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  • Writer's pictureAmerican Diversitied Energy

Companies Worry About Loss of Loan Guarantee Program

Any suggestion that the dissolution of the Department of Energy (DOE) Title 17 Loan Guarantee program will not have a negative impact on the economy or will have only minimal adverse impact can now be put to rest. Some project developers — on the brink of launching after years of advance work, preparation and momentum—have recently thrown in the towel, convinced that DOE’s Title 17 Loan Guarantee Program will be eliminated soon and without that funding their projects cannot move forward in an efficient and financially reasonable fashion.

The biggest we know about so far: Sundrop Fuels’ planned leading-edge renewable energy project near Alexandria, LA., where the unemployment rate, at 6.8 percent, is notably higher than the national 4.4 percent unemployment rate. Sundrop, which finalized the purchase of a 1,213-acre site in January 2012 to build a $450 million, 50-million-gallon capacity commercial plant to produce green gasoline from woody biomass, has stepped away. BiofuelsDigest reported the development in mid August, alerted by recent reporting in The Town Talk, Alexandria’s online newspaper.

“It has become clear, given the new politics in Washington, that our application through the DOE Loan Guarantee program is not going to progress further,” Sundrop announced. “As such, we are not going to be able to finance and build the facility in Louisiana so there is no point in tying up money there.”

The massive manufacturing facility would have produced 87 octane bio-gasoline.

In 2015, Sundrop Fuels received approval for Part 1 of its application for a DOE Title 17 loan guarantee. The guarantee would have provided the financing to build the company’s first commercial plant which, once fully operational, would have been the largest bio-gasoline production plant in the world. That same year, Sundrop began an expansion of its research and development laboratory and simulation facility at its Longmont, Colorado, headquarters.

It is not known how many other companies that have applied for or who were intending to apply for Title 17 loan guarantees might be rethinking their futures. What we do know is that projects funded by the loans have produced more than 56,000 jobs in 20-plus states. We also know that projects currently undergoing review—which will be stopped dead unless some sort of last-minute deal is made on Capitol Hill—represent $50 billion in investments in America’s energy infrastructure will create 300,000 jobs.

American Diversified Energy Consulting Services (ADE) is sufficiently convinced of the value of these loan guarantee programs and the implications for our nation’s future we are continuing to speak with Washington leaders who have the ability to devise a budget deal that will preserve this program (and a second loan guarantee program through the Department of Agriculture). We encourage companies with applications or the intent to apply to make their feelings known.

ADE is also exploring alternative means of financial support so if loan guarantees end, and that’s a strong possibility, we can guide companies with alternative energy ideas to new sources that will help important projects take flight.

If you want to weigh in on this matter with your elected officials—and timing is urgent because Congress is moving toward passage of the bills that will eliminate these programs (House bills H.R. 3266 and H.R.3268 and Senate bills S. 1609 and S. 1603)—you can find the phone number of your senators or representatives at:

Although it might seem an outdated approach in these times of electronic communication, experts say it’s more impactful if you call rather than email or text, even if you’re routed to voicemail.


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