Solyndra 2: DOE Pushes $8B in Loans for New Fracking Technology
The U.S. Dept. of Energy just launched a new program to encourage research into “advanced resource development” in fossil fuels to reduce carbon emissions (what utter folly). Regardless, the feds have $8 billion of taxpayer money they want to give out in loan guarantees for companies willing to come up with new and improved ways of drilling and fracking…
Here’s what the Penn State Marcellus Shale Law Blog says about the new program:
On July 2, 2013, the U.S. Department of Energy released a draft solicitation that would allow well operators developing or improving gas recovery techniques to apply for federal funding. To be eligible for funding from the DOE, a company would need to submit an application detailing a project that: 1) advances resource development, 2) applies carbon capture techniques, 3) utilizes low-carbon power systems, or 4) demonstrates efficiency improvements in current energy systems. The DOE will make available up to $8 billion in loan guarantees through this solicitation.
Current well operators and gas producers could apply for federal funding under the “advanced resource development” category, which specifically calls for new techniques in drilling/well stimulation, such as dry fracking, and the development of flaring reduction systems. Exothermic extraction, or “dry fracking,” is a relatively new drilling technique that utilizes pumice, metal oxides and expansive evaporants (gases), instead of water, to complete fracturing.(1)
Here’s the announcement from the Dept. of Energy:
As part of President Obama’s Climate Action Plan, the U.S. Department of Energy announced today a draft loan guarantee solicitation for innovative and advanced fossil energy projects and facilities that substantially reduce greenhouse gas and other air pollution. The Advanced Fossil Energy Projects solicitation, authorized by Title XVII of the Energy Policy Act of 2005 through Section 1703 of the Loan Guarantee Program, does just that. The draft solicitation will be open for comments from industry, stakeholders, and the public until early September.
The solicitation will support new or significantly improved advanced fossil energy projects and facilities – such as advanced resource development, carbon capture, low-carbon power systems, and efficiency improvements – that reduce emissions of carbon dioxide, methane, and other greenhouse gas pollution. The Energy Department will make available up to $8 billion in loan guarantee authority through this solicitation.
“America needs an all-of-the-above approach to develop homegrown energy and steady, responsible steps to cut carbon pollution, so we can protect our kids’ health and begin to slow the effects of climate change. These investments will play a critical role in accelerating the introduction of low-carbon fossil fuel technologies into the marketplace and reduce greenhouse gas pollution,” said Secretary Moniz. “Fossil fuels currently provide more than 80 percent of our energy, and adopting technologies to use them cleanly and more efficiently is critical to our all- of-the-above approach.”
Section 1703 of Title XVII of the Energy Policy Act of 2005 authorizes the Department to support innovative clean energy technologies that avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases. Projects deploying these technologies are typically unable to obtain commercial financing due to high technology risks. Once finalized, this solicitation will be the sixth issued in support of Section 1703.
Within the draft solicitation, the Department has included a sample list illustrative of potential technologies for consideration. The Department welcomes public comment on a range of issues, including technical analysis of the specifications of these as well as other technologies, and their potential to reduce greenhouse gas emissions. The Department also welcomes comments that identify other technologies that the Department should consider supporting through this loan guarantee solicitation. The Department will consider public feedback in defining the scope of the final solicitation.
The Department of Energy’s loan programs are supporting a large, diverse $34.4 billion portfolio of more than 30 projects including one of the world’s largest wind farms; several of the world’s largest solar generation and thermal energy storage systems; one of the country’s first commercial scale cellulosic ethanol plants; the first new commercial nuclear power plant to be licensed and built in the U.S. in three decades; the first two all-electric vehicle manufacturing facilities in the U.S.; and more than a dozen new or retooled auto manufacturing plants across the country. One recipient – Tesla Motors – recently repaid the entire remaining balance on its $465 million loan nine years ahead of schedule. More information is available on lpo.energy.gov.
Let’s see–loan guarantees from the federal government for risky, untried technology that has the potential to “revolutionize” an industry–loans that no bank in their right minds would make on their own without a government guarantee. Kinda sounds like another Obama Solyndra boondoggle, if you ask us.
(1) Penn State Marcellus Shale Law Blog (Jul 3, 2013) – DOE Releases Draft Advanced Fossil Energy Solicitation
(2) U.S. Dept. of Energy (Jul 2, 2013) – Energy Department Releases Draft Advanced Fossil Energy Solicitation to Support Reductions in Greenhouse Gas Pollution