Tenn. gov: Biofuels project criticism 'outrageous'

Gov. Phil Bredesen says a legislative staff member who attacked a state-backed initiative to turn switchgrass into ethanol is playing politics and endangering chances to land a large investment for East Tennessee.

The report on the University of Tennessee's Biofuels Initiative presented to the Fiscal Review Committee on Wednesday was highly critical of changes in the project since it was first announced.

As originally envisioned, the facility was to produce 5 million gallons of ethanol per year that could be sold to pay the operating costs of the research refinery. Under the current plan, the facility will produce only about 250,000 gallons, enough to determine whether the process of turning switchgrass to fuel will work for a full-size refinery, but not enough to pay the ongoing costs, committee executive director Jim White said.

After the presentation some Republican senators told the Knoxville News Sentinel they were misled when they approved $70 million for the public-private partnership in 2007.

"I'm absolutely crestfallen. This is absolutely not good stewardship of taxpayer dollars," said Rep. Tony Shipley, R-Kingsport.

Bredesen shot back on Thursday saying the changes had been approved in public meetings.

He accused White of acting outrageously by making it seem like the administration was trying to hide something and he had "discovered a great secret."

"I'm more than irritated. I'm mad about this," Bredesen said. "We are very, very close to announcing a very large investment in East Tennessee because of this facility." But now, Bredesen said, the potential investors have threatened to take their project elsewhere if legislators are going to politicize the refinery.

The committee delayed its approval of an amendment to a contract on operation of the facility that involves about $11 million of the funding.

White on Thursday defended his presentation.

"I do not agree that the point of the meeting was to allege a nefarious conspiracy to keep the legislature in the dark," he said.

White said his presentation was factual and it was the legislators who became concerned they were not being kept informed after they learned of the changes.

Genera Energy, LLC President and CEO Kelly Tiller defended the project at the meeting.

Tiller said the refinery has "tremendous potential" and has been integrated into other research and development at UT and Oak Ridge National Laboratory. It has received $15 million in federal funding and 18 million from development partner DuPont Danisco.