"Meet the new boss, same as the old boss," said the Who in their 1971 classic song "We Won't Get Fooled Again." It's a powerful way of stating that the more things change, the more things remain the same.
Mississippi apparently got fooled again, as it's prepared to give $15 million in tax breaks to a British-based biofuel company that plans to build a $300 million refinery in Natchez.
The only advantage to this over past deals is that taxpayers won't be on the hook with millions in interest-free or low interest loans. Building a biofuel refinery in the face of low crude oil prices that are likely to stay there thanks to the shale oil revolution makes little sense.
Speaking of past deals, remember KiOR? The company, which was supported by venture capitalist Vinod Khosla's firm, promised to be able to wood chips into gasoline and diesel fuel. The company received a $75 million loan from taxpayers in 2011 to build a plant in Columbus and it had plans to build another, larger refinery in Natchez. At the time, gasoline was $3 per gallon and the shale oil revolution was still years away on the horizon.
Then-Gov. Haley Barbour said KiOR's formula was like spinning straw into gold. The problem was it was in reverse, as the taxpayers gave KiOR plenty of gold and received only straw in return.
The plant never met its production goals from its proprietary formula. After it opened in 2012, the Columbus plant was never able to achieve a steady production state and was shut down just two years after opening.
According to the company, the plant had a capacity of 13 million gallons of gasoline and other fuel products, but sold only 5,000 gallons of gasoline, diesel and fuel oil in 2013 and 39,000 gallons in the first three months of 2014 before shutting down. That adds up to 0.3 percent of the plant’s capacity.
Now the $230 million plant has been scrapped for a few million dollars and state and Lowndes County taxpayers will likely receive pennies on dollar in bankruptcy court proceedings.
Then there is the case of Stion Solar, which received a $75 million loan in 2011 to build a plant in Hattiesburg and is now closing up shop because it couldn't compete with cheaper, foreign-made solar panels. Khosla Ventures had a controlling interest in Stion, which still owes taxpayers $74.8 million and has paid $11 million in interest.
Two other green ventures, Greentech Automotive and Twin Creeks Solar, also received state and local tax breaks and both have shuttered their facilities in Mississippi. Twin Creeks never produced a single solar panel while Greentech's plant never released the number of electric cars that it built in the plant near Tunica. Twin Creeks reached a settlement with the state, but the state will have to sue Greentech to get back $6 million in taxpayer funds.
There's nothing wrong with innovation, but if a can't-miss new idea can't get private investors to buy in, why should our state government take the chance with taxpayer funds? It's not the proper role of government to be venture capitalists as politicians try to buttress their resumés as "job creators."