Guest essay by Eric Worrall
A Pennsylvania newspaper has reported details of a $50 million alleged renewable energy scam. More shocking is how easy it was, to allegedly defraud government subsidies.
An Easton engineer has admitted he rubber-stamped false reports to the U.S. Environmental Protection Agency for the owners of two Lehigh Valley biofuel companies charged in a $50 million clean energy scam.
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According to the charges against Barnes [the engineer], company officials at Smarter Fuel and Environmental Energy Recycling hired Barnes in 2010 to complete engineering reviews of their plants to document their capacities as they applied for the EPA’s renewable fuel credit program.
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To become eligible for the credit program, biofuel producers were required to submit to the EPA an independent engineering review based on a site visit to verify how the production plant would operate and how much fuel it was capable of producing each year.
According to the charges, Barnes took information he received from the company officials, including a ghost-written report by another consultant the companies had hired, and used it in the engineering reports without verifying it was correct.
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The case is one of several across the country in which biofuel producers have been charged with fraud related to subsidies and credits made available by the EPA under the 2007 Energy Independence and Security Act.
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The indictment says Dunham and Tommaso claimed subsidies and other payments for more than twice as much fuel as they actually produced by claiming in their totals partially processed waste oil that was sold to other refiners and wastewater produced in the processing of used cooking oil and ghost transactions that existed only on paper.
A $50 million local fraud case might not seem a big deal, but it should concern US taxpayers that there are other cases. Once fraudsters find an easily exploited systemic weakness, the situation can rapidly escalate. In 2010, Denmark lost 2% of their GDP, seven billion dollars, to out of control carbon credit fraud.
In this case, all the alleged criminals had to do, to get their hands on $50 million of federal money, was submit some paperwork, and find an engineer who was happy to pocket a fee without doing any work.
great job Eric!!
the owners forgot to donate $10 million of the $50 million to the right reelection campaigns.
Anything called “Smarter Fuel” should have had special monitoring applied to it all along.
I trust the engineer was a loyal donor too.
The green blob is an appropriate term for the financial shenanigans, fund raising, subsidy mining, press release factorys, etc ad nauseam that seem like a weird parasitic organism. All the people benefitting from this sort of thing make political contributions, so it is not suprizing the Hildebeast and Sanders suck up to the green blob.
So-called biofuel projects are seldom financially feasible without a subsidy. Even then, it’s necessary to expect the subsidy far into the future, which is risky. So, fraud like this is no surprise.
Peanuts. Range Fuels took in almost $250 million on a promise to make cellulosic ethanol in response to Bush’s ‘switchgrass’ EISA07. Never produced a drop. Went bankrupt.
The EPA shouldn’t be involved in matters related to energy, like how the Canadian equivalent is forbidden… for now.
EPA has given Microsoft a award for reducing plant food in the atmosphere:
http://mspoweruser.com/epa-recognizes-microsoft-2016-climate-leadership-award/
I just read an article that in my mind clarifies everything. Also answers why TPTB so desperately want a CO2 tax. http://www.washingtonsblog.com/2016/03/corruption-works-hillary-clinton-example.html
Other cases? Here is a list of scams and failures with links that was published in 2012:
http://dailysignal.com//2012/10/18/president-obamas-taxpayer-backed-green-energy-failures/
It’s only money, let’s print some more.
Hmmm. Someone wants to grow a biofuel product. Take a report off the shelf. Send it in. Grow the product regardless of whether or not it has a chance in hell of doing well. At least someone notices and says something.
A kid needs academic help. Take a box of curriculum off the shelf and apply. Don’t bother looking up whether or not this box of curriculum has been shown effective in independent studies related to the learning issue the kid has. Eventually the kid gets referred for special education and lands in a long term program because once in, it takes a big-ass effort to get them back out. Happens every day and no one gives it a second thought. No do-over. No fraud. No penalty. No recall of the box of curriculum for being useless. And suziecue gets 8 years of special ed.
Wonder how this caper unraveled? Surely the EPA is not smart enough to figure it out. They were probably complicit in the deal. These guys probably didn’t make the appropriate campaign donations and got made an example.
Hmmm. Comment must have had an unacceptable word in it cuz comment didn’t show up.
Duh.
Kleptocracy Rules.
So many naked emperors, so little time.
Sounds like the good old” magical device adds water to your gasoline and increases mileage by 100%”. Hurry while they last!
We need to start a running list of functions EPA fails at. We know mining engineering is a fail, ghost employee management is a fail, smart green finance lending is a fail, and asthma analytics assessment and attribution is a fail.
There is a reason intelligent life from other solar systems have not contacted us. They know a high risk, highly leveraged rock when they see one.
They used to say “where there’s muck, there’s brass”.
Now they say “when it’s green it’s fraud”.
perhaps a $600 million fail –
“Legendary venture capitalist Vinod Khosla backed a startup called KiOR as part of his ambitious push for green energy. Now KiOR is bankrupt, he and company executives are being sued for fraud, and Khosla’s big biofuel bet is looking increasingly questionable”.
“turn wood chips into a biofuel that could power vehicles more cleanly than oil, using a first-of-its-kind technology that wowed engineers, politicians, and investors …”
http://fortune.com/kior-vinod-khosla-clean-tech/
The renewable fuel subsidy program was created to encourage fossil fuel producers to introduce renewable biofuels, such as biodiesel made from used cooking oil, into the national fuel supply.
Why are good little CAGW weenies even looking at any bio-fuels ? … they are based on that EVIL carbon.
$50 million alleged renewable energy scam.
Is that all
Those are a dime a dozen…
They will soon cut a deal to save VW jobs—for a fat donation of course.
“Green” energy, of course, is the modern-day equivalent of snake oil. Its only use is in lining the pockets of Big Green, at the expense of all.
Scammers are always looking for a comfortable roost and fraud-ridden CAGW is the umbrella organisation for a multitude of comfy roosts as it is all built on lies. $50,000,000 lost is small beer compared to some huge scams.
Very bad news that Roy Spencer has had to shut comments after repeated attacks by arch-irrelevant Doug J. Cotton. Comments are the life-blood of these investigative sites.
This post led me to investigate “fossil fuel subsidies”. The concept started with the IEA (International Energy Agency) listing countries that cover the cost of providing fossil fuel to their citizens. These include mostly third world countries and some producers such as Saudi Arabia, Venezuela, Russia. Conspicuously missing are Canada, USA, England, Europe http://www.worldenergyoutlook.org/media/weowebsite/2015/Subsidies20122014.xlsx. Therefore according to the IEA, these countries don’t provide subsidies.
This led me to the question, why are some groups claiming that fossil fuel is subsidized? Oil Change International states “In the United States, credible estimates of annual fossil fuel subsidies range from $10 billion to $52 billion annually yet these don’t even include costs borne by taxpayers related to the climate, local environmental, and health impacts of the fossil fuel industry. As of July 2014, Oil Change International estimates U.S. fossil fuel subsidies at $37.5 billion annually, including $21 billion in production and exploration subsidies.” (http://priceofoil.org/fossil-fuel-subsidies/). They provide a spreadsheet of their calculations which reveals a very strange thought process. They take the approach that any tax breaks the production, distribution, and consumption of fossil fuels is considered a tax break. Thus the subsidies include items like:
– expensing exploration and development costs (which are necessary expenses to find the oil which will be taxed),
– temporary expensing of equipment for refining (instead of capitalizing and taking capital costs yearly),
– partial expensing for advanced mine safety equipment
– reduced tax for thin-seamed coal (not a rebate but just less tax than thick-seamed coal production pays)
– exclusion of low-volume oil and gas wells (which reduces the taxes collected on their production),
– low income home energy assistance program,
– fuel tax exemptions for farmers, County Boards of Education, Public Administrations
These are just a few examples of what this org considers subsidies. I question how these can be considered subsidies. They include standard business practices for calculating taxes (no business pays tax on expenses), a lower tax rate for some marginal profitable endeavors, and tax relief to poor people and organizations that are funded by tax dollars. They even include “Alternative fuels production credit” as a subsidy to the fossil fuel. Huh?
I then thought what if the same logic were applied to calculate the subsidies to the renewable energy industry. On top of the grants, preferred pricing, enforcing legislation etc. one would have to add the preferred tax rates, rebates, taxes charged on other energy sources (ie. carbon tax, clean energy tax). In addition, one would have to consider the loss of taxes and royalties that are collected from the fossil fuel industries that are not paid by the alternative energy sector. And the boondoggles that this blog discusses.
But when I considered the enormity of these subsidies, I decided that it was time to stop. The result would surely put me into a depression from which it would take years to recover.