Government loses millions in foreclosure of failed ethanol plant

by: Jim Strickland Updated:

ATLANTA,None - A boondoggle in Georgia timber country will cost tax payers tens of millions of dollars.

Channel 2 Action News consumer investigator Jim Strickland exposed the risky loans and grants given to a would-be ethanol plant in Treutlen County last spring.

The end result of that investment came this week with a foreclosure on the courthouse steps.

Strickland visited the county in March 2011, when Treutlen County tree farmer, and economic development chair Hugh Gillis predicted the shuttered Range Fuels plant was bound for a sale.

"You don't care who owns it? Really?" Strickland asked.

"It doesn't matter.  I really don't.  We just need the jobs here and we need that plant running here," said Gillis as he stood in a timber field being harvested.

The Range plant outside the city of Soperton was supposed to take timber scraps and turn them into ethanol.  It was also supposed to employ a minimum of 50 people.  It never opened for production.

"People are upset around here about that," said Gillis.

At a foreclosure auction on Tuesday, LanzaTech, a New Zealand alternative fuel company, bought the plant for $5.1 million dollars. 

Strickland has confirmed federal and state agencies had invested $82 million, money now lost. 

A spokesman for the new owners said there's no way to tell when the plant might open.  The number of jobs will be in the teens in the early stages, according to spokesman John Williams.

Strickland got reaction from Georgia Tech alternative fuels researcher Sam Shelton, Ph.D.


"We can always look back.  No question; it was not a good investment,” Shelton said.

Shelton said the Range technology was always in question, but millions in government subsidies were too tempting to pass up.

“It's easy to sell a pot of gold at the end of the rainbow, and when you think you've got a billion dollar winner here, it's easy to convince yourself that you do," he said.

The state of Georgia is on the hook for $6 million of the $82 million in tax money lost.

If the plant does not employ 50 people by 2015, the state can ask for, but not necessarily get, its money back.

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