USDA announces $25 million loan guarantee for manufacture of food & soda sweetener

posted at 3:21 pm on June 19, 2012 by Erika Johnsen

I find myself confused.

The U.S. Department of Agriculture has announced that it will provide a $25 million loan guarantee to support the manufacture of a sweetener found in diet soda. From the USDA press release:

WASHINGTON, June 18, 2012 – Agriculture Secretary Tom Vilsack today announced that USDA has approved a loan guarantee of $25 million to Myriant Corporation to help construct a bio-based production facility in Lake Providence, La.

“This project will support the President’s “all-of-the-above” energy strategy and create job opportunities for American workers,” said Vilsack. “The facility will bring opportunity to an area of Louisiana that has been battered by hurricanes, and has lacked new development. It will also expand a market for farmers.”

The facility will make succinic acid, which is used primarily as a sweetener within the food and beverage industry. Currently it is made from butane, using petrochemicals, but the new plant will convert grain sorghum, an actual food source and a sustainable resource source, into succinic acid and ammonium sulfate. It is expected to produce 15,000 tons per year of succinic acid and 18,000 tons per year of ammonium sulfate.

Myriant is the first bio-based chemical company to receive funding under USDA Rural Development’s Business and Industry Guarantee program, which supports local rural businesses and helps create or retain jobs. …

The Myriant facility also received $44 million in grants from the U.S. Department of Energy and an additional $10 million from the Louisiana State Department of Transportation for infrastructure improvements.

So, let’s get this straight: This Myriant Corporation will receive almost $70 million in federal (read: taxpayer) loan guarantees for the construction of a new facility — which, we’re to believe, is a harbinger of “green job” creation. These “green” workers will manufacture a new type of grain-based succinic acid (but succinic acid nonetheless), a sweetener often used in making diet soda (h/t Joel Gehrke).

I’m pretty sure that diet soda and other such sweetened, processed food products don’t make the cut in the some of the USDA’s signature endeavors, i.e., the “Let’s Move!” campaign and the “MyPlate” nutrition guide in conjunction with First Lady Michelle Obama. I suppose the thinking (if, indeed, there was any) is that this is a new, more natural type of succinic acid, but isn’t the government always telling us that diet sodas contain harmful sodium and other chemicals that many argue cause — oh, I don’t know — cancer?!

Hey, remember when the federal government started to subsidize corn out the wazoo for the production of ethanol in the name of furthering clean energy? And you know how high-fructose corn syrup is now super cheap and in practically everything processed that we eat? Yeahhh.

The hubris, cross-purposes, and unintended consequences from the federal government in planning our lives for us, never ceases to amaze.


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Soylent Green jobs?

teke184 on June 19, 2012 at 3:23 PM

NY to allow 60 ounce drinks again!

KOOLAID2 on June 19, 2012 at 3:24 PM

Bloomberg does not approve, but I’ll just stand here drinking my slurpy.

WhatNot on June 19, 2012 at 3:24 PM

A giant wall needs to be constructed between the lobbyists and Congress.

We can’t tell the difference between the regulators and the regulated anymore. Neither politcial party has the balls to say so….$$$$$.

rickyricardo on June 19, 2012 at 3:26 PM

The part about LA help build new roads I guess makes sense for them locally. The rest is pure BS that we have to pay for it.

gsherin on June 19, 2012 at 3:27 PM

Yes, without loan guarantees, no one will drink diet soda.

NoDonkey on June 19, 2012 at 3:27 PM

The hubris, cross-purposes, and unintended consequences from the federal government in planning our lives for us, never ceases to amaze.

Social engineering…

… works every time it is tried!

/ <—–(do i really need this?)

Seven Percent Solution on June 19, 2012 at 3:30 PM

Follow the money. Who runs Myriant?

Donors of Obama get their kickbacks?

Now will Vilseck and Obama get kickbacks from Myriant and their “green” job employees?

Could this be just another shell game from an Obama crony that will collapse leaving American taxpayers holding the bag like what Solyndra did?

Robert Jensen on June 19, 2012 at 3:31 PM

These toads ever hear of the private sector ?
Nope , guess not .

Lucano on June 19, 2012 at 3:31 PM

The hubris, cross-purposes, and unintended consequences from the federal government in planning our lives for us, never ceases to amaze./blockquote>

Oh, not so amazing…..the consequences are of no importance, thus not unintentional at all.

hawkeye54 on June 19, 2012 at 3:33 PM

“Currently it is made from butane”

YUM!

Opposite Day on June 19, 2012 at 3:33 PM

Green Job$=Any company that get$ $ome Obama Money from his $tash.

wildcat72 on June 19, 2012 at 3:33 PM

Sounds like a sweet deal for Myriant.

NapaConservative on June 19, 2012 at 3:35 PM

These toads ever hear of the private sector ?
Nope , guess not .

I’d guess so. Its an enemy and a direct competitor of BigGov and so must either assimilate or be eradicated.

hawkeye54 on June 19, 2012 at 3:35 PM

+$16 Trillion dollars in debt…

… and it is like the politicians don’t intend to pay a $0.10 of it back.

Seven Percent Solution on June 19, 2012 at 3:35 PM

Louisiana now in play?
/

hillsoftx on June 19, 2012 at 3:36 PM

MO-Cola.

You know its coming.

BobMbx on June 19, 2012 at 3:36 PM

MO-Cola.

You know its coming.

BobMbx on June 19, 2012 at 3:36 PM

Will it come in a big can?

CurtZHP on June 19, 2012 at 3:38 PM

Louisiana now in play?
/

hillsoftx on June 19, 2012 at 3:36 PM

Only if the New Orleans machine from before Katrina were back in place. It has been scattered across Houston, San Antonio, and elsewhere.

teke184 on June 19, 2012 at 3:38 PM

These toads ever hear of the private sector ?
Nope , guess not .

Lucano on June 19, 2012 at 3:31 PM

The EPA has – that’s why they now feel a need to regulate soot along the Houston Ship Channel – just so you can’t have your fuels and petrochemicals and artificial sweeteners

tomg51 on June 19, 2012 at 3:42 PM

“Currently it is made from butane”

YUM!

Opposite Day on June 19, 2012 at 3:33 PM

Pass the sugar please.

kringeesmom on June 19, 2012 at 3:45 PM

If we’re going to have this full-screen pop-under ad on every topic now, I can find another site. No problem.

Like they are going to sell a Prius here anyway.

Adjoran on June 19, 2012 at 3:46 PM

If we’re going to have this full-screen pop-under ad on every topic now, I can find another site. No problem.

Like they are going to sell a Prius here anyway.

Adjoran on June 19, 2012 at 3:46 PM

Adblock Plus and Firefox are your friends.

wildcat72 on June 19, 2012 at 3:49 PM

So how long before Myriant goes bankrupt? The clock is ticking…..

search4truth on June 19, 2012 at 3:50 PM

“Currently it is made from butane”

YUM!

Opposite Day on June 19, 2012 at 3:33 PM

It is obviously a misprint. The correct spelling is “buttane”. Everything Obama does is made out of it.

Archivarix on June 19, 2012 at 3:50 PM

Ha. Just like Chuckie Shumer yesterday trying to get subsidies for NY maple syrup all the while praising NY Mayor Bloomburg for trying to ban corn syrup. How can you take these jokers seriously?

tommyboy on June 19, 2012 at 3:51 PM

Marco Rubio approves.

UltimateBob on June 19, 2012 at 3:52 PM

Will it come in a big can?

CurtZHP on June 19, 2012 at 3:38 PM

LOL!!

chelie on June 19, 2012 at 3:53 PM

Follow the money. Who runs Myriant?

Donors of Obama get their kickbacks?

Now will Vilseck and Obama get kickbacks from Myriant and their “green” job employees?

Could this be just another shell game from an Obama crony that will collapse leaving American taxpayers holding the bag like what Solyndra did?

Robert Jensen on June 19, 2012 at 3:31 PM

I can’t find who owns/runs it, but according to lexisnexis.com, the company filed an IPO a year ago. From the article:

“The timing of the IPO is unusual. Investors have placed a premium on equities with significant earnings in the past year, reasoning that profitable companies will be better-situated to weather any future storms.

Myriant is still a pre-revenue company, generating only $258,000 in gross revenues for the year ending 12/31/2010, according to its registration statement. The company racked-up a net loss of more than $16 million for the year.”

So, yes indeed, follow the money.

jersey taxpayer on June 19, 2012 at 3:54 PM

Where is Clark Grizwold when you need him?
16m beats the heck out of the Jelly of the Month Club!

vinceautmorire on June 19, 2012 at 3:54 PM

Ha. Just like Chuckie Shumer yesterday trying to get subsidies for NY maple syrup all the while praising NY Mayor Bloomburg for trying to ban corn syrup. How can you take these jokers seriously?

tommyboy on June 19, 2012 at 3:51 PM

Maple syrup -> pancakes -> favorite POTUS breakfast food

How can you take these jokers seriously?

I never do. Personal rule.

BobMbx on June 19, 2012 at 3:54 PM

16m beats the heck out of the Jelly of the Month Club!

Should read 25m.

vinceautmorire on June 19, 2012 at 3:55 PM

I guess this is different from the FDA’s 10-year plan to “change the palate” of the American people, costing billions of our money.

Even if the GOP gets all 3 branches in November, will they, can they, stop this madness?

PattyJ on June 19, 2012 at 3:57 PM

“Currently it is made from butane”

YUM!

Opposite Day on June 19, 2012 at 3:33 PM

Butane?! And since it’s an Obamacrony I’m SURE the FDA “Lightsquared” it through approvals and NO problems at all were found with it, right?

wildcat72 on June 19, 2012 at 4:01 PM

…it’s the ENONOMY stupid…!!!

KOOLAID2 on June 19, 2012 at 4:02 PM

The facility will make succinic acid, which is used primarily as a sweetener within the food and beverage industry. Currently it is made from butane, using petrochemicals, but the new plant will convert grain sorghum, an actual food source and a sustainable resource source, into succinic acid and ammonium sulfate. It is expected to produce 15,000 tons per year of succinic acid and 18,000 tons per year of ammonium sulfate.

Not surprising that succinic acid is made from butane. The succinic acid molecule is basically a butane molecule with the the methyl (CH3) groups on both ends replaced with a COOH (organic acid) group. It would take about 7,400 tons per year of butane to make 15,000 tons per year of succinic acid.

So the Federal Government has given Myriant a total of $69 million in order to make 30 million pounds per year of succinic acid, at an average cost (to the taxpayer) of $2.30 per pound of succinic acid, used as a sweetener for diet soda.

A 16-ounce bottle or can (1 pound) of diet soda doesn’t even cost that much, and it’s mostly water!

Forget the Gubmint–I’ll by my diet soda at Wawa.

Steve Z on June 19, 2012 at 4:08 PM

And how is this part of the “all of the above” energy policy? Is it also fuel?

magicbeans on June 19, 2012 at 4:10 PM

Never heard of succinic acid.

Succinic acid is an essential component of all living organisms. If its amount is reduced, it affects many organs and systems, especially the immune system, physical and mental activity of man, because succinic acid is directly involved in the formation of energy needed to sustain the body.
http://www.sympathyc.com/folkmedecine/Succinic_acid.html

davidk on June 19, 2012 at 4:13 PM

Myriant Corporation is headquartered in Quincy, Massachusetts.

Hoover’s identifies the top 3 executives of Myriant as:

Stephen Gatto – Chairman and CEO

A. Cenan Ozmeral – EVP and COO

Ralph Tapia – EVP and CFO

http://www.hoovers.com/company/Myriant_Corporation/rjtyjhi-1.html

Myriant appointed Susan Hager as VP of Corporate Communications and Government Affairs in January 2012.

Now let’s see if any of these people have any connections to President Obama or the Democrat Party.

wren on June 19, 2012 at 4:15 PM

Lets see, the government is busily regulating sugar out of our diets and then the government subsidizes sugar production.

Only a libtard would not realize that the government is full of nitwits.

WestTexasBirdDog on June 19, 2012 at 4:18 PM

If we’re going to have this full-screen pop-under ad on every topic now, I can find another site. No problem.

Like they are going to sell a Prius here anyway.

Please try Firefox as your browser. It’s so much more user friendly. Their ad block feature works great.

LynnB74 on June 19, 2012 at 4:19 PM

According to Myriant’s website they don’t need no sticking government subsidies to be cost-competitive with traditional, petroleum-based chemicals!

Primusprimer on June 19, 2012 at 4:21 PM

From our friends at Wikipedia:

Antipokhmelin is a Russian tablet that allegedly helps to prevent or overcome the negative effects of alcohol consumption and hangover. The main ingredient is succinic acid … .

davidk on June 19, 2012 at 4:21 PM

jersey taxpayer on June 19, 2012 at 3:54 PM

Steven J Gatto is the CEO

magicbeans on June 19, 2012 at 4:21 PM

Marco wouldn’t approve of this at all . Big Sugar gets huge subsidies in Fl .
Sounds like Zero will throw a bone to LA just to spite Fl sugar .
Big gives to republicans !

Lucano on June 19, 2012 at 4:23 PM

From the Myriant website:

Stephen J. Gatto
Chairman & Chief Executive Officer
Stephen Gatto

Mr. Gatto founded Myriant’s predecessor company in 2004 and formed Myriant in 2009. He has been involved in the biotechnology industry for over 19 years, founding a successful biofuels company and serving on numerous Presidential, Congressional and US DOE/USDA committees.

At BC International (now Verenium), Mr. Gatto, in cooperation with Dr. Lonnie Ingram and the University of Florida, spearheaded the development of novel technology for the commercial production of ethanol from cellulose (patent number 5,000,000). Successful pilot operations led to licensing of the technology to two multinational companies.

In 2000 and 2002, Mr. Gatto was appointed by Presidents Clinton and Bush, respectively, to the Biomass Research & Development Technical Advisory Committee. He was also appointed to a Biofuels Ad-hoc Committee chaired by Senator Dianne Feinstein and assisted in the drafting of key aspects of the Energy Policy Act of 2005.

Currently, Mr. Gatto is on the board of directors for BIO, the world’s largest biotechnology organization, serving on the Industrial and Environmental (I&E) section governing board.

He earned an A.S. in Information Services and a B.S. in Marketing, both from Southern New Hampshire University.”

sandspur on June 19, 2012 at 4:46 PM

Let me guess, GEORGE KAISER is an investor in Myriant Corporation.

GarandFan on June 19, 2012 at 5:02 PM

No more comments on this story ?
Notice the shiny post above !

Lucano on June 19, 2012 at 5:09 PM

Here is an interesting article which contains more information about why the deal is important.

The article also provides this tidbit of info about Myriant’s strategic investor:

In Myriant’s case, it has has, since January 2011, a high-visibility strategic investor in PTT Chemical, which invested $60M in the company last year.

http://www.biofuelsdigest.com/bdigest/2012/06/18/myriants-debt-deal-a-light-at-the-end-of-a-long-bio-based-tunnel/

wren on June 19, 2012 at 5:10 PM

Federal loan guarantees are a bad idea regardless of merits of the companies that are given them.

theperfecteconomist on June 19, 2012 at 5:20 PM

Myriant? Follow the money.

petefrt on June 19, 2012 at 5:39 PM

USDA announces $25 million loan guarantee

Is the U.S. subordinated to private investors again?

petefrt on June 19, 2012 at 5:41 PM

“This project will support the President’s “all-of-the-above” energy strategy…”

come again on that?

JusDreamin on June 19, 2012 at 6:37 PM

The hubris, cross-purposes, and unintended consequences from the federal government in planning our lives for us, never ceases to amaze.

Unfortunately, with something the size and breadth of the Federal Government, this is completely unavoidable regardless of the competency of the administrators. Any organization even 1/10th the size will have cross-purposes, redundancies, idiocies galore, inefficiencies, you name it. It is the nature of organizations.

But it is especially horrible in government because they write the laws.

ss396 on June 19, 2012 at 6:48 PM

The question is why the guarantees are necessary. If this process is viable, private investment would have stepped in, glad to have found a growth area. But no, government to the rescue, with the helpless taxpayer footing the bill. This sounds like another ethanol boondoggle, doing more harm than good and costing the taxpayer to do so.

paul1149 on June 19, 2012 at 7:02 PM

If we’re going to have this full-screen pop-under ad on every topic now, I can find another site. No problem.

Like they are going to sell a Prius here anyway.

Adjoran on June 19, 2012 at 3:46 PM

Firefox with AdBlock. I have not seen an ad in years.

stvnscott on June 19, 2012 at 7:12 PM

WASHINGTON, June 18, 2012 – Agriculture Secretary Tom Vilsack today announced that USDA has approved a loan guarantee of $25 million to Myriant Corporation to help construct a bio-based production facility in Lake Providence, La.

OK, I’m just free-thinking here, but — but — what if you give me $25 million, and I will build a processing facility for something called sugar. You’re going to love this. I can literally just grow it out of the ground. Practically. And I’ll spend $100,000 on labels that you can put on cans of coke that say “If you are getting fat, you are drinking this too often.”

The rest I’m spending on cheap women and expensive steak.

Axe on June 19, 2012 at 8:30 PM