Scores of companies have received federal loans and grants from President Obama’s 2009 “stimulus” to manufacture an experimental fuel called cellulosic ethanol, which has not been successfully produced in the U.S. and might not even work.

The fuel, which is supposed to come from wood chips, was first pushed and funded by the George W. Bush administration.

Despite the fact that no company has been able to produce the fuel, Congress previously passed a law imposing mandates on oil companies to mix the non-existent cellulosic fuel into gasoline.

Some companies have even been fined by the Environmental Protection Agency for failing to use the non-existent fuel.

A George-Soros financed company attempted to cash in on the government mandate that all oil companies utilize a certain percentage of cellulosic ethanol, which is said to be environmentally friendly.

Qteros, the private Massachusetts company backed by Soros Fund Management, closed earlier this year due to lack of further investment, while other firms are scaling back their production efforts, some backed by “stimulus” money.

Cellulosic ethanol is a biofuel that is supposed to be produced from wood, grasses or the inedible parts of plants.

The 2007 Energy Security and Independence Act signed into law by Bush mandated that oil companies use 500 million gallons of biofuel this year, 3 billion in 2015 and 16 billion annually by 2022. Of those numbers, a significant percentage must be made from so-called lighter environmental stocks, including cellulosic ethanol.

The Wall Street Journal reported some 70 million gallons, or 70 percent of the cellulosic supply to meet the never-reached 2010 mandate, was to come from Alabama-based Cello Energy. In 2009, a jury in a civil fraud case ruled that Cello had lied about how much cellulosic fuel it could produce.

As the EPA quietly scales back last year’s cellulosic fuel requirement to just 6.6 million, there is much speculation about when the fuel can actually be produced.

A Congressional Research Service study recently conceded that the U.S. government “projects that cellulosic bio fuels are not expected to be commercially available on a large scale until at least 2015.”

However, in a strange turn of events, the EPA has actually been fining oil companies for not utilizing the biofuel.

“As ludicrous as that sounds, it’s fact,” said Charles Drevna, who represents oil refiners in a suit against the EPA.

“If it weren’t so frustrating and infuriating, it would be comical,” Drevna told Fox News earlier this week.

Tom Pyle of the Institute of Energy Research, also speaking to Fox News, characterized the cellulosic biofuel program as “the embodiment of government gone wild.”

The Soros-backed Qteros company was created for the very purpose of producing cellulosic ethanol in the U.S. The company’s closure due to lack of further investment may be indicative of whether the fuel can be produced.

Another oil firm, Codexis, recently announced its cellulosic ethanol research collaboration between Iogen and Shell will be terminated June 30.

Scores of firms to produce the fuel were funded by Obama’s “stimulus.” Others were funded by President Bush.

U.S. Energy Secretary Steven Chu announced last July his agency was providing a $105 million loan guarantee to support the construction of cellulosic plant by Poet LLC, the largest U.S. ethanol company.

The Energy Department last year also finalized a $132 Million loan guarantee to support the Abengoa Bioenergy Project to support the development of a commercial-scale cellulosic ethanol plant.

Range Fuels, which was supposed to be the nation’s first producer of the biofuel, recently closed its Georgia cellulosic ethanol plant. Range was funded by a $76 million grant from Bush’s Energy Department and another $80 million loan guarantee from the Department of Agriculture also under Bush. The loan was signed on Bush’s final day in office.

With research by Brenda J. Elliott


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