Commentary by Marita Noon posted @ OILPRO
In a week of big news stories, few noticed the seven-year anniversary of Obama’s $800 billion American Recovery and Reinvestment Act—signed into law on February 17, 2009. Commonly known as the “Stimulus Bill,” calls it “one of the administration’s most consequential and least popular initiatives.” In fact, according to Politico, “the package of tax cuts and government spending…became so unpopular that the word ‘stimulus’ disappeared from the administration’s rhetoric.”
Despite the bill’s reputation, on Wednesday, Vice President Joe Biden embarked on a three-city victory tour to celebrate the anniversary of the act for which he oversaw the implementation.
His first stop was New Orleans. There he “toured a new rail container facility paid for through the 2009 stimulus,” reports the New Orleans Advocate. Outside of Memphis, he “viewed progress on an upgrade to the Mississippi River Intermodal Terminal and yard,” that, according to Politico, had “modest crowds of government and corporate officials.” Though the audience was “pre-selected,” their response to Biden’s zest for the program was “politely supportive but not wildly enthusiastic.” Politico adds: “they didn’t seem too excited by his stay-the-course-but-build-more message.”
The next day, at his third stop, he spoke to an “invitation-only crowd of more than 100 guests” at the stimulus-funded renovated Union Depot in St. Paul, MN. There, Biden was unapologetic about the stimulus, saying: “We have created more jobs in this country, because of projects like this.” The Twin Cities Pioneer Press states: “The vice president did not address criticisms of Union Depot, which last year brought in $1.7 million in revenues but cost $7.7 million in costs.”
During his trip, Biden gushed that the stimulus was “the most ambitious energy bill in history.” Politico cites the $90 billion it “pumped into renewable power, advanced biofuels, electric vehicles and other green stuff” as helping to “triple U.S. wind capacity and increase U.S. solar capacity more than 20-fold.” Yet, probably because he, obviously, wanted to focus on the positives, Biden didn’t visit any of the “green stuff” projects.
On the same days the Vice President was crowing about the success of the stimulus, the Spanish company that received more than $3.67 billion of taxpayer funds—the majority (thanks to connections with high-ranking Democrats) through the 2009 stimulus bill—released its Industrial Viability Plan that laid out its plans for survival. The Financial Times reports: “The company is trying to avoid collapse as it restructures its debts and raises cash. Abengoa sought creditor protection in November, and if it were to default it would count as the largest bankruptcy in Spanish history.”
Everybody knows about Solyndra’s brief history, costing taxpayers over $500 million, but Abengoa has managed to use tricks and reported illegal practices to stay alive—until now.
I first became aware of Abengoa, through a series of green energy reports I wrote with researcher Christine Lakatos—known as the Green Corruption Blogger—in the summer of 2012. After my pie piece, How Democrats Say “Crony Corruption” in Spanish: Abengoa, was published, a whistleblower contacted me. After being contacted by several others that corroborated what I’d heard from the first, we dug deeper into the company. In January of 2013, I met with House Oversight Committee staffers who were investigating Abengoa and we shared what we’d learned. Since October 2013, Abengoa has been under investigation for a variety of violations including immigration, employment, and insurance fraud. In addition to several columns on the atrocities at Abengoa, I wrote a comprehensive report on the company that was published by the Daily Caller in March 2014.
Now, it appears that the second largest recipient of taxpayer dollars from Obama’s clean-energy stimulus funds is nearly bankrupt—with the U.S. government being the largest creditor. In November, after Abengoa started insolvency proceedings, the Washington Times wrote: “Abengoa is a Spanish company that was another of President Obama’s personally picked green energy projects, and it’s now on the verge of bankruptcy, too, potentially saddling taxpayers with a multi-billion-dollar tab and fueling the notion that the administration repeatedly gambles on losers in the energy sector.”
Abengoa could be bankrupt by this time next month, as Spanish law gives it four months from the initial filing to try to restructure its debt. Last week, ratings agency Moody’s declared that Abengoa’s underlying operating business is still “viable.” Yet, according to the Financial Times, Moody’s is “maintaining a negative outlook…given that discussions on debt restructuring might not be successful and the company might end up in a formal insolvency process.”
While “discussions” are going on in Spain, the trouble continues here in the U.S. In December, citing “financial difficulties,” Abengoa shut down seven bioenergy plants—including its Hugoton, KS, cellulosic ethanol plant after it sold, according to Biomass Magazine, just one railcar of product. Watchdog reports that the Hugoton plant received a $132.4 million loan guarantee and a $97 million grant. The cellulosic ethanol plant—which was designed to produce fuel from leftover, post-harvest, crops—opened just a little more than a year ago with dignitaries such as U.S. Energy Secretary Ernest Moniz, former Energy Secretary Bill Richardson, and former Interior Secretary Ken Salazar participating in the “Ceremonial start-up.” The Garden City Telegram states: “Despite the initial fanfare, the plant never lived up to its billing.” It continues: “At opening, the plant was billed as the first commercial-scale, next-generation biofuel plant.” According to Watchdog, the closure could be a “signal of problems that run much deeper for the industry.” Charlie Drevna, distinguished senior fellow at the Institute for Energy Research, says: “This is just another example of the technology not being there, at least as a competitive commercial technology.”
And there’s more. On February 10, the California Energy Commission finally rejected a new plan for the Palen solar farm Abengoa had been developing. The Desert Sun, which has been following developments with the project, reports: The company missed a construction deadline “after entering into pre-bankruptcy proceedings in November.” Though Abengoa is known for energy projects like solar farms and ethanol plants, a water pipeline project it’s been preparing to build near San Antonio, TX, is now seeking a buyer.
Then, on the very day Biden was touting stimulus successes, a group of grain sellers, who had not been paid by Abengoa Bioenergy, filed an involuntary Chapter 7 bankruptcy petition in Kansas. Another suit was previously filed in Nebraska. American companies that haven’t been paid for deliveries, dating back to early August, are owed more than $10 million. They hope the suit will require U.S. creditors be paid before funds from any asset sales are retained by the parent company in Spain—which was just granted by the court.
Abengoa has also been sued by shareholders, who say that the company misled them about its financial plans. Stock prices have been declining throughout late 2015 and plunged after the November bankruptcy announcement. After a 2014 high of $28, the company’s stock is currently trading at $.81.
In Spain, former Abengoa executives have been accused of insider trading and mismanagement. Their assets have been frozen and seized. On February 17, former chairman Felipe Benjumea’s passport was revoked to prevent him from leaving the country.
Drevna, in Watchdog, points out if the plants “can’t even compete in a mandated market. How can they compete in a free market?”
With Abengoa in the news while Biden was on his victory tour, it is clear why he chose to stick to infrastructure projects and avoid the “green” disasters created by, as he called it, “the most ambitious energy bill in history.” Politico suggests that the lack of popularity for his projects is “surely one reason” he decided not to run for president.
While Biden isn’t currently on any ballot, Senator Bernie Sanders and Secretary Hillary Clinton are. (Since Abengoa is a foreign company that received U.S. taxpayer dollars, I wonder if the State Department was involved.) Both Sanders and Clinton will double down on Obama’s green energy policies like those that created the embarrassing Abenoga debacle—and many others.
Addressing Abengoa, Biomass Magazine’s senior editor Anna Simet, said: “People have a problem when government money is given to projects like these, and they experience failure. We all know that.” Ya think?
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column. Follow her @EnergyRabbit.