Federal officials who backed Range Fuels Inc., a Broomfield-based biofuel company, plan to liquidate its $100 million plant in Georgia, according to news reports.
The move is another setback to the U.S. biofuels industry that has struggled to gain scale and longterm viability. And no doubt, it supports critics who contend the Range Fuels fiasco is a case study in the folly of politically directed investment.
According to Bloomberg, the Soperton, Ga., factory is to be liquidated after Range defaulted on a federal loan and failed to produce cellulosic ethanol, a fuel made from wood chips that the plant was intended to make.
In addition, the Macon (Ga.) Telegraph newspaper reports that a loan servicer advertised a foreclosure sale of the plant in a Soperton newspaper last Thursday.
Range Fuels was the recipient of a $76 million grant from the U.S. Department of Energy four years ago, as well as an $80 million loan guarantee from the U.S. Department of Agriculture (USDA) in early 2009. However, according to Bloomberg, the company received only portions of the funds.
The company had hoped to produce 100 million gallons of cellulosic ethanol from wood chips annually at the biorefinery. But according to the Wall Street Journal, Range’s former CEO, Mitch Mandich, said more than two years ago the problem was that nobody had figured out how to produce cellulosic ethanol in commercial quantities.
In early 2010, the EPA said Range would finally produce some fuel in 2010—but only four million gallons, not 100 million, and of methanol, not cellulosic ethanol. So taxpayers have committed $162 million (along with at least that much in
private financing) to produce four million gallons of a biofuel
that others have been making in quantity for decades.