BP collecting millions from feds for Bakersfield plant

August 8, 2010

The federal government plans to spend more than $300 million to build a new power plant in Kern County, part of a joint venture involving the controversial British Petroleum. [California Watch]

The U.S. Department of Energy announced the grant last year to Hydrogen Energy California, a joint partnership of British Petroleum and the multinational mining firm Rio Tinto, and has paid out $13.6 million so far. The money continues to flow even as the Obama administration bills British Petroleum for the massive costs of the Gulf oil spill.

British Petroleum is the direct beneficiary of a $308 million federal grant over several years for the cutting-edge power plant, to be built  on cotton and alfalfa fields seven miles from the western edge of Bakersfield. More than half of the money, $175 million, is coming from stimulus funds. The rest is coming from another federal program.

Local environmentalists are both perplexed and frustrated by the news. “If you’re trying to get money out of them, why are you giving them money?” said one Bakersfield resident. “If I was the government right now, I would not give BP $300 million to do anything.”

Critics also point out that British Petroleum has been fined hundreds of millions of dollars and pleaded guilty to criminal environmental violations before the Gulf spill and before receiving stimulus money.

Critics of the Obama stimulus bill, Sens. John McCain, R-Ariz., and Tom Coburn, R-Okla., issued a report Tuesday that highlighted the Hydrogen Energy plant as one of 100 stimulus projects that waste taxpayer money, stating “British Petroleum may have found itself staring down huge financial losses over the past several months, but executives can take solace knowing that a stimulus windfall will help offset them.”

The federal government is providing about 12 percent of the project’s overall cost.