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Audit Report: IG-0513

July 16, 2001

Financial Assistance for Biomass-to-Ethanol Projects

The Department of Energy (Department) has the strategic objective of reducing the vulnerability of the U.S. economy to disruptions in energy supplies. As one way of meeting this objective, the Department has had a biomass-to-ethanol (biomass) conversion program for several years. Working under the Assistant Secretary for Energy Efficiency and Renewable Energy, the Office of Fuels Development manages the biomass program, which had a goal to build a full-scale commercial biomass production facility by 2000. To meet this goal, the Department awarded financial assistance to two firms during 1997 and 1998. This assistance was provided through cost-sharing cooperative agreements. One firm has received $4 million and the other has received $10.95 million. The Office of Fuels Development indicated that these were the only two awards that could have led to meeting its program goal.