By John M. Broder
WASHINGTON, Aug. 17 – Tucked away among the $3.2 billion in Congressional earmarks in the recently passed energy and water spending bill is a $4 million grant to a small company in suburban Chicago that is trying to solve the problem of capturing and storing carbon dioxide emissions.
The company, Jupiter Oxygen, which is run out of an office park near O’Hare airport, holds potentially valuable patents for burning coal cleanly but has fewer than 10 employees and sparse revenue. As a speculative venture in an embryonic field, it has little access to capital markets, traditional bank loans or federal grants.
It does, however, have powerful friends in Congress, including Representatives Peter J. Visclosky, Democrat of Indiana, and Joe L. Barton, Republican of Texas, who sponsored the earmark and who together have received more than $41,000 in campaign donations from Jupiter Oxygen executives. In all, company officials and family members have given political donations of at least $150,000 in recent years.
The case of Jupiter Oxygen is an example of how companies in a variety of energy-related businesses, solar, biofuels and wind power, are lining up at the federal trough as the government shovels out billions of new dollars to reduce the nation’s dependence on foreign oil and combat global warming.
Enthusiasts call it cutting-edge research on a crucial national priority. Critics of this new genre of federal spending call it “green pork.”
Republicans who opposed the House energy and tax bills that passed 12 days ago say they are larded with giveaways for pet projects in the form of new bonding authority, grants, loan guarantees, tax subsidies and public-private partnerships. When Republicans ran Congress, Democrats accused them of showering billions of dollars on their own favored industries, chiefly oil, gas, utilities and farm-belt ethanol projects.
The new emphasis on renewable and clean energy means a bonanza for windmill builders, energy auditors, cellulosic ethanol distillers, makers of photovoltaic cells and clean coal entrepreneurs.
“All these new technologies are being moved up to the front of the line,” said Frank Maisano, an energy lobbyist with the law firm Bracewell & Giuliani who has represented utilities, wind power firms, oil companies and automakers. “Nobody knows who’s going to benefit completely and there’s a lot of uncertainty about whether this stuff will make it to the finish line at all.”
The federal government has financed research and development of energy technology and alternative fuels for decades, often focusing on basic science, and has a mixed record of incubating winners, including some widely used technologies. Today, because of the growing consensus that the nation must wean itself from imported oil and sharply curb climate-altering carbon emissions, new energy options are in vogue.
Earlier this year, Poet, an ethanol producer based in South Dakota, received a grant from the Department of Energy of up to $80 million to produce cellulosic ethanol fuel from corn cobs and other corn fibers in Emmetsburg, Iowa. The company, the nation’s second-largest ethanol producer (after Archer Daniels Midland, the agribusiness giant), included hundreds of pages of technical and financial information in its application – plus letters of support from 38 members of Congress and dozens of local officials.
“Ethanol is an opportunity for rural development and reducing our dependency on foreign oil,” said Mark Stowers, vice president for research and development at Poet, which used to be known as Broin Companies. “That’s the real reason people wanted to write letters to support the project.”
The SunPower Corporation, a leading solar power company in San Jose, Calif., recently received a $20 million grant under the federal government’s new Solar America Initiative to try to cut in half within five years the cost of installing residential solar power.
Competing against titans like BP Solar, General Electric and Boeing, SunPower received the largest single grant, said Julie Blunden, vice president for public policy. Ms. Blunden estimated the company’s total revenues at $750 million this year.
Jupiter Oxygen, for its part, is trying to show that burning coal at ultrahigh temperatures using nearly pure oxygen can play a major role in reducing the carbon emissions that scientists say are the chief culprit in the warming of the planet.
The company is building a five-megawatt facility to test whether its largely unproven technology can work on a commercial scale.
Mark Schoenfield, Jupiter Oxygen’s senior vice president and general counsel, said the company held patents on parts of the process and had been working with the Department of Energy’s National Energy Technology Laboratory to advance its work.
Mr. Schoenfield said that most of the money for the company’s work had come either from the Congressional earmarks or from its founder, Dietrich Gross, who uses the oxygen fuel technology at an aluminum recycling facility he owns in Hammond, Ind., (which is in Mr. Visclosky’s Congressional district). He said there was little money available from banks or venture capitalists for work that, at this point, is speculative.
“Traditional private financing sources are not interested in the extent of funding necessary,” Mr. Schoenfield said in an e-mail message.
The $4 million earmark for Jupiter Oxygen’s project in the current budget is its third helping of federal assistance, company officials said. In 2005, it received $600,000 for research on retrofitting a coal plant in Ohio. Last year, the company got $7.8 million for work on high-temperature combustion of coal in Indiana and lignite, a form of dirty-burning coal, in Texas. Two Ohio Republicans, Representatives Ralph Regula and David L. Hobson, wrote those earmarks.
Harold Green, Jupiter Oxygen’s chief spokesman, said the company had had little success in winning Department of Energy grants because, he said, the agency preferred dealing with larger, established companies.
“We don’t have the resources the big companies have,” Mr. Green said. “The only place we have to go is Congress. It’s easy to talk to members of Congress.”
The company employs two lobbyists. One of them, Andrew Quinn, a former aide to Representative Steny H. Hoyer, Democrat of Maryland and the House majority leader, says his expertise is in securing federal money for clients. The other, Thomas J. Corcoran, is a former Republican congressman from Illinois who served on the House Energy and Commerce Committee.
Mr. Schoenfield said his company’s campaign contributions were “absolutely not” an incentive or reward for the earmarks. “You support the people who support the projects you believe in,” he said.
An aide said Mr. Barton was traveling and could not be reached to comment. Mr. Visclosky’s office did not return repeated calls seeking comment.
Mr. Regula claimed credit for his role in steering money to Jupiter Oxygen in a 2006 company press release. “I am pleased to have been in a position to help secure the initial funding for this project,” he said.
Thomas Feeley, a manager at the Department of Energy’s technology laboratory, has worked with Jupiter Oxygen and other companies using oxygen technology to reduce power plant emissions. Mr. Feeley said that the approach was one of several the agency was exploring. He said that Jupiter went through the same scrutiny as any firm competing for federal money. He said that Jupiter’s work was promising, but that there was no assurance it would bear fruit.
“Many carbon capture technologies are at a very early stage,” Mr. Feeley said. “It’s way too early to pick winners at this point in time. We are trying to keep a broad portfolio of options.”
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