BP project still receiving taxpayer funds in California despite government’s rhetoric

Chris Moody Contributor
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The federal government may have taken BP to the cleaners for the oil spill on the Gulf Coast, but taxpayers are still footing the bill for a BP energy plant on the other side of the country.

The federal stimulus program awarded the energy company $175 million last year, part of a $308 million taxpayer-funded grant for a hydrogen power plant near Bakersfield, California.

BP listed its total operating revenues in 2009 at $239 billion.

The firm receiving the funds is called Hydrogen Energy California LLC, a joint venture between subsidiaries of BP and multi-national mineral company Rio Tinto. The plant intends to convert coal and other materials into a hydrogen energy source. The government has so far poured in $13.6 million, and the BP project has continued to receive funds over the course of the oil spill disaster. The project is part of BP Alternative Energy, and while it was downsized in 2009, BP has invested around $5 billion in wind, solar and biofuels over the past five years.

Republican Senators John McCain of Arizona and Tom Coburn of Oklahoma cited taxpayer support of the project in their report this week on what they refer to as top 100 most wasteful stimulus projects.

“BP may have found itself staring down huge financial losses over the past several months, but executives can take solace knowing that a stimulus windfall will help offset them,” the report reads, adding that the power plant construction will not begin for another two years. BP Alternative Energy plans on completing the plant by 2015.

Senate Democrats announced Tuesday that they will not move forward with a bill related to the oil spill until after the summer recess, which begins August 9. Senate Majority Leader Harry Reid said he would pursue an energy bill “by the end of the year.”

Update: A Hydrogen Energy California spokesmen explained the cost structure of the project in an email to The Daily Caller Thursday:

The federal cost-share is limited to $308 million, or under 12 percent of the total project costs. A portion of this award is from stimulus funds, and the rest will be from DOE Program funds for demonstration projects. To date $14million of federal money have been invested with the private investors putting in the remainder of the investment (note above approx. 9 to 1 HECA-Federal Government cost share ratio). As the projects advances and meets established milestones the DOE cost share is projected to be fulfilled over several years.

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