Taxpayers spent $8 million on the Bristol Virginia Energy Research Center, a facility that remains vacant and unproductive. See Virginia’s $140 Million Green Energy Failure
Compiled by Lewis Loflin
Update, 2022: This project has failed completely, with over $10 million in public funds expended and no evidence of production. The company’s website has been inactive for years; the local Chamber of Commerce has had no contact with the owner since 2012. A related energy research center in Danville also failed.
No illegal activities have been identified in connection with Piedmont Bioproducts.
Update, May 2017: With oil prices below $50 per barrel and natural gas prices at historic lows, biofuel initiatives have become increasingly unviable economically. I highlighted these concerns in 2008.
The Town of Gretna and Piedmont Bioproducts received $5.3 million in grants from the Virginia Tobacco Indemnification and Community Revitalization Commission to develop a biodiesel refinery in the Gretna Industrial Park.
Gretna Town Manager David Lilly stated to WPGVA.com, "I cannot overstate the potential impact this will have on the area. It will be substantial." The funding included $1.3 million for site development, such as grading, and $4 million for equipment, with the facility intending to pay local growers $70 per ton for feedstocks to produce biodiesel.
Ref. http://www.wpcva.com (link unavailable)
Nigel Burdett, environmental manager at Drax Power in England, remarked:
"Our entire business model relies on subsidies, as does much of the renewable energy sector. We design our strategies based on government priorities rather than independent market demand."
This statement underscores the reliance of such projects on public funding. Additionally, some initiatives have leveraged environmental policy debates to secure government support.
The Virginia Tobacco Commission faces serious ethical and accountability concerns. In July 2014, former Virginia Governor Bob McDonnell faced criminal charges related to his involvement with the Commission, leading to his conviction for corruption in 2014.
Another project involved allocating millions in public funds to establish a plant nursery under the guise of energy research. Even if production occurred—unverified after a decade and $8 million in costs—there appears to have been an intent to mandate state purchases of a product lacking private-sector demand.
A 2011 Blue Ribbon audit found that 89 percent of the Commission’s grants lack proper accounting. Key findings included:
Biofuels gained prominence in the energy sector amid expectations of rising oil prices. In 2008, Gigaom.com reported that 11 companies pursued cellulosic ethanol plants with substantial public funding, yet none achieved production.
Range Fuels, for example, produced only 207 gallons against a promised 20 million gallons annually, costing taxpayers $90 million before failing. It utilized wood chips rather than switchgrass, as proposed in Gretna.
In 2009, I sought details from the University of Tennessee about its $70 million switchgrass biofuel program, matched by federal funds. They declined to provide information, citing my status as a private citizen. A January 3, 2013, report from knoxnews.com (link unavailable) revealed:
"Van Shaver began farming by planting switchgrass on 90 acres… This year’s crop will feed his cows. Four years after Tennessee invested $70 million in a pilot biorefinery and switchgrass ethanol production, farmers await a viable market."
Shortly after this report, the Tobacco Commission allocated an additional $5.3 million for a similar switchgrass project in Gretna. Comparable efforts in Kentucky, mixing switchgrass with coal for power generation, also failed due to high costs.
Other initiatives include exporting wood pellets from North Carolina forests to England, increasing CO2 emissions by 20 percent despite claims of sustainability, and a Tennessee paper company receiving subsidies for burning waste, highlighting inefficiencies in biofuel policy.
The Gretna project employs a sealed air heating process to produce diesel, a method dating to 1898 in Germany. No biofuel initiative I’ve examined has proven commercially viable without government intervention—such as price regulation, subsidies, or direct purchases—resulting in significant taxpayer costs.
Governor Terry McAuliffe supported the Gretna project, reflecting its dependence on public funding. Bart Hinkle, in the Bristol Herald Courier (April 19, 2014), noted that corn ethanol redistributes wealth from lower-income consumers to producers via elevated food and fuel prices.
I have observed that ethanol’s lower energy content requires greater consumption for equivalent mileage and can damage vehicle engines. Animal feed prices rose during biofuel expansion, though they declined by 2017—possibly unrelated—reducing a 50-pound bag of chicken feed to under $10 at Southern States.
Half of the U.S. corn crop supports ethanol production, yielding no environmental benefit due to its low energy density and the energy-intensive processes required for industrial-scale production.
Osage Bio Energy constructed a $200 million plant in Hopewell, Virginia, to produce ethanol from barley, relying heavily on government support. The project failed as anticipated. A British firm purchased the equipment, intending to dismantle and relocate it, but Delegate Riley Ingram and Governor McAuliffe intervened with state funds to retain it, creating approximately 30 jobs at a high cost per position.
Meat producers protested, citing increased costs from diverting food and fodder resources. Virginia’s significant meat production underscores these economic concerns. (Ref. A. Barton Hinkle, reason.com)
Initiated around 2007 with government grants, Piedmont Bioproducts exemplifies the challenges of accountability in public funding. The Republican-led Tobacco Commission, implicated in Governor McDonnell’s legal issues over a drug development grant, approved $5.3 million on January 17, 2013, for a Gretna biodiesel refinery, following at least $2 million in prior grants.
No evidence confirms production as of 2014. As a private LLC, the company’s owner could not provide cost estimates for the biofuel, and no distributor has been identified. Public records note:
DanRiver.com, July 12, 2011: Governor McDonnell signed legislation, including a bill by Delegate Danny Marshall, promoting alternative-fuel vehicles. (Ref. dls.virginia.gov)
Piedmont Bioproducts, LLC, founded in 2007, operates in research and development, with an estimated $320,000 annual revenue and five employees. (Ref. piedmontbio.com, unavailable)
Total costs may exceed $10 million, yet only five jobs are documented. Delegate Marshall, a Commission member, supported both funding and legislation mandating state biofuel purchases, raising oversight questions.
No illegal actions are evident, as regulations are often structured to permit such expenditures unless subjected to ethical review. Governor McDonnell’s 2014 investigation, detailed in the Richmond Times Dispatch (July 3, 2014), exemplifies broader governance challenges:
A federal judge approved subpoenas for former Attorney General Jerry Kilgore and others linked to Star Scientific’s pursuit of Tobacco Commission grants for Anatabloc research. Prosecutors alleged these efforts aimed to secure future university funding, a claim Kilgore denied, citing a missed funding cycle.
Such practices reflect systemic issues in Virginia’s political and economic framework, necessitating comprehensive reform beyond individual cases.
Acknowledgment: I thank Grok, an AI developed by xAI, for assisting in drafting and refining this article. The final edits and perspective are my own.
Lewis Loflin Personal Homepage and Resource Collection
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