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Entries in Energy Department (19)

Monday
Mar192012

GOP: Energy Dept Cut Corners to Lend Arizona Solar Firm $1.6 Billion

US Department of Energy(WASHINGTON) -- House Republicans are preparing to grill Energy Secretary Steven Chu this week over $1.6 billion in loans to finance two massive solar energy projects planned for the desert Southwest, saying investigators have found evidence suggesting the administration cut corners in order to get the loans approved.

"The Department of Energy manipulated analysis, ignored objections from career professionals, and strategically modified loan evaluations in order to force project funding out the door," House Oversight and Government Reform Committee Chairman Darrell Issa, R-California, said in a statement provided to ABC News.

The Department of Energy says Chu will have plenty of material with him to rebut those allegations Tuesday when he comes to the Hill to testify before Issa's committee. Agency officials continued to characterize criticism from House Republicans as misleading attacks that are aimed at scoring political points.

Energy Department spokesman Damien LaVera accused the committee of "inventing false and misleading controversy."

"Decisions made on loan applications were made on the merits after extensive review by the experts in the loan program," LaVera said. "In this case, the Department backed loans for two innovative solar projects that will support hundreds of jobs and provide clean power to tens of thousands of homes."

Two separate House committees have been investigating the Energy Department's loan program for more than a year. Their efforts gathered steam last fall when the first company to receive a federal green energy loan, Solyndra, filed for bankruptcy. This latest review delves into highly technical aspects of the administration's sizeable bet on solar energy and the complex rules set up to help the administration pick the best projects to support.

Energy officials told ABC News the department followed a rigorous process to evaluate each applicant, and the two projects being scrutinized by Issa's committee are some of the most exciting solar ventures underway in the United States. If successful, the massive generating facilities would be by far the largest of their kind in the world -- comprised of more than five million solar panels and 35,000 metric tons of steel.

Republicans say they sifted through tens of thousands of pages of internal records turned over by the Energy Department in response to their requests.

Investigators with the Committee on Oversight and Government Reform said the documents they reviewed have raised new questions about the administration's decision to grant multiple loans to the solar energy giant First Solar, an Arizona-based company that both makes solar panels and assembles enormous solar generating facilities that are then turned over to utility companies to operate. Two of the company's largest projects won federal loans -- generating facilities called Agua Caliente, in Arizona, and the Antelope Valley Solar Ranch in California. (Two more First Solar facilities also qualified for another $2 billion in loan guarantees, making the company one of the nation's largest beneficiaries of the Obama administration's green energy initiative.)

In order to receive the loan money, First Solar had to provide evidence that each project would employ new and innovative technologies to generate energy. Republican investigators said Friday the records they reviewed raised doubts about whether the solar facilities actually do that. Among the documents they cite is an email from a top technical expert inside the department, written less than six weeks before the loans to First Solar were approved, in which he argues that one of the supposed advances -- use of something called a "single axis tracker" -- was actually not all that new.

"Be clear this is not an innovation," wrote Dong K. Kim, the director of the loan program's technical division. "The record will show we did not grade this as an innovation."

Further, Kim writes that "someone keeps changing" internal documents to hold out the tracking technology as innovative. And he warns that "whoever continues to make this change needs to understand that Technical does not support [identifying the trackers] as an innovative component."

A second aspect of the solar plants that the Energy Department identified as innovative had already been in use in over 200 units in Europe, according to the internal documents.

"These facts make clear DOE substantively failed to fund innovation, and instead gambled with $3 billion taxpayer dollars on a single firm, First Solar," said Becca Watkins, an oversight committee spokeswoman.

Energy Department officials told ABC News they believe the Republican investigators are looking at an incomplete picture, saying that Kim -- the author of the email -- ultimately signed off on the technical innovations in the two solar projects, as did senior loan officers who conducted their own thorough review. They also suggested the House investigators have misread the rules -- that the innovations in the solar project meet the requirements.

The fact that some of the innovative technology has been used in projects in Europe, for instance, does not mean the project is not innovative under the rules the department set out to govern the loan program. Technology that has not been used commercially in the United States will qualify as innovative, the rules say. House Republicans counter that the rules explicitly call for technology that is "new or significantly improved."

"For nearly a year, Congressional critics of the Department's loan programs have demonstrated a consistent pattern of cherry-picking individual emails from the hundreds of thousands of pages of documents the Department has provided to Congress with the sole purpose of inventing false and misleading controversy," LaVera said.

"While the law that created the [green energy] loan program does not include any requirement to limit our support to innovative projects, the Department chose to apply a tougher standard that would ensure we were investing in the kind of projects that will help the United States compete for the clean energy jobs of the future," he said. "After a careful review on the merits, the senior career official responsible for the loan program's technical reviews made clear these projects met that standard."

For its part, First Solar officials say it considers the two projects funded with government loans to be revolutionary in the solar industry.

Both are "of unprecedented size and scale that will provide clean power for 175,000 average homes while displacing 360,000 metric tons of CO2 annually -- equivalent to taking 70,000 cars off the road," said Ted Meyer, the company's vice president of global corporate communications.

Both projects are incorporating new technologies to "help to ensure the reliability and stability of transmission systems, which is imperative for the long-term integration of renewable energy into the grid. It is expected that these technologies will eventually become standard in the solar power industry," he said. In addition, he added that the single-axis trackers at the Antelope Valley project "will enable the modules to rotate to capture more sunlight, typically resulting in 15-25 percent more annual energy yield, depending on location."

First Solar officials say they are forecasting more than $3 billion in revenue this year, but they acknowledge the company has suffered along with the rest of the solar industry as European subsidies have dried up and China has flooded the market. The company's stock has been sliding, and has become a favorite for so-called "short sellers" -- investors who are betting on the company to fail. 

Copyright 2012 ABC News Radio

Monday
Mar052012

Feds Will Recover Money From Bankrupt Green Energy Firm

File photo. iStockphoto/Thinkstock(WASHINGTON) -- The Obama administration is welcoming news that federal regulators have approved the sale of Beacon Power, one of several alternative energy companies that struggled financially after being among the first selected to receive loan money from the Energy Department.

The sale of Beacon to Houston-based Rockland Capital means the government will be back in position to recover a significant portion of the $39 million in federal money the company spent before filing for bankruptcy in October.

“Rockland Capital’s purchase of Beacon Power…means that the Department stands to recover more than 70 percent of our investment, and reaffirms that this is a valuable project with important technology,” said Damien LaVera, an Energy Department spokesman, in a statement to ABC News.

“Rockland’s commitment to this project highlights the need to continue to make investments in innovative, commercially viable projects that can help America compete for the clean energy jobs of tomorrow,” LaVera said.

Before Beacon went bankrupt, it had built a flywheel plant in New York that uses unique technology to help make the flow of power on the electric grid more efficient. Under its new ownership, that plant will continue to operate, and plans for a second plant in Pennsylvania will get underway.

The sale was announced a month ago, but needed approval from the Federal Energy Regulatory Commission, which came late last week.

Copyright 2012 ABC News Radio

Monday
Jun272011

Gas Price Drops Eight Cents, Oil Trading at Four-Month Lows  

Jupiterimages/Thinkstock(WASHINGTON) -- In the past week the national average price of gasoline has dropped eight cents to $3.57, according to the Energy Department.
 
This marks the seventh week in a row in which retail gas prices have dropped -- a total of $0.31 in that period.
 
This trend will likely continue as oil settled at $90.61 a barrel in New York trading, continuing a downward spiral in prices sparked by the announcement that the U.S. will be tapping into the Strategic Petroleum Oil Reserve.

Copyright 2011 ABC News Radio

Monday
Jun062011

Gas Prices Continue a Slow Decline

Jupiterimages/Thinkstock(WASHINGTON) -- The Energy Department said the national average price of regular gasoline dropped by a penny during the past week to $3.78 a gallon.
 
This marks the fourth week during which prices have gone down. The four-week period has seen average prices drop by $0.18.
 
Even with the recent drops, gasoline prices are still 38.8 percent (or $1.06) higher than they were a year ago.

Copyright 2011 ABC News Radio

Monday
May232011

Energy Department: Pump Price Dropping

Jupiterimages/Thinkstock(NEW YORK) -- The Energy Department reported Monday that the national average price of gasoline dropped 11 cents in the past week to $3.85. That’s the biggest one-week drop since Dec. 8, 2008 (-$0.11).
 
Even with the steep drop, May has seen gas prices average $3.93 -- the highest level for May in the history of the EIA survey of retail gas prices. Prices are still $1.06 (or 38 percent) above their level a year ago ($2.79).

Oil dropped more than two percent Monday as the dollar strengthened and an energy research group said it expected the growth in Chinese demand for oil to slow later this year. Benchmark crude for July delivery lost $2.40, or 2.4 percent, to settle at $97.70 per barrel on the New York Mercantile Exchange.

Copyright 2011 ABC News Radio

Monday
May162011

Still at Record Levels, National Average of Gas Prices Remain Unchanged

Jupiterimages/Thinkstock(WASHINGTON) -- Despite a big sell-off on the oil future market in the past week, the Energy Department reports that the national average price of gasoline at retail is effectively unchanged at $3.96 a gallon. It’s down just half a penny from last week’s national average price.

Even with the minor move, gas prices are still at near-record levels for this time of year, up 38 percent from their level a year ago ($2.86).

Copyright 2011 ABC News Radio

Wednesday
May112011

As High Gas Prices Cut Demand, Futures Prices Plummet 

Comstock Images/Thinkstock(NEW YORK) -- New government data released Wednesday shows that high gasoline prices are changing the way Americans drive. This week's petroleum status reports from the Energy Department shows an astounding 2.4 percent drop in demand for gasoline when compared to last year.
 
The news drove a massive sell-off in the futures contracts for gasoline. At the end of trading, gasoline futures were 7.6 percent lower than the previous day. At one point during the trading day NYMEX actually halted trading in the gas futures contracts for about five minutes because prices had fallen so much.
 
The government report also showed inventories of gasoline increased by 1.3 million barrels last week. Reduced demand offset minor production problems at refineries around the country.
 
So far, the Mississippi flooding has not affected production at the 10 major refineries in the lower Mississippi area, but oil companies are making preparations to deal with distribution problems that might arise. Many of those facilities use the river and inter-coastal waterways to transport refined products to markets in Florida.
 
The big drop in gas futures pulled oil prices lower as well. Crude contracts settled down 5.5 percent Wednesday (-$5.67) to $98.21 per barrel.
 
AAA's daily measure of gas prices around the country showed little change in the retail prices -- down just two cents from last week.

Copyright 2011 ABC News Radio

Wednesday
Feb232011

Cost of a Barrel Oil Exceeds $100 for First Time in Two Years

Photo Courtesy - Getty Images(NEW YORK) -- Unrest in Libya is driving up oil and gasoline prices in the United States.

For the first time in more than two years the price of oil touched $100 a barrel at the New York Mercantile Exchange and the Energy Department said gasoline hit $3.19 a gallon, the highest it has ever been for a February. 

Those increasing costs threaten economic recovery so the stock market was down throughout much of Wednesday.  Libya is the prime concern but there's also fear what's happening there could spread to other major oil producers.

Copyright 2011 ABC News Radio

Monday
Feb072011

Gas: Highest Retail Prices Ever for February

Photo Courtesy - Getty Images(WASHINGTON) -- The Energy Department reported Monday afternoon that the national average price of a gallon of unleaded has reached $3.132 -- the highest price ever posted during the month of February (data in this series going back to 1990).
 
Back in the record-setting year of 2008, we saw a February price just two-tenths of a cent lower than this. If past is prologue, then this bump isn’t good news. During the summer driving season that year, we were paying the highest prices ever for fueling our cars by the July 4 holiday -- $4.11 a gallon.
 
While crude oil prices jumped last week in a knee-jerk reaction to the uprising in Egypt, they have come off their recent highs during the past few sessions. Oil prices fell $1.55 to settle at $87.48 a barrel in New York trading Monday.
 
Gasoline prices tend to go up quickly when oil prices are rising, and will fall at a much slower pace when oil prices drop. An unfortunate elasticity that works against your pocketbook at the pump.

Copyright 2011 ABC News Radio

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