When the New Hampshire-based “green energy” company Mascoma Corp. was awarded its first multimillion-dollar grant by the state of Michigan in 2008, it promised to create at least 70 jobs by the end of 2012. Since then, the company has received an addition $100 million from federal government and has only created three jobs.
“This is a bad energy project,” Pat Egan, who lives near the plant in Kinross, Mich., told Michigan Capitol Confidential. “There haven’t been any jobs yet … the politicians are driving them towards a short-sighted approach.”
From 2008: Mascoma CEO Bruce Jamerson, Beth Stanek, General Motors’ director of energy and environment policy, and former Michigan Gov. Jennifer Granholm. (Credit: CNET)
When the people of Michigan were footed the bill for $20 million grant, state lawmakers hailed it as a milestone in the quest for clean, renewable energy.
“Michigan is proud to partner with Mascoma as a part of our commitment to lead the nation in alternative energy production,” former Gov. Jennifer Granholm said on Oct. 7, 2008. “This company, and their partners, will create jobs in Michigan.”
And she wasn’t the only one.
“I am pleased to have played a role in helping to bring this significant investment to Chippewa County,” said former U.S. Rep. Bart Stupak on Oct. 15, 2008.
Rep. Stupak? Oh, we remember him.
“On Dec. 14, 2011, Mascoma announced a cooperative agreement with the federal Department of Energy, in which Mascoma would receive ‘up to $80 million in DOE funding.’ This agreement came in addition to $20 million that Mascoma previously received from the Department of Energy for research and development,” Jarrett Skorup and Matthew Needham report.
“Though jobs projections and plant construction have been wildly exaggerated, the company is preparing to go public. On Sept. 16, 2011, Mascoma filed an S-1 with the SEC in preparation for an Initial Public Offering to raise $100 million,” the report adds.
However, even though the company feels confident enough to go for an IPO, the S-1 filed with the SEC shows that the company has a deficit of over $135 million. Even worse, a full 86 percent of the company’s revenue comes from government grants.
Now correct us if we’re wrong, but a company that depends almost entirely on the feds for revenues and has a deficit of that magnitude doesn’t sound like it’s ready to go public.
Come on Blaze! What do you know?
Think we’re out of line? How about this: “In the company’s filing with the SEC, Mascoma lists as a risk factor that it has ‘no experience in the markets in which we intend to operate.’”
Again, correct us if we’re wrong, but that sounds like an awfully big “risk factor.”
Lee Lynd, founder of Mascoma, works at an experimental ethanol facility (Credit: CNET)
And you know what else? It appears Michigan isn’t the only state to have been seriously disappointed by the “green energy” company.
“In November 2008, Mascoma was awarded a $910,000 grant from the Next Generation Energy Board of Minnesota,” Michigan Capitol Confidential reports.
Then-Gov. Tim Pawlenty announced the grant and said: “The development of Minnesota’s first commercial scale cellulosic ethanol plant is closer to reality because of this joint venture.”
Yeah, that didn’t work out so well for the people of Minnesota. Mascoma’s Minnesota plant was shuttered in 2011 and the state has recovered only 5 percent of the grant money ($48,000).
“It may be too late to get the money back, but we ought to use this as a learning lesson and never step into it again,” said John Frey, a member of the Next Generation Energy Board.
Can’t they learn these lessons on their own dime?