Federal spending on a clean energy project planned for west of Bakersfield has ground to a halt, at least temporarily, as regulators await documentation proving the project is still viable, a 17 News investigation has learned.
The Department of Energy pledged roughly $408 million to help build the Hydrogen Energy California plant near Tupman.
Five years later after that pledge was made, the owner of the project, SCS Energy, has spent about $153 million of that federal taxpayer money from the stimulus program aimed at creating jobs with shovel-ready projects after the recent recession.
But no shovel has hit the ground and only 27 jobs have been created.That's $5.5 million per job.
"It's a waste,” said Tom Frantz of the Sierra Club. “I hope people learn a lesson and don't try that type of project here again."
The $4 billion plant would create hydrogen gas by burning coal. The hydrogen gas would then be used as a fuel to produce electricity. The plant also will produce carbon dioxide, a greenhouse gas that would be captured and used to boost nearby oil production.
"It's good for the state it's good for the nation,” HECA Spokeswoman Tiffany Rau said in April.
17 News placed more than a half dozen calls over the last four months trying to get an update from parent company SCS Energy about HECA. Rau eventually emailed back to say the HECA team is tied up and it was not a convenient time for an on-camera interview. HECA backers had nothing new to report but insisted SCS Energy planned to move forward with construction on the project in 2015.
But the HECA project faces a slew of serious hurdles including what to do with the plant's main byproduct: carbon dioxide. It's a greenhouse gas that must be captured and not released into the atmosphere for HECA to qualify as a clean energy project. The tentative plan was to ship the carbon dioxide to a yet-to-be built facility operated by Occidental Petroleum. The gas would be used in a nearby field to help tease oil out of the ground.
But Occidental Petroleum dissolved, jettisoning its California oil assets into a separate company called California Resources Corp. Representatives for California Resources Corp. also declined to be interviewed on camera for this story.
"The company is not currently in negotiations with the developer of the Hydrogen Energy California project. Therefore, we have nothing to add to this story," spokeswoman Holly Arnold wrote in an email.
The HECA plant also requires coal to burn, and too is embroiled in controversy. The City of Wasco approved the expansion of the Savage coal facility in March to increase its annual shipments from 900,000 tons to 1.5 million tons to help facilitate the HECA plant's needs. But Franz and the Sierra Club have sued Wasco, saying a proper environmental review was never performed.
SCS Energy is paying savage $35,000 a month for the option of using the coal and has paid close to $100,000 to help Savage Coal fight the suit.
"With a lack of transparency and accountability and with the millions of dollars of taxpayer money, why would you invest taxpayer money if you didn't have the project being viable?" said Rep. Kevin McCarthy (R-Bakersfield).
None of those misgivings has slowed the spending of federal money awarded to the project under the American Recovery and Reinvestment Act of 2009 in the throes of the recession.
17 News filed a flurry of requests with the Department of Energy seeking detailed records of where your money was spent. After months of waiting and appeals and our request being directed to the wrong place several times, we received a ream of reports with key portions blacked out like a list of risks the plant poses and possible solutions.
Also blacked out, the hourly rate and compensation of SCS Energy executives and employees paid in part under the federal grant. That's a HECA business secret, federal regulators said.
SCS Energy was paying $18,000 a month for an information center on Front Street in Buttonwillow, more than $37,000 over five years. Today the building sits empty.
And taxpayers shelled out $3,100 a month to rent office space in a legal firm up in San Francisco and almost $4,000 a month for an office in Concord, Mass.—SCS is headquartered.
Spokeswoman Tiffany Rau's consulting company has consistently billed the government around $18,000 … more than a half million dollars all told.
Records show more than $10 million in taxpayer money went to purchasing credits to off-set the estimated 500 tons of pollutants HECA plans to release in the air every year.
And there's $97,000 that went to consultant Daniel P. Schrag. The Harvard professor is also a member of the President Obama's Council of Advisers on Science and Technology. Schrag has is a big fan of the project even though in June of last year he urged the Obama administration to 'wage a war on coal'. Taking HECA money and advocating against coal does not create a conflict, Schrag said.
“Long before I met them, I published extensively on this and I have been a broad fan of this technology,” he said. “Nobody could pay me enough money to just lie about this type of technology. That is certainly not enough money to make me just fabricate information. My reputation and my credibility are too important.”
Although the project could still be viable, critics say if the plant is never built ... it will amount to a colossal waste.
“Why would you invest taxpayer money if you didn't have the project being viable,” asked McCarthy, the Congressman who represents the district. “Who is making that decision? Because the taxpayer didn't get to make that decision.
“That's one of the reasons I voted against the stimulus,” he said.
There is no deadline on when the federal funds have to be used or withdrawn.
The Department of Energy pledged roughly $408 million to help build the Hydrogen Energy California plant near Tupman.
Five years later after that pledge was made, the owner of the project, SCS Energy, has spent about $153 million of that federal taxpayer money from the stimulus program aimed at creating jobs with shovel-ready projects after the recent recession.
But no shovel has hit the ground and only 27 jobs have been created.That's $5.5 million per job.
"It's a waste,” said Tom Frantz of the Sierra Club. “I hope people learn a lesson and don't try that type of project here again."
The $4 billion plant would create hydrogen gas by burning coal. The hydrogen gas would then be used as a fuel to produce electricity. The plant also will produce carbon dioxide, a greenhouse gas that would be captured and used to boost nearby oil production.
"It's good for the state it's good for the nation,” HECA Spokeswoman Tiffany Rau said in April.
17 News placed more than a half dozen calls over the last four months trying to get an update from parent company SCS Energy about HECA. Rau eventually emailed back to say the HECA team is tied up and it was not a convenient time for an on-camera interview. HECA backers had nothing new to report but insisted SCS Energy planned to move forward with construction on the project in 2015.
But the HECA project faces a slew of serious hurdles including what to do with the plant's main byproduct: carbon dioxide. It's a greenhouse gas that must be captured and not released into the atmosphere for HECA to qualify as a clean energy project. The tentative plan was to ship the carbon dioxide to a yet-to-be built facility operated by Occidental Petroleum. The gas would be used in a nearby field to help tease oil out of the ground.
But Occidental Petroleum dissolved, jettisoning its California oil assets into a separate company called California Resources Corp. Representatives for California Resources Corp. also declined to be interviewed on camera for this story.
"The company is not currently in negotiations with the developer of the Hydrogen Energy California project. Therefore, we have nothing to add to this story," spokeswoman Holly Arnold wrote in an email.
The HECA plant also requires coal to burn, and too is embroiled in controversy. The City of Wasco approved the expansion of the Savage coal facility in March to increase its annual shipments from 900,000 tons to 1.5 million tons to help facilitate the HECA plant's needs. But Franz and the Sierra Club have sued Wasco, saying a proper environmental review was never performed.
SCS Energy is paying savage $35,000 a month for the option of using the coal and has paid close to $100,000 to help Savage Coal fight the suit.
"With a lack of transparency and accountability and with the millions of dollars of taxpayer money, why would you invest taxpayer money if you didn't have the project being viable?" said Rep. Kevin McCarthy (R-Bakersfield).
None of those misgivings has slowed the spending of federal money awarded to the project under the American Recovery and Reinvestment Act of 2009 in the throes of the recession.
17 News filed a flurry of requests with the Department of Energy seeking detailed records of where your money was spent. After months of waiting and appeals and our request being directed to the wrong place several times, we received a ream of reports with key portions blacked out like a list of risks the plant poses and possible solutions.
Also blacked out, the hourly rate and compensation of SCS Energy executives and employees paid in part under the federal grant. That's a HECA business secret, federal regulators said.
SCS Energy was paying $18,000 a month for an information center on Front Street in Buttonwillow, more than $37,000 over five years. Today the building sits empty.
And taxpayers shelled out $3,100 a month to rent office space in a legal firm up in San Francisco and almost $4,000 a month for an office in Concord, Mass.—SCS is headquartered.
Spokeswoman Tiffany Rau's consulting company has consistently billed the government around $18,000 … more than a half million dollars all told.
Records show more than $10 million in taxpayer money went to purchasing credits to off-set the estimated 500 tons of pollutants HECA plans to release in the air every year.
And there's $97,000 that went to consultant Daniel P. Schrag. The Harvard professor is also a member of the President Obama's Council of Advisers on Science and Technology. Schrag has is a big fan of the project even though in June of last year he urged the Obama administration to 'wage a war on coal'. Taking HECA money and advocating against coal does not create a conflict, Schrag said.
“Long before I met them, I published extensively on this and I have been a broad fan of this technology,” he said. “Nobody could pay me enough money to just lie about this type of technology. That is certainly not enough money to make me just fabricate information. My reputation and my credibility are too important.”
Although the project could still be viable, critics say if the plant is never built ... it will amount to a colossal waste.
“Why would you invest taxpayer money if you didn't have the project being viable,” asked McCarthy, the Congressman who represents the district. “Who is making that decision? Because the taxpayer didn't get to make that decision.
“That's one of the reasons I voted against the stimulus,” he said.
There is no deadline on when the federal funds have to be used or withdrawn.