Nov 6
2023
Hochul doubles down on a mistake
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by Jim Heaney, editor of Investigative Post
Putting a huge industrial park in rural Genesee County was a mistake to begin with.
The site was too rural. It lacked infrastructure. Auto dependent.
That was the conclusion of a smart-growth analysis mandated by state law. State economic development officials used a loophole to green light the location anyway, and Steve Hyde and his Genesee County Economic Development Center went to work, thanks to some $43 million in state assistance.
For nearly a decade, progress was slow. The site, known as STAMP, or Science Technology and Advanced Manufacturing Park, remained fields and farmland. No tenants were to be had. The first proposed tenant pulled out in 2018 and ditched the United States entirely. Samsung checked out STAMP next, but went with Texas instead.
Finally, in 2021, Plug Power, a hydrogen energy producer that’s never turned a profit, signed on, at quite a cost to the public treasury. The company received $270 million in subsidies for 68 jobs, which works out to $4 million per job.
Repeat: $4 million per job. Most of them truck drivers.
Edwards Vacuum then received subsidies worth $39 million, or $65,333 per job. If those subsidies seem small, keep in mind that Sen. Chuck Schumer personally inserted himself in the negotiations, all but promising the company federal subsidies through the CHIPS and Science Act.
With those tenants in hand, and a lot more land available for sale or lease, the Genesee County Economic Development Center went to work building the infrastructure necessary to service STAMP. Being located in the middle of nowhere, the site needed everything. Water lines. A sewage treatment plant and transmission lines. Road improvements. Etc.
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Hyde and company haven’t been able to get out of their own way.
For one, there’s nowhere to put STAMP’s wastewater. The neighboring Tonawanda Seneca Nation certainly didn’t want it, and neither did the nearby Iroquois National Wildlife Refuge. Hyde and Co. settled on Oak Orchard Creek, across the county line.
But Orleans County has sued, alleging heavy handed tactics by the Genesee County EDC and expressing concerns industrial sewage would harm the creek, which the county relies on for its fishing and tourism industry. Contractors building the sewage transmission pipeline spilled hundreds of gallons of drilling fluid in federally protected wetlands. A court and the U.S. Fish and Wildlife Service ordered a suspension of the work. Then there was our reporting, which found the pipeline project as planned could violate the federal Clean Water Act.
In the face of this, Hochul’s office last week announced a $56 million state grant to pay for completion of the necessary infrastructure. You know, the work being challenged by local authorities, work that could result in violations of federal environmental laws. For a site deemed inappropriate in the first place.
Hochul and Schumer seem hell bent on making STAMP happen. Schumer was in town the week before last touting the tech hub status bestowed to Buffalo, Rochester and Syracuse, putting it in the running, along with 30 other regions around the county, for funding to lay the groundwork for tech-related economic development. (Reason magazine last week termed the tech hubs “an old, tired idea that’s doomed to fail.”)
No doubt, some of tech hub money — if secured, and that’s a big if — would make its way to STAMP.
In the meantime, you can anticipate the Genesee County EDC to use the new state money to not only build out the necessary infrastructure, but to buy its way out of its current legal problems. In addition, I expect Hochul will use the powers of her office to make regulatory issues go away by strong-arming the state’s Department of Environmental Conservation.
In short, the fix is in, using your tax dollars.
In addition to spending that money on infrastructure and lawyers, Genesee County EDC has also shelled out for misleading ads – one might call them disinformation – in local news outlets claiming that its wastewater pipeline won’t harm Oak Orchard Creek. These only appeared after Orleans County sued and Investigative Post reported that the wastewater could violate the law.
Related to all this, an article in American Prospect last week shed light on the history of Plug Power, the hydrogen energy company that’s building a facility at STAMP. As reporter Lee Harris details, Plug Power’s business model relies heavily on tax subsidies. Like the $4 million per job deal it cut at STAMP.
Plug Power’s success as a company relies on a future where demand for hydrogen fuel is far greater than it is today. With President Biden’s Inflation Reduction Act, which contains billions in hydrogen subsidies, Plug Power is hoping that future comes sooner than later, and at the government’s expense. As Harris explains, the company is lobbying hard for the Biden administration to attach as few rules as possible to the hydrogen subsidies. To date, Plug Power has gotten by on subsidies and contracts with companies like Walmart and Amazon that give those firms the right to buy Plug stock at a set price, on the assumption the price will skyrocket once demand goes up.
Creating hydrogen fuel is energy intensive, requiring vast amounts of electricity to split water molecules into hydrogen and oxygen in Plug Power’s case. Climate advocates argue that the creation and use of hydrogen fuel only makes sense if:
- It’s 100 percent powered by renewable energy.
- That renewable energy is located near the hydrogen plant.
- The hydrogen electrolysers only run when the renewable energy is being generated (i.e. when nearby solar panels are humming on a sunny day).
Plug Power is lobbying against the federal government making those guidelines official rules.
Speaking of the feds, the government recently designated seven locations around the county at “hydrogen hubs,” making the eligible for future subsides from Uncle Sam. Plug Power at STAMP was not among them.
The plan for the STAMP facility involves the sale of discounted electricity, not all of it necessarily renewable energy or located nearby. Which is to say there’s potential for the plant to consume more energy than it produces. Which defeats the whole purpose.
Kind of crazy, huh? But this is what passes for economic development policy in New York State.
Not everyone is a loser, however. Hyde is one of the highest-paid economic development officials in the state. Even though he’s only in charge of Genesee County (population 58,000), he earned $249,000 in 2022. That just $1,000 shy of Hochul’s salary.
