Government's 'green' venture capitalism experiment a failure.
A proposed ethanol plant for Frontier Renewable Resources in the Upper Peninsula has survived a legal challenge filed by the Sierra Club and a Chippewa County resident. But the company building the plant may be one of the biggest green failures in the country.
While countless articles have been dedicated to exposing green failures like Solyndra, A123, LG Chem, Energ1 and others, Frontier, which is a part of Mascoma Corp., has received little media attention. In June, Michigan Capitol Confidential reported that Mascoma said it had "no experience in the markets in which we intend to operate."
As was documented then, the company has received up to $120 million from the state of Michigan and the federal government. The company pledged 70 jobs by the end of 2012, but Mascoma has only a few scattered workers and no plant.
Despite repeated broken promises and projections for a plant in Minnesota, the company was hailed by Michigan politicians.
"Michigan is proud to partner with Mascoma as a part of our commitment to lead the nation in alternative energy production," former Gov. Jennifer Granholm said on Oct. 7, 2008. "This company, and their partners, will create jobs in Michigan."
“I am pleased to have played a role in helping to bring this significant investment to Chippewa County," said former U.S. Rep. Bart Stupak on Oct. 15, 2008.
In late 2011, the company attempted an IPO to launch as a public company. Documents filed with the SEC showed that Mascoma had a $135 million deficit and 86 percent of its revenue stream was from government grants. The CEO made $5 million.
So politicians and bureaucrats pledged $120 million from taxpayers — at least $40 million of which has already been paid — to a company that has “no experience” in the market they are about to enter.
Why should government operate as venture capitalists again?