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Concerns about a $535-million loan guarantee for solar panel maker Solyndra were ignored as the Obama administration rushed the deal, Republicans say.

By Jim Puzzanghera and Stuart Pfeifer, Los Angeles Times

September 15, 2011

Reporting from Washington and Los Angeles—

The Obama administration ignored “red flags” about failed Northern California solar panel manufacturer Solyndra, rushing through a $535-million loan guarantee for the company in 2009 and improperly restructuring the deal last winter in a failed attempt to boost the economy and the green energy industry, House Republicans said.

A House Energy subcommittee released internal administration documents Wednesday showing a push to finish work on the loan package in mid-2009 so that Vice President Joe Biden could announce it. And lawmakers spent four hours grilling two administration officials about the decision to risk so much taxpayer money on Solyndra’s uncertain technology.

“This was a half-billion-dollar mistake,” said Rep. Brian Bilbray (R-Solana Beach).

But the documents failed to produce any smoking guns in a brewing controversy that Republicans are using to try to discredit Obama’s push for additional stimulus spending in his new jobs bill.

FOR THE RECORD:

Solyndra: In some copies of the Sept. 15 Business section, an article about the controversy over a government loan guarantee for solar panel maker Solyndra said that a rush to approve the guarantee came last summer. In fact, documents released by a House Energy subcommittee showed a push to finish work on the loan package in mid-2009. —

Though the documents indicated concerns about Solyndra’s financial prospects, they also showed that its application began moving forward during the Bush administration. The rush, in the summer of 2009, came after the Energy Department had approved the package and was awaiting a final estimate on its budgetary cost.

Obama administration officials defended the decision to back Solyndra in the face of huge investments in solar technology by China. They said the loan guarantee wasn’t rushed and that the company ultimately failed because of unforeseen circumstances: a 42% drop in prices for competing solar panels this year and an economic crisis in Europe that significantly reduced demand.

“It’s a disappointing outcome, but it comes with the terrain of backing innovative technology,” said Jeffrey Zients, deputy director of the White House Office of Management and Budget.

Last year, Obama hailed Solyndra as an innovative company that would use stimulus money to create jobs and help lead the economic recovery. But the firm laid off most of its 1,100 workers Aug. 31 and announced it would cease operations. It filed for Chapter 11 bankruptcy last week.

Two days later, agents with the FBI and Energy Department’s Inspector General’s office raided Solyndra’s Fremont headquarters. The FBI hasn’t said what prompted the search.

Under questioning Wednesday, Obama administration officials said they did not know the focus of the investigation. Lawmakers also said they were in the dark.

But Reps. Henry A. Waxman (D-Beverly Hills) and Diana DeGette (D-Colo.) said they were upset that Solyndra executives said this summer that the company would double its revenue this year.

“I’m perplexed how they could be in my office in July telling me things were looking better and filing for bankruptcy two months later,” DeGette said.

The criminal probe is likely focusing on whether Solyndra executives made misleading statements or omissions in their dealings with government officials, said John Hueston, a former lead prosecutor in the case against Enron’s top executives who now practices white-collar defense at Irell and Manella.

He said he wouldn’t be surprised if the company’s failure caused the FBI to act quickly. Often, a bankruptcy will cause law enforcement to seize evidence that might disappear when the company shuts down.

DeGette said she had not been contacted by the FBI. And Jonathan Silver, executive director of the Energy Department’s Loan Programs Office, said he had no indication Solyndra provided inaccurate information.

“I have no reason sitting here today to believe we were misled,” Silver told the subcommittee.

Two Solyndra executives, including Chief Executive Brian Harrison, were scheduled to testify Wednesday, but canceled because they said they were focused on a potential sale of the company and dealing with the bankruptcy and criminal investigation.

Harrison and Chief Financial Officer W.G. Stover Jr. are scheduled to testify at another hearing next week. Subcommittee chairman Rep. Cliff Stearns (R-Fla.) said he wanted to question Energy Secretary Steven Chu as well.

“You should have protected the taxpayers and made some forceful actions here,” Stearns told Zients and Silver.

Stearns and other Republicans said the Energy Department’s credit committee rejected the Solyndra loan in early January 2009, but it was resurrected after Obama took office later that month and conditionally approved in March.

Documents released Wednesday, however, showed that the credit committee didn’t reject Solyndra’s application. It said a number of “unresolved” issues made a recommendation for approval “premature” at the time.

The credit committee requested an independent market analysis and other research, which Silver said was completed within weeks, allowing for the approval.

With the White House eager to start announcing stimulus programs, a special assistant for Biden sent an email to an Office of Management and Budget staffer on Aug. 31, 2009, asking how they could “help speed along” the Solyndra deal so the vice president could announce it four days later.

The OMB staffer preferred that the announcement be postponed. And another OMB email to Biden’s office complained of “having to do rushed approvals.”

Zients said the approval was not for Solyndra’s loan, but for its budgetary cost. He denied any political influence.

But Republicans charged that political concerns rushed the deal.

“It seems like crony capitalism was trumping the smart decision making … that should have been going on,” said Rep. Steve Scalise (R-La.). “Now there’s $535 million in taxpayer money at risk.”

Zients and Silver also defended the decision to restructure Solyndra’s loan guarantee in February amid the company’s mounting financial problems. Government officials believed the restructuring provided the best chance for taxpayers to recoup their money, Silver said.

The restructuring deal put the government in a secondary position to recover its money in bankruptcy, behind $75 million in new private capital raised by the company. Republicans said that violated the 2005 law that created the loan program, which says government money should be first in line.

Silver said Obama administration lawyers determined that the law applied only to the initial loan guarantee, not to any restructuring.

Rep. Phil Gingrey (R-Ga.) called that a “tortured interpretation.”

Original Article

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The Shreveport-Bossier City housing market is decent and healthy, according to some local real estate agents, though uncertainty still prevents some potential homebuyers from making moves.

Local homes are not significantly more expensive than they have been in the past — a trend that defies the national outlook — but new regulations on loans means first-time homebuyers may have to save more before making a move, according to Coldwell Banker Realtor Sarah Drysdale.

Lending regulations are tighter following the mortgage crisis that rocked the national housing market, requiring good credit scores and a verification of stable employment, Drysdale said. It was significantly easier to secure a loan before the new regulations, she said.

But with interest rates at historic lows — as low as 4 percent — the Shreveport-Bossier City market for the qualified is ripe for picking, according to Century 21 United Broker Manager Barbara Trice.

“This is neither a buyer’s nor a seller’s market. It’s as stable as I’ve ever seen it,” Trice said. “People who aren’t making their moves now are missing an opportunity.”

But with nothing but grim national news concerning the housing market, Trice said fear of the unknown can make people hesitate and cause problems for sellers.

There were 1,784 homes for sale in Shreveport-Bossier City at the end of August, according to data from the Northwest Louisiana Association of Realtors. Last month, 325 homes sold and another 677 came on to the market, according to the data.

Eight percent fewer homes were sold by the end of August than by the same time last year, a drop from 2,705 homes sold to 2,481, according to the data. Those houses spent an average of 72 days on the market, eight more on average than the previous year.

Shreveport-Bossier City homes sold for $176,165 on average this year, a one percent increase from the average price in 2010, according to the Association of Realtors data.

Most of the homes on the market, 762, are being sold for $150,000 or less, according to the data. Another 553 homes are priced between $150,000 and $250,000, 336 are priced between $250,000 and $400,000 and 133 are priced above $400,000.

The national average price for homes has increased steadily and significantly since 2000, Trice said. She said the volume of homes being sold isn’t nearly what it was in between 2005 and 2006 before the recession.

Homes in the New Jersey and Las Vegas markets have been known to remain unsold for a year, Drysdale said.

Louisiana homes haven’t seen the huge appreciation in value that more crowded markets have, Trice said.

Job creators like the Haynesville Shale and Barksdale Air Force Base also have kept people employed, keeping the prices of homes from dropping, she said.

Tammy Dean recently sold her home on Trailridge off Ellerbe Road in southeast Shreveport. She said her home only sat on the market for three months before it was bought.

“Houses here sell quickly,” she said of subdivision. “It’s very family oriented, so I knew it would sell quickly.”

Dean said she was originally asking $229,000 for her 2,230-square-foot home. She said she wasn’t surprised or disappointed when she sold it at $222,000.

She’s looking for more space for her three boys, she said, and is still driving around and thumbing through listings. She said she doesn’t anticipate any major issues finding and buying a new home.

Homes in south Shreveport and north Bossier Parish have been popular in recent months, Drysdale said, adding new construction there has encouraged buyers.

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Lafayette Transit Service began using today five new buses fueled by compressed natural gas.

The five buses cost a total of more than $2.1 million — $430,000 each — and were paid for with matching local and federal funds. Officials plan to use these buses “for the next 12 years,” according to a news release form City-Parish President Joey Durel’s office.

The City-Parish Council approved buying the buses, which officials ordered in September 2010.

Lafayette Consolidated Government is four to six weeks from completing construction on a temporary compressed natural gas, or CNG, filling station. LCG began construction on that station, which it will operate, during September 2011.

LCG will begin within the next two months building a permanent CNG fuel station, and officials expect that station to open to the public during the spring of 2012.

Officials paid for the new buses with money from the “Federal Transit Administration Formula Grant and Discretionary Capital Grants with local matching funds being supplied by LCG,” according to the release. “Federal Recovery Act funds from the American Reinvestment and Recovery Act were also used in this procurement.”

LCG also “has plans to convert some of its current fleet of vehicles to CNG,” according to the release.

“This is a great day for Lafayette,” Durel said in the release. “We are doing our part to support an industry that is so important to Lafayette, and we have made an investment in a cleaner fuel source. And perhaps most importantly, we have found an additional way for this government to save taxpayers’ money.”

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WASHINGTON, DC, Sept. 13

By Nick Snow
Washington Editor

US President Barack Obama pledged to make the wealthiest American businesses and individuals pay higher taxes as he sent his proposed legislation to Congress on Sept. 12.

The package included $50 billion of tax increases aimed at the oil and gas industry that the White House has included in its past few federal budget requests.

“This legislation is fully paid for,” Obama said in a letter accompanying his proposals. “The legislation includes specific offsets to close corporate tax loopholes and asks the wealthiest Americans to pay their fair share that more than cover the cost of the jobs measures.”

The American Petroleum Institute and the National Petrochemical and Refiners Association both expressed disappointment.

The legislation’s Subtitle D, called “Repeal Oil Subsidies”, proposed ending the deduction for intangible drilling and development costs for wells, the tertiary injectants deduction, percentage depletion, the enhanced oil recovery credit, the marginal well production credit, and the oil and gas working interest exception to passive activity rules.

It also proposed not allowing the oil and gas industry to take the federal tax code’s Section 199 manufacturing deduction, and moving the allowable amortization period for geological and geophysical expenditures back to seven years.

US oil and gas companies with overseas operations also would be affected by Subtitle E, “Dual Capacity Taxpayers,” and its two provisions modifying foreign tax credit rules and creating a separate basket treatment for taxes paid on foreign oil and gas income. All of the proposed increases affecting oil and gas would be effective after Dec. 31, 2012.

Industry reacts

“The administration is not just turning its back on oil and gas jobs,” API President Jack N. Gerard said. “It is proposing more taxes on an industry doing one of the best jobs of creating them while also delivering more than $86 million a day in revenue to the government.”

NPRA President Charles T. Drevna said the oil and gas industry represents “some of the biggest taxpayers and biggest employers in America.”

Drevna said industry is not seeking preferential tax treatment but rather wants equal treatment with other companies that get deductions for business expenses.

“The best way to get more tax revenues from energy companies and enable us to hire more American workers is to remove roadblocks preventing us from producing and manufacturing more,” Drevna said.

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Posted: Sep 12, 2011 6:22 PM by Melissa Hawkes KATC

Tonight, the search continues for a missing offshore worker in the Gulf of Mexico. Updated numbers tonight, six have survived, three killed and one is still missing after being forced to evacuate during Tropical Storm Nate.

Originally we told you seven were rescued, but one worker from Bangeldesh died after being taken to the hospital. Among the survivors, New Iberia native Ted Derise Jr. and Jeremy Parfait of Houma.

They were rescued after spending three days in the open seas. The men were doing work for Houston based Geokinetics on a “lift”-boat owned by Trinity Liftboat Services.

Family of Derise said his rescue is a relief. He and Houma resident Parfait, like the other survivors, are in stable condition in a private hospital in Mexico tonight. The workers were rescued on Sunday by the Mexican Navy.

Four of the survivors and one of the dead were found in a boat. The other three survivors and another body were found floating in the water. Officials said the survivors are suffering from bruises, bumps and sun burns after battling through the storm.

As for when Derise will return home, his family doesn’t know but says they are just happy he’s alive.

Mexican authorities have not yet said if Iberia natives Nick Reed and Craig Myers are among the dead or missing.

Pellerin Funeral home has posted an obituary for Craig Myers. http://www.pellerinfh.com/component/obituary/?task=details&oid=208998

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By Richard Thompson, The Times-Picayune

Oil and gas companies are turning attention to a potential new shale play in north Louisiana, giving the state one proven and producing shale formation and two other tracts that are in the early stages of activity, according to Natural Resources Secretary Scott Angelle. Several companies have announced acquisitions of oil and gas leases in the developing Brown Dense shale formation, believed to underlie northern Claiborne, Union and Morehouse parishes, and include parts of southern Arkansas.

The reserves, long thought to be out of reach, are extracted using a technique called hydraulic fracturing, in which a mixture of water, sand and chemicals are pumped into geological formations thousands of feet below the ground to increase the flow of gas to the surface.

Houston-based Southwestern Energy Co. announced in an earnings report in July that it has leased 460,000 acres in the Brown Dense area for $150 million, or about $326 per acre. Last month, Southwestern drilled its first well in the formation in Arkansas, and the company plans to drill a well in Claiborne Parish by the end of this year.

Lease sales were going for about $50 to $100 per acre in Haynesville, a proven shale formation that began booming in 2008.

Southwestern has said it will drill as many as 10 more wells in the Brown Dense next year as it continues to evaluate the play, activity that would likely increase over the next several years if the play proves viable.

“We extensively reviewed the Brown Dense across the region and have indications that the right mix of reservoir depth, thickness, porosity, matrix permeability, sealing formations, thermal maturity and oil characteristics are found in the area of southern Arkansas and northern Louisiana,” Steve Mueller, president and CEO of Southwestern, said in the earnings report.

Oklahoma City-based Devon Energy Corp. confirmed in an Aug. 3 earnings call that it has secured 40,000 acres in the Brown Dense area. The company, which has also been active in the Tuscaloosa Marine Shale area, has received a permit to drill a well in Morehouse Parish, Angelle said.

The Tuscaloosa Marine Shale area, which stretches from Texas through the center of Louisiana and into southwest Mississippi, has also garnered attention in recent months as a potential oil-and-gas producing region, becoming attractive as the price of oil has skyrocketed. In May, Devon said that it had accumulated 250,000 acres in the play, at about $180 apiece.

Even as the Haynesville Shale area surpassed the Barnett Shale area in Texas this year as the highest producer of shale gas in the country, some industry observers say the play remains at a disadvantage since it produces only natural gas, and has one of the highest costs of drilling among shale gas plays in the country.

Meanwhile, the Brown Dense shale area, like the Tuscaloosa Marine shale, is projected to be able to produce both oil and gas. Angelle believes that could help the state retain more drilling work if operators move rigs from the Haynesville Shale area, where he estimated that the drilling rig count this year was “probably down, about 30 percent.”

“The market seems to have a very favorable appetite for” an oil-producing shale play, he said.

In 2010, there were 817 wells drilled in the Haynesville Shale formation, according to state figures.

Angelle said the state became aware of the industry’s interest in the area as operators began acquiring more leases in what he described as a once “very dormant area of Louisiana.”

“When you see leasing activity of some substance, you start to connect the dots,” Angelle said.

Still, it’s tough to compare the benefits of one play to another. “They’re two different kinds of plays,” he said, “but certainly the economic impact of both shale plays are very significant.”

The Brown Dense formation ranges in vertical depths from 8,000 to 11,000 feet, according to Southwestern.

Angelle and others in the industry say it’s too early to tell how much of the hard-to-reach oil is recoverable, though by next year, “you’ll see enough drilling activity to start giving it some confidence of how realistic the play is.”

As drilling activity begins to pick up, Angelle said the state is pressing exploration companies to use surface water and recycled water for their overall project needs. The area of development underlies the Sparta aquifer, which stretches from south Texas, north into Louisiana, Arkansas, and Tennessee, and eastward into Mississippi and Alabama, according to the U.S. Geological Survey.

“We’re making it very clear that service water is going to be the choice for companies in developing these shale plays,” Angelle said. In Haynesville, about 77 percent of companies use surface water, he said.

Shale gas made up 14 percent of the country’s total natural gas supply in 2009, and production of the fuel almost doubled between 2008 and 2009, according to the Department of Energy.

Original Article