing and agriculture.
The revived loan program is part of President Joe Biden’s effort to halve emissions of the planet’s warming greenhouse gases by 2030, amid a legislative gridlock that has stalled a set of $2 trillion dollars for social and environmental initiatives. It is one of the tools he can use without new legislation.
Under President Barack Obama, the program spurred Tesla’s efforts to become an electric car giant, but it stumbled after the Californian solar company Solyndra has gone bankrupt shortly after receiving federal aid a decade ago, costing taxpayers more than $500 million. Republicans and other critics have seized on Solyndra as an example of wasteful spending under Obama’s stimulus package.
The aid to Lincoln-based Monolith Inc. is the program’s first non-nuclear loan guarantee since 2016.
Monolith produces “carbon black”, a powdery substance that improves tires and other rubber products, and hydrogen used in ammonia-based fertilizers.
Monolith says it can create both products while dramatically reducing their greenhouse gas emissions. The company plans to use the Department of Energy guarantee to fund a major expansion of its existing plant in Hallam, Nebraska, which produces hydrogen and carbon black.
BIDEN’S ENERGY POLICIES MUST BE RESET FOR SECOND YEAR
Energy Secretary Jennifer Granholm hailed the announcement as a sign that the once-high profile lending program is back and ready to support clean energy deployment, from biofuels to nuclear power and electricity. offshore wind farm.
“Advanced, clean generation technologies like Monolith’s are the kinds of impactful projects that not only support sustainability, but also economic growth and clean energy jobs for the American people,” Granholm said.
Monolith will use the loan guarantees to “develop the innovation needed to help lead the clean energy transition, while creating well-paying green jobs and strengthening our nation’s supply chain,” said Rob Hanson, co- founder and CEO of the company.
Jigar Shah, who took over as head of the loan program office last year, said the program had attracted more than 70 applications worth more than $60 billion. The new bipartisan infrastructure law broadened the authority of the program and broadened the pool of eligible borrowers. The agency has access to about $40 billion in loan authorization and expects to make a series of loan commitments in 2022, Shah said.
While Tesla and Solyndra are the best-known examples, the loan office manages more than 30 projects worth more than $30 billion and generates $500 million annually in interest revenue for the federal government, Shah said.
“We have a track record of our winning projects,” he said in an interview. “And I know we get a lot of press about who doesn’t succeed,” but the program has taken just over $1 billion in since 2011, or about 3.3% of its investments, a figure that, according to Shah, is comparable to that of commercial banks.
“A lot of people think we’re not taking enough risks,” he said. “But we are in line with the best of the best.”
Some companies asking for help “want the loan program office to be your fairy godmother to Cinderella, where you show up in rags and I create a carriage for you out of a pumpkin and turn all the horses mice and all that,” Shah said. “But that’s just not how it works.”
A former clean energy entrepreneur who founded solar company SunEdison, Shah said he understands the mindset of loan seekers – “you’re selling the dream, aren’t you?” — but says his job as a government official is to provide a reality check even as he offers help.
“Tell me how you are going to make mice horses, pumpkins a carriage and rags a beautiful dress,” he said, continuing the metaphor. “What processes and procedures have you learned to put in place? How will you protect my money?″
The loan guarantee program “is not intended to be a grant. It is intended to be market rate debt,” Shah said.
Monolith is the first-ever commercial-scale project to deploy a technology known as methane pyrolysis, which converts natural gas into black carbon and hydrogen. While carbon black typically emits large amounts of carbon dioxide and other gases, Monolith says its technologies aim to reduce greenhouse gases by up to 80% compared to traditional production.
BIDEN’S FIRST YEAR WAS MARKED BY CRISES
Robert Howarth, a professor of ecology and environmental biology at Cornell University, said he was ‘very skeptical it could be done with low emissions’, adding he was ‘very disappointed’ with the action of the Department of Energy.
“I highly doubt the emissions reductions will be as significant when fugitive upstream methane emissions are included,” Howarth said in an email.
Howarth and Stanford professor Mark Jacobson published a research paper last year questioning the climate benefits of so-called blue hydrogen produced from natural gas. “Blue hydrogen emissions are worse than just burning natural gas for power,” Howarth said.
Shah called Howarth a friend, but said he was confident Monolith could meet his carbon pollution projections.
“Even with the worst-case scenario and the methane leaks, we still have an 80% reduction in greenhouse gas emissions compared to business as usual,” he said.
Monolith said it would create around 1,000 jobs to support the expansion of its hydrogen plant
Goodyear Tire & Rubber Co., one of two tire makers to sign a letter of intent to buy the carbon black, said in a statement it was “excited” to work with Monolith to reduce its footprint. carbon.
CLICK HERE TO GET THE FOX NEWS APP
“As the only tire manufacturer headquartered in the United States, it is especially gratifying to be at the connection point of meaningful American innovation with Monolith” and the Department of Energy, said Richard Kramer, Chairman and CEO of Goodyear.