May 20, 2009

Very in depth look at how Cap and Tax will work; prime example of how Government fails every time; and also how Environazism is just about the Benjamin$.

As stated in my previous post, this all went down pretty much in Carthage MO. So this is a two part Post from two perspectives, one of the local perspective and the second article from today in a more national level. Reading all of this shows you how it really works.

First here is some more background information on the players in this game.

From Wikipedia:

Changing World Technologies (CWT), a privately-held company, was founded in August 1997 by Brian S. Appel, the current Chairman and Chief Executive Officer of CWT and its subsidiaries. CWT was started primarily to develop and commercialize the thermal depolymerization technology, now referred to by the company as "thermal conversion process", developed and patented by Paul Baskis. The process produces renewable diesel fuel from agricultural and livestock wastes.
Baskis has since left CWT, but the company has retained the rights to his patents ...

In 1998, CWT started a subsidiary, Thermo-Depolymerization Process, LLC (TDP), which developed a demonstration and test plant for the thermal depolymerization technology. The plant opened in 1999 in Philadelphia, Pennsylvania.
Another of CWT’s subsidiaries and affiliate companies is Renewable Environmental Solutions, LLC (RES), which was formed in 2000. It is a joint venture between ConAgra Foods and CWT to develop the processing of agricultural waste and low-value streams throughout the world. RES, now wholly owned by CWT, has the "first commercial biorefinery in the world that can make oil from a variety of waste streams,[3] principally waste from the nearby ConAgra Butterball turkey processing plant in Carthage, Missouri. According to Biomass magazine, "CWT’s thermal conversion process is a commercially viable method of reforming organic waste that converts approximately 250 tons of turkey offal and fats per day into approximately 500 barrels of renewable diesel."[4] In addition to other problems, production costs turned out to be $80 a barrel, much higher than the anticipated $15. As of 2006[update], however, the Carthage plant was expected to generate a small profit.[3]

On March 4, 2009 after a failed IPO attempt, Changing world Technologies along with subsidiary Renewable Energy Systems filed for chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York.

Plant closing mixed blessing for Carthage

By Associated Press

Associated Press

Wed Apr 22, 2009, 11:13 AM CDT CARTHAGE, Mo. -

A decision by the owner of a renewable fuel plant to file for bankruptcy last month has brought mixed emotions to a community that has lost not only an odor that tormented it for years, but also about 50 jobs.

Renewable Environmental Solutions owner Brian Appel says he's hoping to reopen the plant that had converted turkey guts, bones and feathers into diesel fuel, but next time he'll use corn oil and grease to produce the fuel.

The turkey waste produced a stomach-churning smell that sometimes blanketed the town and prompted lawsuits from citizens and fines from the state attorney general's office.

Appel spent millions of dollars trying to control the smell, but he couldn't control plummeting energy prices that paid him $1.19 a gallon for oil that cost more than $11 a gallon to produce.

RES came to town as a demonstration plant in 2001, when the $15 million project gained much fanfare for Appel's vision of beginning production the following spring and that eventually technology would let it produce 12 billion gallons of oil a year.

But production didn't begin until 2004, and by May 2005 the plant was processing 270 tons of turkey waste into 300 barrels of oil a day.

Soon hundreds of complaints about odors put the plant in the national spotlight, but not in a good way.

"They promised us no odors when they came in," said Carthage Mayor Jim Woestman. "The odors are so bad that it would buckle your knees."

Then-Attorney General Jay Nixon cited the plant at least seven times for odors, and in December 2005 then-Gov. Matt Blunt ordered the plant to shut down until Appel could figure out how to control the smell.

The next year, Nixon fined the plant $125,000. Though state investigators said the smell was coming from other places, some residents remained certain the odors were still coming from RES and filed lawsuits.

Appel's bankruptcy petition shows that by Sept. 30, 2008, his related companies had a debt of $117.8 million, some of which was caused by the collapse of the renewable fuels industry.

"I wish they could solve the problem," Woestman said, "because it would have been great for the world, but they did not. We didn't want the city of Carthage to be sacrificed for what they were trying to do."

Plant closing mixed blessing for Carthage - Carthage, MO - Carthage Press

The mysterious death of the chicken-fat car

By: Timothy P. Carney
Examiner Columnist
05/19/09 8:21 PM EDT

As President Barack Obama unfurls his fuel-economy standards and Congress takes up global warming regulations, it’s useful to remember that what emerges from environmental policymaking is not necessarily what’s best for the planet, but instead what’s best for special interests.

Consider the epic and somewhat bizarre struggle over clean fuels that ended last week. As usual, special interests were central to the drama. But the antagonists seemed right out of a Monty Python sendup of Washington politics: An oil company, hoping to profit from making trucks run on chicken fat, was thwarted by the soap industry’s lobby.

The chicken-fat story is a cautionary tale about how environmental policy actually gets made.

It began in 2005, when President George W. Bush signed an energy bill including a $1-per-gallon tax credit for “renewable diesel” fuel created through “thermal depolymerization.” Writer Rina Palta reported in the liberal American Prospect that Rep. Roy Blunt, R-Mo., wrote the measure “to benefit a floundering company in his home district that produces boiler fuel from turkey offal, which did not qualify chemically as ‘biodiesel.’ ”

At the time, Congress was eagerly providing subsidies to turn plants and animals into fuel, so it didn’t seem farfetched to boost the cause of fowl entrails. But unintended consequences soon arrived, proving once again that the biggest companies usually find a way to profit from government intervention.

In April 2007, the Internal Revenue Service ruled that Blunt’s tax credit had broader applications. Within two weeks, ConocoPhillips and Tyson Foods saw that the IRS had opened the door for a joint venture to melt chicken, cow, and pig fat into diesel fuel. Conoco Chief Executive Officer James Mulva was honest about his unusual undertaking: “It’s not profitable without the $1 per gallon tax credit,” he said at a news conference.

But this renewable fuel had enemies. First, Democrats didn’t like any subsidy that helped an oil company like Conoco. (Blunt, for his part, said he never wanted to help oil companies, and that the law should be changed.)

Second, business lobbyists were also working to kill the subsidy for chicken fat. The obvious opponents were chicken fat’s competitors — the companies that turn vegetables into diesel fuel. The National Biodiesel Board, which spends nearly $1 million a year on lobbying, pushed hard to ensure the $1-per-gallon subsidy for clean diesel didn’t also apply to the Conoco-Tyson operation.

But the issue of “renewable biodiesel” also turned up on the lobbying filings of the Dial Corporation and the Soap and Detergent Association. Just as ethanol subsidies have driven up the price of food, it turned out that fat-to-fuel subsidies boosted the cost of manufacturing soap, which is also made of animal fat. So Dial and the Soap and Detergent Association, displeased that Tyson now had somewhere else to peddle its fat, also lobbied to kill the chicken-fat diesel subsidy.

While their own interests were obvious, the soap and biodiesel lobbies argued that chicken-fat diesel was not good for the environment. But the Environmental Protection Agency ruled this month that “biodiesel or renewable diesel made from animal fat or used cooking oil results in an 80 percent reduction from carbon emissions versus petroleum diesel,” according to Darling International, a company that deals in animal-fat diesel. Darling added in its first-quarter 2009 report, “That is the highest level of carbon reduction available from any commercially ready fuel.”

Both sides claimed to be aiding the environment. Both had profits at stake. The soap side just had better lobbyists than the chicken side. When Congress rushed the massive Wall Street bailout to passage last fall, it extended many special-interest tax breaks, but it specifically killed the $1-per-gallon break for animal-product diesel, leaving chicken-fat diesel with a subsidy of only 50 cents per gallon. Big soap and big biodiesel had defeated big oil and big chicken.

Last week, Conoco and Tyson announced they were axing their joint venture, at least until the $1-per-gallon credit returns.
Maybe Congress can take a lesson from the chicken-fat story: Stopping the oceans’ rise or cleaning the air are lofty concepts, but behind closed doors, environmental policy is often driven by less ambitious motivations.

The mysterious death of the chicken-fat car Washington Examiner

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