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Rock Port, Missouri, has home-grown support for biofuels, but the town has been unable to own a piece of the biofuels boom.
Photo: Richard Oswald
Being unable to secure the support of a lender, Heartland Biodiesel of Rock Port, Missouri, just over the hill from Langdon, has thrown in the towel.
After having raised $20 million in private equity and $6 million in Missouri tax credits, Heartland needed another $20 million in loans to complete construction. But sub prime woes and an overall conservative outlook by lenders made it impossible to raise the funds.
It was an accumulation of things that led to Heartland’s demise. Fast-rising material costs are partly to blame. Investors have been slow to accept the project. And with the plummeting U.S. dollar, commodities like soybean oil have skyrocketed in price, making the economics of the project a bit tougher.
So, the Board of Directors of Heartland has given up. They’ve announced that regular investors will receive full refunds. Seed investors — who would have been granted stock on a two-to-one basis as a reward for willingness to accept increased risk — will likely lose most of their investment.
The failure of Heartland doesn’t mean that biofuel development has stopped. What it shows, however, is how difficult it is for small investors and rural communities to participate in the prosperity generated by renewable fuels produced from farm-raised feedstocks. Biofuels are falling under the increasing control of the likes of VeraSun, Cargill, and ADM .
Rock Port, Missouri, wanted to own a part of the ethanol economy, but that’s not going to happen. And so just as the gasoline we purchase comes from Big Oil, the renewable fuels pioneered by farmers and small businesses now come increasingly from Big Biofuel.
For rural communities, it’s really the death of opportunity.
Enthusiasm for Heartland was high here in Langdon. Hundreds of small investors stepped forward, not just to invest for profit, but also to build a local industry that would provide jobs and a reason for people to live here. But bad sub prime loans — and billion dollar losses for the biggest of big banks — have had an impact that reaches to the very core of America. Meanwhile, our leaders seem clueless not only that a financial hazard existed in those bad loans, but about what can be done to prevent similar piracy in the future.
The end of opportunity can be found all around. At least one set of workers I know who are employed by a large multinational corporation here claim to have worked in the same place for their entire adult lives even though that work place has been owned by three different companies. Each time a new company buys out a previous owner, even though the jobs continue, the accumulated retirement of the workers there is lost. One fellow I talked to a couple of years ago said he intended to retire at the age of 59. The reason he gave me wasn’t that he couldn’t or didn’t want to work anymore; it was because he was afraid the company might change hands yet again, leaving him without any retirement at all.
It seems to this farm boy from Langdon that not only has our government lost its compassion; it has lost touch with the people as well. Any time the average American can be victimized on so many different issues like those of credit, health, wages, and retirement, then either our leaders aren’t paying attention, or they are part of the problem.
Months ago, I thought the rising biofuels industry made farm regions like this a “home of renewal.” Now it appears that opportunity hasn’t just been lost. It was murdered.