News Story

Granholm Green Energy Handout: A Glowing Promise And Cattle Feed

After getting millions from taxpayers, Alpena biogas refinery now makes a livestock ingredient

At its launch in 2009, an operation called the Alpena Prototype Biorefinery was lauded by Gov. Jennifer Granholm, the federal government and managers in the corporate welfare arm of Michigan’s state government as the future of green energy.

The plant still existed as of February 2021, according to various reports, but it appears nowhere close to helping Michigan become, in Granholm’s words, “the alternative energy capital of the world.”

The plant has received millions of dollars in taxpayer subsidies to produce energy from nonconventional sources. But it is instead making wood molasses to feed livestock, according to the latest reports in 2021.

Understanding how a project born amid promises of a becoming an energy source became a producer of an obscure agricultural product is not easy task.

Sporadic reports in local news media indicate the original company was sold to new owners. And according to The Alpena News, the city is seeking back taxes owed by the original owner, called American Process Inc. The company also defaulted on a subsidy deal with the Michigan Economic Development Corporation, the state’s corporate welfare arm.

One media report says that 33 jobs were created with the taxpayer grants, but by 2015, the company suspended operations and quit producing ethanol. The plant reopened in March 2016 and began producing wood molasses. The company breached its agreement with the state when it stopped producing ethanol, according to The Alpena News, and thus lost its tax-exemption deal with the MEDC.

The local newspaper also reported that the Alpena refinery was bought by GranBio, a Brazilian company. As of February 2021, the city of Alpena was still pursuing over $800,000 in back taxes from the current and previous owners, going back to 2016.

Alpena City Manager Rachel Smolinski did not return an email asking about the status of the biorefinery.

The Alpena biorefinery is not the only Michigan renewable energy scheme to be launched on a wave of promises and publicity and then sink out of sight when the promises went unfulfilled.

“We are continuing to diversify Michigan’s economy through the development of green energy technologies,” Granholm said when announcing that the area around the Alpena facility had been designated a tax-exempt Renewable Energy Renaissance Zone. The designation allowed the company “to operate free of virtually all state and local taxes for 15 years,” according to the MEDC.

Companies that receive the designation often received multiple subsidies, and this project was no exception.

American Process, Inc., original owner of the refinery, was awarded $4 million by the Michigan Economic Development Corporation in 2009, and $22 million by the U.S. Department of Energy under the Obama administration stimulus program.

“This grant, in support of one of our Centers of Energy Excellence, will bring 160 jobs to the Alpena area and strengthen Michigan’s efforts to be a leader in the development of the next generation of biofuels,” Granholm said in 2009.

Greg Main, president and CEO of MEDC, also stated in 2009, “Developing and harnessing green energy sources in Michigan is critical to securing a strong economic future.”

When Granholm attended a ribbon cutting ceremony at the plant, she said, “We are here today celebrating that Alpena has become a center for clean energy excellence. This plant is not just good for Alpena, it is good because it provides great hope for the great future of waste-to-energy.”

The U.S. Department of Energy also touted the promises in a statement that read, “In the future, the Alpena Biorefinery may also be hired by other innovators to evaluate emerging conversion technologies for the growing U.S. bioindustry.” The department has not updated information on its website to reflect on the company’s current activities in producing a cattle feed input.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.