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By Samuel R. Avro on Nov 3, 2011 with 18 responses

This Week in Energy: Range Fuels To Declare Bankruptcy?

This Week in Energy is a weekly round-up of news making headlines in the world of energy. Many of these stories are posted throughout the week to our Energy Ticker page.

The purpose is to stimulate discussion on energy issues. Community members should feel free to turn these into open thread energy discussions. Suggestions and news tips are welcome. I (Sam) can be reached at editor [at] consumerenergyreport [dot] com.

Note: Robert Rapier is currently in Washington, D.C. and will be presenting at the ASPO-USA conference over the next few days. If you’re attending the conference or in the area be sure to hit him up.

Range Fuels Saga Coming to a Close?

Range Fuels' cellulosic biofuels plant during construction in Soperton, Georgia. The company closed the facility after producing only one batch of ethanol.

Regular readers of this blog are familiar with the Range Fuels story. Robert Rapier was the first columnist to investigate the company and point out what was wrong, back in February 2010, when he wrote the popular essay: Broken Promises From Range Fuels. The gist of it was “that their progress does not remotely align with their early promises.” Range Fuels later responded to this, and Robert became known as Range Fuels’ Number One Critic. Once the company began to run out of money, the media jumped on the bandwagon and began to pen their criticism. Robert covered the media’s belated coverage early this year: The Media’s Role in the Range Fuels Fiasco.

Now, reports are coming in that Range Fuels is about to declare bankruptcy. How soon? The only thing we know is that OPIS quoted a source familiar with the situation as saying that they “will likely file for bankruptcy in the near future.” The company’s website is offline, so that’s definitely an ominous sign.

Long-Term $100 Oil, DoE Loans, Jatropha Hype Continues to Unravel

Investigation of Oil’s Monopoly, Nukes and Belgium, Cold Fusion

Jon Huntsman wants to cure America’s “heroin-like addiction to foreign oil."

  • Although lagging far behind in the polls, Republican presidential candidate Jon Huntsman made headlines this week in New Hampshire where he unveiled his energy plan. He noted that 10 of the last 11 recessions were preceded by sharp spikes in the cost of oil, and discussed his cure for getting rid of America’s “heroin-like addiction to foreign oil.” Huntsman also spoke of the need to “break oil’s monopoly” by promoting alternative fuels and called for a federal investigation of the “monopoly of the oil industry.”
  • As Belgium plans to switch off nuclear power, an electricity operator is warning of high costs, environmental fallout, blackouts and increased dependency on foreign suppliers. Already a net importer of electricity, seven nuclear reactors in Belgium provide 55 percent of the country’s energy needs.
  • A physicist in Italy claims to have demonstrated a new type of power plant that provides safe, cheap and virtually unlimited nuclear power to the world, without fossil fuels or radiation concerns. The only hitch: Scientists say the method — cold fusion — is patently impossible. They say it defies the laws of physics.
  • Governments in Asia are facing a rocky road in securing energy needs, as they struggle to secure supplies amidst rising oil prices.
  • A group of retired U.S. military officers released a report calling for “immediate, swift and aggressive action” over the next decade to reduce U.S. oil consumption by 30 percent in order to avert a future catastrophe. The report can be viewed here.
  • The wind-power industry is holding its breath over the future of a federal subsidy which awarded 2.2 cents per kilowatt-hour to companies for new wind capacity for the first 10 years it’s online. The production tax credit — set to expire at the end of next year — has been around for nearly two decades.
  1. By Wendell Mercantile on November 3, 2011 at 10:41 am

    Now, reports are coming in that Range Fuels is about to declare bankruptcy.

    1. Did the Department of Energy give any loans or grants to Range Fuels as they did Solyndra and Beacon Power? Beacon Power declares bankruptcy; second loan guarantee recipient to falter

    Beacon Power — which uses large flywheels to store power and help grid operators smooth out dangerous electrical surges — owes the Energy Department $39.1 million and the state of Massachusetts $3.45 million.

    2. What will analyst give as the reason for Range’s bankruptcy? I bet the pundits blame the poor economy, instead of a faulty business model that flew in the face of the laws of thermodynamics.

    [link]      
  2. By Walt on November 3, 2011 at 12:22 pm

    Samuel R. Avro said:


     

    This is encouraging.  If the SEC will not investigate the fraud, I hope they do find something to send fear into those who are spending wildly.

     

    This was also encouraging today for me as a small business who cannot find any financing anywhere…I knew there was a lot more to how much money was handed out after seeing the AMAZING record bonuses the past two years for these companies…and I still cannot find financing.

     

    I hope the largest companies face some audits as to how the money was spent.  It is starting to add up why they would not open their books, and why so bloggers want to discuss finance as part of the problem.  The RollingStone articles by Matt Taibbi was one of the few who really put his job at risk and his livelihood to expose the fraud.  Things are starting to at least become more visible.

    ——————–

    The Veil of Secrecy at the Fed Has Been Lifted, Now It’s Time for Change….

    Meanwhile, when small-business owners were being turned
    down for loans at private banks and millions of Americans were being
    kicked out of their homes, the Federal Reserve provided the largest
    taxpayer-financed bailout in the history of the world to Wall Street and
    too-big-to-fail institutions, with virtually no strings attached.

    Over two years ago, I asked Ben Bernanke, the chairman of
    the Federal Reserve, a few simple questions that I thought the American
    people had a right to know: Who got money through the Fed bailout? How
    much did they receive? What were the terms of this assistance?

    Incredibly, the chairman of the Fed refused to answer
    these fundamental questions about how trillions of taxpayer dollars were
    being spent.

    The American people are finally getting answers to these
    questions thanks to an amendment I included in the Dodd-Frank financial
    reform bill which required the Government Accountability Office (GAO) to
    audit and investigate conflicts of interest at the Fed. Those answers
    raise grave questions about the Federal Reserve and how it operates —
    and whose interests it serves.

    As a result of these GAO reports, we learned that the
    Federal Reserve provided a jaw-dropping $16 trillion in total financial
    assistance to every major financial institution in the country as well
    as a number of corporations, wealthy individuals and central banks
    throughout the world.

    http://www.huffingtonpost.com/…..72099.html

     

    [link]      
  3. By Walt on November 3, 2011 at 12:35 pm

    Wendell Mercantile said:

    2. What will analyst give as the reason for Range’s bankruptcy? I bet the pundits blame the poor economy, instead of a faulty business model that flew in the face of the laws of thermodynamics.


     

    I would say it is 100% pure politics.  Bankruptcy can be very profitable for companies in turn around situations, and my guess is that with the new $1+ Billion dollars Kholsa raised he is just waiting to sweep in at the right time to pick up all the equipment.  I have a good source at a large chemical company in America that said I should consider buying some of the equipment at the Range site.  This tells me someone is sellling or looking for buyers for something there at rock bottom prices.  Filing bankruptcy right now would be a political DISASTER and they will never do this if they can pick up the pieces to avoid audits where all the money has disappeared.

     

    The best solution would be for Khosla to swoop in with cash, settle all the debts for pennies via negotiation rather than a court appointed trustee and see if the problem will disappear….maybe even bring the company back as a reorganization and start producing methanol from waste.

     

    ————————–

    Vinod Khosla likes to buck trends. So
    it’s hardly a surprise that when some startups are reporting difficulty
    raising funds and the solar industry is facing an uncertain future in
    the wake of the Solyndra bankruptcy disaster, the Sun Microsystems
    cofounder has managed to raise $1.05 billion to funnel money into
    cleantech, IT mobile, and Internet companies.

    This is hardly Khosla’s first venture into such territory. In January of 2010, Khosla Ventures raised $1.3 billion, primarily to invest in cleantech. Since its founding in 2004, it has invested in about 50 companies in the space.

    http://www.portfolio.com/views…..-tech-fund

    —————————

     

    The key here is to have access to the billions of cash investors willing to keep putting out the fires and keeping political connections.  The money is on the side lines waiting for deals, but it MUST be tied to political agendas by key political figures OR it should be with conditiions that there will be no SEC or legal consequences if the deals go sour.  The shift of legal indeminifcation clauses are becoming critical in these deals, and where once fraud or implied fraud would exempt the clause many lawyers are trying to shift even fraud caused by management to shareholders or the government.  The courts are now testing these clauses with mortgage companies and banks….we will have to wait and see if the lead underwriters and management can walk from fraud in clean tech.

    [link]      
  4. By rrapier on November 3, 2011 at 1:43 pm

    Wendell Mercantile said:

    Now, reports are coming in that Range Fuels is about to declare bankruptcy.

    1. Did the Department of Energy give any loans or grants to Range Fuels as they did Solyndra and Beacon Power? Beacon Power declares bankruptcy; second loan guarantee recipient to falter


     

    Yes, they did. From the first link in the story where I reported on them last year: Khosla and company made an initial investment that has never been disclosed, they raised $158 million in VC money, got $76 million of DOE grant money, an $80 million loan guarantee from the USDA, and $6 million from the state of Georgia. Finally, they asked for more DOE money and were turned down.

    RR

    [link]      
  5. By perry1961 on November 3, 2011 at 2:14 pm

    “According to a Reuters analysis, major oil companies are beginning to see $100 oil as the new norm.”

    They probably shouldn’t. Libyan production is back to 567k bpd and climbing. Iraq has oil sitting in the ground, because export facilities can’t handle the flow. New offshore platforms start coming online in January. At the same time, growth is slowing in China, and coming to a near halt in the West. More supply and less demand = lower oil prices every time.

    [link]      
  6. By Benny BND Cole on November 3, 2011 at 8:38 pm

    As so much of the globe’s oil is locked up in thug states, $80 oil may be the new norm. Oil there is, but try cutting a deal with Venezuela, Nigeria, Mexico, Saudi Arabia, Iraq, Iran, Russia etc etc etc. The Oil Gods favor authoritarian gong-show nations.

    That said, demand flatlines at $80 to $100. There is a Peak–in demand. Biofuels come on, and so does energy conservation. Sheesh, 50 mpg is the new 30 mpg.
    The Volt is real (even if a commercial question mark so far).

    If Iraq, Iran and Venezuela could re-join the sane world, we would have gluts of crude for decades to come. I am not suggesting pro-American plutocrats should rule those nations–only that law and reason prevail. Which may be too much to ask.

    [link]      
  7. By perry1961 on November 4, 2011 at 6:57 am

    “The Volt is real (even if a commercial question mark so far)”

    The only question mark was in production Benny. October was their best sales month to date, with 1100 sold. I know, it sounds meager. But, that’s what was available. Never mind what Cars dot com says. Those 3000 “available” Volts are for the most part demos, and 80% of those listed sell for more than MSRP. Some dealers still expect $52,000 for a base Volt. I was tickled pink when I saw a listing 12 miles away for a Volt at list price. When I got there, it turned out to be a demo. At least I got to drive one…LOL. I can order one of course. Might, or might not, get it in the next 6 months.

    The 2nd generation Volt, arriving in 2015, will get a $7000 price cut. I’m tempted to wait.

    [link]      
  8. By Optimist on November 4, 2011 at 4:42 pm

    Sheesh, 50 mpg is the new 30 mpg.
    The Volt is real (even if a commercial question mark so far).

    The Volt gets only 35 mpg, when running on gas, ie after ~35 miles. It’s a dud, get used to it.

    The Toyota Prius OTOH…

    [link]      
  9. By Optimist on November 4, 2011 at 4:52 pm

    “According to a Reuters analysis, major oil companies are beginning to see $100 oil as the new norm.”

    They probably shouldn’t. Libyan production is back to 567k bpd and climbing. Iraq has oil sitting in the ground, because export facilities can’t handle the flow. New offshore platforms start coming online in January. At the same time, growth is slowing in China, and coming to a near halt in the West. More supply and less demand = lower oil prices every time.

    Libya? Are you kidding? What difference does 567k bpd make in a 80M+ bpd market? We’re supposed to notice a <1% change?

    Iraq is a much more significant supplier. We’ll see what they can do. If somebody over there doesn’t keep blowing up the pipes…

    The economy is as anemic as it’s been in a century, and oil is still touching $100/bbl. Can only go up from here. What the Chinese forsake, the Indians or Africans will take.

    [link]      
  10. By Optimist on November 4, 2011 at 5:02 pm

    Glad to see it is slowly dawning on people that energy crop is a misnomer (and an oxymoron), after we’ve already identified it as a crime against humanity. Can somebody please explain to these people that feedstocks for fuel production need to be cheaper (at a minimum) than fuels currently in use. Food, per definition, is excluded. Any crop grown on land that may be used for food production is also excluded. The obvious starting place would be wastes (MSW, sewage sludge, CAFO manure, etc.). Feeds we are likely to have more of in future than we have today. Sadly the only underpresented lobby in Washington appears to be the waste lobby…

    And Huntsman is getting desperate for some attention. Don’t worry. At least he’ll be home for Thanksgiving, saving us from having read such nonsense.

    [link]      
  11. By perry1961 on November 4, 2011 at 5:27 pm

    “We’re supposed to notice a <1% change?"

    Europe certainly noticed. Libya was their third largest supplier of crude. Better yet, it was the light variety. Libya was exporting 2M bpd before things fell apart.

    "Europe rethinks dependence on Libyan oil

    Italy and Spain depend on Libya for as much as 22 percent and 13 percent of total crude consumption, respectively, a supply not easily replaced on short notice. "

    http://www.csmonitor.com/World…..Libyan-oil

    [link]      
  12. By perry1961 on November 4, 2011 at 5:38 pm

    “The Volt gets only 35 mpg, when running on gas, ie after ~35 miles. It’s a dud, get used to it.”

    Not if you can go 700 miles on less than half a gallon of gas. That would equate to 1500 mpg. Not too shabby if you ask me.

    http://i.imgur.com/CzTsN.jpg

    [link]      
  13. By Optimist on November 4, 2011 at 5:40 pm

    True, Libya’s customers noticed. As I said before, we sent the Air Force to ensure lower gas prices. In Europe. We are so generous…
    And you can switch from light sweet to heavy sour if you chose to invest in it. Expensive? Maybe. Show stopper? No, not even close.
    In the big picture it is still <1%. Only the lamestream media can get excited about that.

    [link]      
  14. By OD on November 4, 2011 at 5:47 pm

    I can only hope $100 is the new norm for oil. I fear, however, it will be much higher by the end of the decade, if we are lucky.

    [link]      
  15. By perry1961 on November 4, 2011 at 6:18 pm

    2M barrels is close to 5% of total exports Optimist. The point I was making is that production will be back online early next year. At the same time, Iraqi exports will be growing again. The market will notice when several million bpd is added. I doubt oil will stay below $75 for long, but counting on $100/barrel is probably not a good idea.

    [link]      
  16. By Optimist on November 4, 2011 at 10:31 pm

    Not if you can go 700 miles on less than half a gallon of gas. That would equate to 1500 mpg. Not too shabby if you ask me.

    Yeah right, electricity is free…

    [link]      
  17. By perry1961 on November 5, 2011 at 2:40 am

    Electricity is 25-30% the price of gasoline. Better than that, we don’t use oil or any of its derivatives to make it. Electricity will be with us long after oil is depleted.

    [link]      
  18. By Optimist on November 10, 2011 at 5:23 pm

    1. Oil will never be completely depleted. There will always be something left in the ground. Even if we take everything we can reach today, tomorrow’s technology will enable us to reach for more.
    2. Define “we”. Much of the planet use oil to generate electricity. And I bet whoever “we” is supposed to mean, they use fossil fuels to generate electricity. How different is that from oil?
    3. There is probably a reason gasoline can get a higher price than electricity, such as convenience, familiarity and use in existing infrastructure. If electricity takes a bite out of gasoline’s pie, electricity rates will go up and gasoline prices will go down.
    4. Like gasoline, unlike oil, electricity is just an energy carrier, not a source of energy. To address our challenges, particularly susteainability, we must find a way to make all carriers from renewable sources. Arguing about which carrier is better misses the larger point.

    [link]      
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