It’s always worth keeping in mind what the taxpayer-funded business of righteous renewables actually looks like.
In 2011, it seemed pretty bad that the Navy was buying a biofuel blend for $16 a gallon to fuel its “Great Green Fleet.” (Technically, the pure biofuel was over $26 a gallon, and was reduced to $16 a gallon only by being blended with conventional fuel.)
Now, as noted earlier today by our hard-working LU Staff, we learn that the Department of Defense has also spent $150 a gallon on biofuel.
Technically – again – we already knew that. The Congressional Research Service reported it in a study produced in 2012, “DOD Alternative Fuels: Policy, Initiatives and Legislative Activity.” Appendix A, on pp. 13-14 of the study (pp. 16-17 of the PDF document), lists the various DOD contracts up to that point, and the contract for 1,500 gallons of algal-oil jet fuel, at (technically) $149.00 a gallon, is number five in that list. The contract was awarded in September of 2009.
Usual Suspect I
Gomer Pyle would step in at this point and utter his signature plaint: “Well, gaa-aah-aa-LEE, Sergeant!” Who’s the contractor for the $149-a-gallon algal-oil jet fuel? It’s Solazyme: the same company that contracted for the Navy’s $26-a-gallon marine biofuel. Solazyme, you’ll remember, was a principal in the marine biofuel contract for the Great Green Fleet, along with Dynamic Fuels. (If you’re looking for the Great Green Fleet contract in the CRS list, it’s on the second page of the list, under Dynamic’s name. It’s the two items for 350,000 and 100,000 gallons of fuel, at $26.75 per gallon.)
The Solazyme contract for $149-a-gallon fuel was funded by the 2009 Obama stimulus, also called the ARRA (American Recovery and Reinvestment Act). “DLA,” co-listed for the contract, is the Defense Logistics Agency, which received ARRA funds for a number of renewable fuels projects. The algal-oil jet fuel contract was among several from which Solazyme benefitted, to the total tune of over $21 million.
As noted in my December 2011 post, Solazyme’s good fortune kicked in when TJ Glauthier signed on as one of its “strategic advisors.” Glauthier had been part of the Obama transition team after the 2008 election, and worked on the energy-sector portion of the 2009 stimulus.
But Solazyme’s connections don’t end there. One of the company’s founders, and current CEO, Jonathan Wolfson, sits on the board of the Center for American Progress (CAP) Clean Tech Council. CAP, of course, is John Podesta’s think tank organization.
In 2011, a few weeks before the Great Green Fleet contract was awarded, Podesta Group graduate Drew Littman joined Solazyme as head of the company’s Washington lobbying office. According to Littman’s c.v., he came to Solazyme from a stint as chief of staff for Senator Al Franken (D-MN). Prior to that, however, in 2007, he worked for the Podesta Group, the lobbying organization founded in the 1980s by John Podesta and his brother Tony. (Littman left Solazyme for Venn Strategies in 2013.)
Solazyme’s current president, meanwhile – appointed in early 2014 – is David C. Cole, who came to the position from his former job as CEO of Hawaii BioEnergy, also a veteran beneficiary of Obama money. Unsurprisingly, Hawaii BioEnergy was started in 2006 with backing from Vinod Khosla, founder of Sun Microsystems, whose fingerprints are all over green-energy start-ups in Hawaii (as well as elsewhere) – and who is well known for his connections in the Obama administration, with a special emphasis on taxpayer-funded green-tech links (see here and here as well, or just do your own search and turn up more).
No summary would be complete without a mention of Jerry Fiddler, a member of the Solazyme board, who is a major donor to Democrats (including $24,000 to Obama in 2008) and a one-time “executive-in-residence” of the venture-capital firm Foundation Capital, whose clean-tech portfolio reads like a Who’s Who of Obama-crony green-energy firms. (More on Fiddler’s thoroughly Obama-compatible view of the government-business nexus here.) As noted at the Green Corruption link, TJ Glauthier was connected with two of the green-energy firms that figured prominently in Foundation’s investments at the beginning of Obama’s first term.
Solazyme’s 2011 IPO, it’s also worth noting, was handled by Goldman Sachs, whose dense and seemingly endless connections with the Obama administration are documented by both the left and the right, and have included Goldman’s sponsorship of a number of Obama-crony IPOs in the green industry.
Usual Suspect II
But wait! – there’s more. Solazyme’s key partner in algal-oil fuels is Honeywell UOP. Honeywell UOP has a proprietary process for creating the fuel from Solazyme’s algae-fermented biomass (see here as well).
Honeywell UOP’s headquarters is in the Chicago suburb of Des Plaines, Illinois. (Solazyme, of course, has a biofuel plant in Peoria, Illinois, purchased in May 2011.) The UOP subsidiary’s CEO is Rajeev Gautam, but the CEO of parent Honeywell is David M. Cote, a major Obama crony and overseer of a notably humongous corporate PAC. The Wall Street Journal ran a special report on it in 2010, when its $3+ million in political donations vaulted the Honeywell PAC to #1 in corporate political giving.
The WSJ article described Mr. Cote’s relationship with Obama thus:
Honeywell’s engagement with politics goes beyond money. Mr. Cote has become one of President Barack Obama’s go-to CEOs, as the president has been criticized as unresponsive to business concerns. Mr. Cote attended a number of White House lunches and dinners organized as part of a campaign to woo business support for environmental and jobs legislation. The president appointed Mr. Cote to the National Commission on Fiscal Responsibility, which is deliberating on how to tackle widening U.S. budget deficits.
Mr. Obama also named him to co-head the India-U.S. CEO Forum, a high-level business-development group that in June recommended setting up a $10 billion fund to help India develop its infrastructure, launch clean-energy projects, improve education and enhance biotechnology efforts.
Cote worked for General Electric for 20 years, from 1979 to 1999, spending his last three years there as a senior vice president. He became CEO of Honeywell in 2002.
Alert readers may remember a whole other green-energy boondoggle (this one in Hawaii) in which Honeywell UOP used $25 million in taxpayer funds to create a grand total of 10 jobs. (Kind of spooky how often Illinois and Hawaii come up in these green-fuel boondoggles.)
Iran sanctions violation
As depressing as this litany is, it is probably of equal moment that Honeywell UOP was doing business with Iran – in Iran’s oil and gas industry, under U.S. sanctions since 1996 – at the same time Honeywell’s CEO was being lionized by the Obama administration, and UOP was participating in money-losing, taxpayer-funded biofuel contracts. In other words, Honeywell UOP was violating U.S. sanctions at the time, under what Bloomberg reporters referred to demurely as “loopholes.”
Honeywell purchased UOP from Union Carbide in 2005, and UOP’s activities in Iran were a holdover from the 1990s, when a UK subsidiary of UOP obtained contracts with Iran’s national petroleum corporation. Interestingly, although Bloomberg reported that UOP came under pressure to terminate the contracts in 2010, and a CRS study from March 2014 mirrored that reporting (see p. 48), there doesn’t seem to be definitive information that the contracts were terminated. Not information available from an official Western source, at any rate. The Foundation for Defense of Democracies provides links that suggest UOP retained at least some of its interests in Iran through 2011.
That said, Iranian media reported in February 2012 that UOP had been blacklisted by Iran “for failing to meet…commitments in the nation’s refinery projects.” So it appears that UOP eventually did shed at least some of its Iranian activities. For which the American taxpayer can be grateful, I suppose.