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February 11--  The Wall Street Journal published this article yesterday regarding the Range Fuels project in Soperton which is now closed.
The Range Fuels Fiasco

President Obama's budget next week is expected to include even more subsidies for renewable energy. Before Congress bellies up to that bar one more time, it ought to dissect the fate of Range Fuels and the wood chips fad.

As taxpayer tragedies go, Broomfield, Colorado-based Range Fuels has all the plot elements—splashy headlines, subsidies and opportunistic venture capitalists. Range got its start in 2006 when George W. Bush used a State of the Union address to extol wood chips as a source for cellulosic ethanol that would break America's "addiction to oil." Mr. Bush pledged that with government funding cellulosic ethanol would be "practical and competitive within six years."

Vinod Khosla stepped in with his hand out. The political venture capitalist founded Range Fuels and in March 2007 it received a $76 million grant from the Department of Energy—one of six cellulosic projects the Bush Administration selected for $385 million in grants. Range said it would build the nation's first commercial cellulosic plant, near Soperton, Georgia, using wood chips to produce 20 million gallons a year in 2008, with a goal of 100 million gallons. Estimated cost: $150 million.

The media and political class swooned. Bush Energy Secretary Samuel Bodman attended the plant's groundbreaking in November 2007, hailing Range as a private-sector "pioneer" that would "reduce our dependence on foreign oil." Range was celebrated in the New York Times and Forbes.

In 2007, Congress doubled down by mandating that the U.S. use 100 million gallons of cellulosic ethanol yearly by 2010, and 250 million gallons by 2011—though not a single commercial facility existed at the time. The Environmental Protection Agency explained in a subsequent report that the bulk of that initial 100 million gallons would come from Range Fuels and another Khosla-funded venture, Cello Energy.

By spring 2008, Range had also attracted $130 million of private funding, the largest venture investment in the nation in the first quarter of that year. Investors included such prominent VC firms as Blue Mountain and Khosla Ventures and California's state pension fund, Calpers. The state of Georgia kicked in a $6 million grant, and all told Range raised $158 million in VC funding in 2008.

The result has not been another Google. By the end of 2008 with no operational plant in sight, Range installed a new CEO, David Aldous. In early 2009, the company said production was not expected until 2010. Undeterred, President Obama's Department of Agriculture provided an $80 million loan. In May 2009, Range's former CEO, Mitch Mandich, explained that the problem was that nobody had figured out how to produce cellulosic ethanol in commercial quantities. Whoops.

In early 2010, the EPA said Range would finally produce some fuel in 2010—but only four million gallons, not 100 million, and of methanol, not cellulosic ethanol. So taxpayers have committed $162 million (along with at least that much in private financing) to produce four million gallons of a biofuel that others have been making in quantity for decades. This politically directed investment might have gone to far more useful purposes.

As a closely held firm, Range Fuels doesn't disclose financial details. But Range technical adviser Bud Klepper told Georgia Public Broadcasting last month that the company would create only one batch of cellulosic ethanol of unspecified size—then shut the Georgia plant and lay off all but four employees as it seeks to raise still more money and work through some technical issues. A Range Fuels spokesman didn't return calls seeking more details.

As for current Range CEO Mr. Aldous, he's blaming this failure on—brace yourself—Washington's failure to impose a tax on carbon via cap and trade. "The critical issue is really that there's no mechanism to price carbon today," he told a Colorado newspaper. He also blamed "public apathy toward green fuels."

Apathy? How many other products get the Presidential seal of approval, taxpayer subsidies, forced-purchase mandates and glowing media attention?

As for Mr. Khosla's other great cellulosic hope, Cello Energy filed for bankruptcy last year. The EPA, which had projected that Cello would create 70 million gallons, has dropped Cello from its list of potential suppliers. More broadly, the EPA last year had no choice but to reduce the government's 100 million gallon target for 2010 to 6.6 million gallons. It is also fiddling with the definition of what qualifies as a "cellulosic" fuel. Perhaps Newt Gingrich will ask EPA to let corn ethanol make the cut.

If there's a silver lining here, it is that the folly of this exercise in corporate welfare has been exposed so quickly. There is no excuse now for throwing more money after bad, or to listen to more self-serving pleas from superrich investors who want taxpayers to finance their politically correct attempts to get even richer.