I have been amazed to read the criticism of local bloggers and pundits on the announcement that the biodiesel plant will not be built here, and blaming many for the stoppage. I was present at the first presentation by NPP at Evansville Planning and most all the rest, and few of the public were present. I know that there was a tremendous response was made by the city, the school district, by community organizations and the regular citizens to support this project----and I believe that the failure was the result of larger forces----worldwide commodity speculation and lack of control that made the investment unfeasible.
I well remember that Babe Ruth struck out more than any other batter in baseball history----and if the city of Evansville succeeds with the crushing plant with its investment of 50 million dollars in direct investment, the batting average will be .500---a fabulous batting average as far as economic development goes.
The good news is that we did gather together in coordinated fashion, ask the right questions, and give the planning committment to the project---and we can remember well how we did it and do it again as soon as possible.
The failure of deregulation is stunning when looked at in the longer view. In 1970, telephone, rotary phone, service cost about $7 per month. Now families in Evansville who have internet, land line, plus cell phones for the family can spend $150 easy for service.
Yes. Maybe my hands are too big for fast texting. And yes, maybe I am old fashioned in that I tend to walk without talking to a real or imaginery person on my cell phone. I realize that it is a necessity for a hip college student to talk constantly on the cell phone between classes.
As for other areas of failure in regulation----the stock market, the airlines, the securitization of mortgages etc, etc. We have paid an extreme price for the deregulation and I join with the Treasury department in calling for regulation and reform. We do not need, however, new laws to stem mortgage fraud---we have laws on that, and the lawsuits could begin in the mortgage foreclosure crisis against brokers anytime the authorities want to begin enforcing the law.
The bubble of corn prices is what caused the NPP project to be unfeasible. When we begin burning food, corn, as a public utility fuel---we need to recognize that it cannot be just up to the gamblers to set the price.
The project prospectus indicated that they were going into the investment "unhedged"---they did not hold call options or put options on corn to hedge the risk either way. I wondered about that at the time, but I think I realize why----If they spent money on options and ended up with a completed project made whole by options----they would be in a position of having an unfeasible project fully built----it is just as well that it be closed with dignity having lost half the position.
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Excellent point. I, too, remember the care with which the Biodiesel project was launched, and all the principles were on board in a good way. I am so disappointed that the project is cancelled.
ReplyDeleteI can admit that I was in favor of something along the lines of an ethanol/biodiesel plant before its original plans were announced. I even thought about "buying" in. I have casually kept up with the progress, or there lack of, and realized last year, this project was dead.
ReplyDeleteA crushing plant is needed for practical purposes beyond biofuels. That is a good sound project.
I think this recent failure is another example of the city being swept away by a "company" who was being speculative with a desperate municipality.
The city has a past and present history of making rash decisions with taxpayers lives and money.
I understand the reason that was given for the pullout, but the price of diesel has doubled since the originally scheduled open date.
Why hasn't the Sanimax biodiesel plant in Deforest shut down? How can they and many others still function, but NPP is left out of the dance? Why, the city of Evansville once again put the cart before the horse.
Mr Obvious. The Sanimax plant uses a different feedstock with a different cost profile that is allowing it to show a profit where a soy oil only plant could not.
ReplyDeleteSecond, the city did exactly what we all ask of it. They "went after business."
The city planned, facilitated and welcomed NPP to town on the recommendation of Landmark, an already established good corporate citizen, employer and neighbor. Between Landmark and NPP the intention is to fulfill all financial obligations to the city and to "make Evansville whole" for the money the city has spent.
In this business climate the greater sin for city leaders would have been to do nothing to facilitate the process because then we'd not only be without the biodiesel plant but we'd have never been considered for the 50 jobs that will come with the crush plant.
That's pretty obvious, too.