Tuesday, 10 January 2012

Sen. Orrin Hatchs Own Geothermal Solyndra Scandal

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Like many other Republicans, Sen. Orrin Hatch, Utah’s senior Senator, has been a vocal critic of President Obama’s support for Solyndra, the bankrupt California solar panel manufacturer. Once a prime showpiece of “green energy” and one of the top technology darlings of the Obama administration, Solyndra failed spectacularly last year — after having been lavished with $535 million in federal loan guarantees, as well as a $25-million tax break from the state of California.

Sen. Orrin Hatch can be seen here calling Obama’s support for Solyndra a “disgrace” on a September 22, 2011 program with Fox News commentator Greta Van Susteren.

And a costly disgrace it is, one that Republicans are eager to turn into a political albatross around President Obama’s neck in this election year. However, Sen. Hatch, who also stands for reelection in 2012, has his own Solyndra albatross to contend with. And unlike President Obama, Sen. Hatch has the added embarrassment of having a failed, federally financed “green” showcase facility named after him. In gratitude for his unstinting support, Utah-based Raser Technologies named its major geothermal plant in his honor. Sen. Hatch was on hand for the company’s 2008 groundbreaking ceremony for “The Hatch Plant,” another federally financed model of “clean” energy which has filed for bankruptcy.

A company press release on May 9, 2008, entitled, “Orrin Hatch Helps Raser Technologies Break Ground for Utah Geothermal Power Project” delivers kudos to the helpful solon:

Raser Technologies, Inc. (NYSE Arca: RZ) announced today that they held a groundbreaking ceremony for beginning the construction phase of the first geothermal power plant built in Utah in 20 years. Senator Orrin Hatch participated in the groundbreaking ceremony in Beaver County, Utah, along with many other state and county government officials. The planned geothermal power plant is anticipated to produce up to 11 megawatts (MW) of clean renewable energy this year.

Hatch, like many politicians, has tried to have it both ways concerning the supposed crisis of global warming, sometimes expressing skepticism over the claims of the Al Gore extremists, at other times embracing the green label in the name of fighting the alleged dangers of carbon dioxide and other greenhouse gases. The Raser Technologies press release continues:

Commenting at the groundbreaking ceremony, Senator Hatch said, “Today marks a turning point in our energy future. I believe geothermal power will play an increasingly significant role in our nation’s renewable energy plan. New geothermal technology, combined with Raser’s innovative development strategy, can unlock this nation’s vast reserves of geothermal power. If our goal is to reduce greenhouse gases, then increasing our renewable energy production is a must. Utah has one of our nation's largest geothermal resources, and I'm pleased Raser is setting the pattern for our future with today's groundbreaking."

On his own Senate web page, Hatch provides this press release with his comments at the same May 9, 2008 Raser geothermal groundbreaking event:

I want to thank Raser Technologies for inviting me to participate in today’s event. It was an honor for me to help turn over the earth for the first new geothermal plant in Utah in 20 years. Raser Tech is a company that has consistently pushed the envelope to develop, and bring to market, some of our nation’s most advanced concepts in clean energy, and I congratulate this Utah business for being first out of the gate to use the latest technology to convert the earth’s natural heat into the world’s cleanest energy.

Hatch Allied with Obama, Cantwell

Sen. Hatch then sounds like Al Gore or Arnold Schwarzenegger in praising legislation he crafted with then-\Senator Barack Obama. Said Hatch:

Geothermal is clean, green, and abundant especially in Utah. Raser has also been supportive of my recent legislation S. 1617, or the Freedom Act, which is cosponsored by Senators Barack Obama and Cantwell. The Freedom act proposes strong tax incentives for plug-in electric and plug-in hybrid vehicles and for the U.S. manufacture of these vehicles and their technology. My aim with the Freedom Act is to initiate a shift in our transportation sector away from oil and toward electrons.

The following year, in 2009, Hatch did a promotional test drive of a Raser prototype hybrid Hummer on Capitol Hill. Gov. Shwarzenegger made a bigger splash with his similar promotion of the Raser Hummer in the California capital.

Interestingly, the previously cited Raser Technologies press release contains this caution at the bottom of the page, one that Sen. Hatch would have been well advised to have read before jumping aboard the Raser wagon:

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ, including, without limitation, the risks identified in our quarterly report on Form 10-K for the year ended December 31, 2007, as filed with the Securities and Exchange Commission, and all subsequent filings. [Italics in original.]

Shades of Solyndra

As it turned out, the actual results did indeed differ — very significantly — from Raser’s oh-so-rosy “forward-looking statements.” The Hatch Plant has never come close to producing the 11 megawatts it so optimistically (some say fraudulently) projected, and has actually put out a more anemic 5-7 megawatts. Nevertheless, Raser was showered with federal monies. A company press release for February 17, 2010, announced that the company had just been awarded a $33 million U.S. Treasury grant, long after it should have been obvious that Raser was on the ropes.

The press release states that the generous $33million gift from the taxpayers “is provided by the U.S. Treasury Department under the Section 1603 renewable energy grant program created by the American Recovery and Reinvestment Act of 2009. Raser should receive the funds within five business days.”

A little over a year later Raser would be filing for bankruptcy. A Bloomberg article for May 4, 2011 states:

Raser Technologies Inc. (RZTI), the owner of a six-megawatt geothermal electric generating plan in Utah, filed a Chapter 11 petition on April 29 in Delaware and received interim approval yesterday for a $750,000 loan…. The petition listed assets of $41.8 million and debt totaling $107.8 million. The company had revenue of $4.25 million in 2010, resulting in a $71.9 million operating loss. The net loss last year was $101.8 million.

Although Raser’s geothermal field for the Hatch Plant never generated enough heat to be viable, the issue may end up generating enough fire to burn down Senator Hatch’s political house. First elected to the Senate in 1976, Hatch has benefited enormously from being labeled “conservative" by the establishment media. However, political and social conservatives have often been infuriated with his frequent crossing of the aisle to aid (the late) Sen. Edward Kennedy and Senators Charles Schumer, Joseph Lieberman, Barack Obama, et al., in sponsoring big-government legislation and liberal-left appointments.

Utah’s conservative GOP voters gave Hatch’s Republican Senate colleague Robert F. Bennett the boot in 2010, and Hatch knows he is vulnerable on the same issues that did in Bennett. Targeted by Tea Party and GOP activists as “Bailout Bob,” for his support of the Troubled Assets Relief Program (TARP) bailout and other spend-tax-and-borrow votes, Bennett was denied a fourth term in the Senate. Hatch also supported the TARP bailout, which was very popular with the big banks on Wall Street, but very unpopular with the taxpayers on Main Street.

Anxious to avoid Bennett’s fate, Hatch is busily assuring Utah voters that he is the fiscal “hawk” they need in Washington, D.C. to rein in the big spenders. Here’s his message under the heading “Fiscal Reform” on his campaign web page:

We must cut back on the dangerous spending habits of the federal government. I have always maintained that we don't have a revenue problem in this country. We have a spending problem. The only way to reverse this fiscal train wreck is to rein in Washington's out of control expenditures. With a $14 trillion debt, the time is now to make the hard decisions that will put this country back on the right track.

The problem is, up until 2009, when Hatch really began feeling the public anger for his spend-tax-and-borrow votes, he had routinely voted for raising the debt ceiling. Like Newt Gingrich, Hatch has also been a supporter of Fannie Mae and Freddie Mac, and a strong supporter of the federal ethanol subsidies. But as the harmful economic and social effects of the ethanol program have become more widely known and it has become a hot potato, Hatch has tried to distance himself from his earlier record of support for the program.

On The New American’s  Freedom Index, Senator Hatch’s voting record is less than sterling; he attained a dismal 70 percent on our latest tabulation, December 2011 Freedom Index

(Past issues of the Freedom Index for Senator Hatch and other members of Congress may be accessed here.)

Senator Hatch appears to have stirred up quite a few bees in the Beehive State. While many political insiders believe that he is too well connected to suffer the same fate as “Bailout Bob” Bennett, others think this is the year he will feel the sting of betrayed and angry voters.

Related articles:

Senator Orrin Hatch Defends Big Government, Record at CPAC

Orrin Hatch Becomes Target of Tea Party

Solyndra Falls After Acquiring Over $500 Million in Federal Loans

Washington Post: Solyndra Loan Was "Infused" With Politics

Utah GOP Gives "Bailout" Bennett the Boot.

Photo of Raser Technologies geothermal plant: AP Images

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