Since its creation, the Department of Energys Renewable Energy Loan Guarantee Program (as established by the 2005 energy bill) has been defined by inaction and obstruction and is largely seen as a complete failure to date in terms of bringing next generation biofuel technologies to the marketplace. Additionally, the loan guarantee program has been raided time and again to pay for other federal programs with little if anything to do with renewable energy. Despite repeated promises to restore funding, money stolen from the program is still MIA. With DOE officials set to testify this week before a Senate committee and defend their inaction, several questions for DOE and members of Congress need to be answered. When do DOE officials anticipate making the necessary changes to the program to make it more accessible to next generation biofuel technologies? As constructed by DOE, the loan guarantee program is unnecessarily discriminatory against biofuel companies, requiring operating data and purchasing agreements for example that are not part of the real world of liquid transportation fuel marketing. Back in October 2009, the Renewable Fuels Association sent a letter to Energy Secretary Stephen Chu listing all the concerns raised by RFAs cellulosic and next generation ethanol company members. Among some these concerns are:
- A requirement for off-take agreements for the fuel for the life of the DOE loan guarantee. Anyone even tangentially aware of fuel markets knows this is simply not how fuel markets operate. This may be effective for power generation technologies, like wind power, but not liquid transportation fuels. The RFA has asked DOE to eliminate this requirement for biofuel companies.
- A requirement for operational and financial data from a commercial-scale facility. This requirement is particularly ironic and unnecessary, as the purpose of the loan guarantee program, at least as outlined by Congress, is to help transition biofuel technologies from demonstration scale to the commercial market. The RFA has urged DOE to recognize that, by definition, emerging technologies may not have commercial scale data and adjust their expectations accordingly.
- A practice of putting applicants that could not meet these out-of-touch requirements back at the end of the queue, rather than allowing them an opportunity to quickly answer any questions raised by their application. The RFA has asked DOE to adjust this practice.