As some of you may know, I worked around many kinds of inventors in my career. I watched men chase inventions small and large as they tried to get rich with the next big idea. I obtained grant funding for many research projects for ideas to save the environment and enhance municipal funding. Most of the time innovative technologies didn’t pan out, and for those that did, few brought riches to the inventor. This is the story of how I came oh so close to making a fortune on what I thought was a sure thing. The facts are true, though some of the names have been changed.
My wife, Annie, worked for Lou Smeltzer in 1998. Lou was a long time idea guy credited with several inventions for boat construction methods and stormwater treatment mechanisms. Lou had a friend named Eugene Smith; a mechanical engineer infatuated with improving the performance of car engines.
I heard reports from Lou about Eugene’s work to develop a new gasoline additive to replace Methyl Tertiary Butyl Ether (MTBE) in gasoline. MTBE had been developed in 1979 to replace lead as an octane enhancer in common gasoline. Lead had been proven to have many toxic effects upon the environment, especially to humans. At the time, MTBE was declared the savior for lead poisoning in the US. Oil companies quickly made large investments in MTBE refineries and car manufacturers retooled automobile carburetors and exhaust systems to run on gasoline with the new MTBE additive. Lead-based gas soon disappeared.
However, all was not well in paradise. Throughout the United States, metal underground gasoline storage tanks installed at gasoline stations in the 1950s and 1960s reached the end of their useful lives and began leaking vast volumes of gasoline into the soil and underlying groundwater. For a while, I worked as a State engineer in charge of Brevard County’s leaking underground storage tank program. To my dismay, I discovered there were thousands of leaking gas tanks contaminating shallow groundwater supplies across Florida.
In 1997, EPA developed drinking water standards that showed MTBEs were hazardous in drinking water at levels of 40 parts per billion (PPB). It turned out that enormous groundwater supplies in California and New York were contaminated from leaking gasoline tanks that released MTBEs into groundwater. About that time, 60 Minutes showed an expose on the extent of MTBE contamination in hundreds of cities water supplies across the country, with clean up costs running into hundreds of millions of dollars. As a result, states began banning gas with MTBE and in 2000 EPA started a nationwide phase-out program for the use of MTBE in gasoline.
About that time, Eugene saw the opportunity, and being a brilliant inventor, he decided to develop a new additive to replace MTBE in all gas sold in America. He came up with a new additive developed by Environmental Energy Fuels, Inc. at a research center in Palm Bay, Florida. Knowing he needed credentials, he ran tests at NASA on cars using the EEF additive. The results were quite amazing, showing not only was the additive an effective replacement for MTBE, but it also significantly boosted engine horsepower and reduced emissions by 90%. Had Eugene found the Holy Grail? He showed the results to Lou, who was astounded. Lou invested in EEF, becoming a partner to supply seed money for additional testing, as well as buying part ownership of the additive patent. Soon Eugene undertook additional product testing with EPA that verified the phenomenal benefits of his additive.
Lou and Eugene were extremely excited and began collecting investment funds from people in Brevard County, including Annie and I, her son, my relatives, local lawyers, and others who saw the light. Annie and I obtained 250,000 shares of EEF stock that would soon go public and make us rich.
The key to moving an invention from the lab to the real world is scalability; that is, making manufacturing plants large enough and cost-effective to become a major world supplier. Most inventions disappear when an inventor has to become a manufacturer and supplier. Inventors are idea guys. They are usually not interested in the day-to-day grind of manufacturing products profitably.
Eugene approached Ford Motor Company with his idea. Ford showed interest, but admitted their car’s carburation systems would have to be retooled at great expense. Next, he went to Exxon. This was the real test because he would need to sell his additive patents to a gas company that could phase out MTBE refineries and make new refineries for the additive. Exxon was not real thrilled with the intense investment to make new refineries in the US, especially in light of tight EPA environmental standards for refineries. No problem, Eugene went overseas and convinced people in Greenland to build a refinery. The investors, including me, were getting more thrilled by the day, dreaming of what we would do with newfound riches.
As was bound to happen, an idea with this much potential to change vast industrial infrastructure soon attracted buzzards. Eugene needed serious funding to proceed with constructing a second refinery. And who should appear on the scene, but Hillary Clinton’s brother, Tony Rodham, who started his career as a prison guard and private detective. By 1999 he was a high-ranking Democratic National Convention official who acted as an intermediary between the US and leaders of Paraguay, Russia, Cambodia, Georgia, and China. He also became a major broker in Bill Clinton’s pardons controversy.
Tony and M. J. Parker, a Democratic Fund Raiser from Orlando, invested in EEF through a Bahamian offshore company. They were to provide funding for the construction of a second refinery.
Eugene was a long time chain smoker and it caught up with him in 2001 when he was diagnosed with advanced lung cancer. He was admitted to a Palm Bay hospital with only a short time to live. Unbeknownst to us, sometime during the next few days, Rodham and Parker went to the hospital and convinced Eugene to sign over power of attorney and all patent rights to them. They promptly disappeared, never to be seen in Brevard County again.
After the funeral, Eugene’s wife, Sandy, called a meeting of the many stockholders who invested in the company. Several hundred of us gathered at the Rialto Hilton with many questions about the future of EEF. Sandy was by no means a businessperson; she was a hairdresser with no interest in Eugene’s company. When she got on the stage to address us, Sandy simply said, “Eugene died and all the money is gone. We spent it on cars and planes. Tony has power of attorney and I don’t know where he is or what will happen to EEF. That is all I know.” She scurried off stage, leaving the investors in shock. Lou and I and several lawyers met to discuss options. The lawyers pointed to the trail of dead bodies that followed the Clintons during those years and shook their heads. Chasing people through the Bahamas would be long, difficult, and probably dangerous. We were advised to lick our wounds and walk away. We did.
A few years later I became curious about what happened to EEF. A search of EEF corporate records revealed the corporation was closed in 2001 by M. J. Parker. I also thought about the fate of MTBEs. Turns out bigger boys than us replaced MTBEs with ethanol that is now in every gasoline powered car in America. The government subsidizes inefficient ethanol production to benefit millions of farmers. And the world goes round and round. Every now and then I pull out that 250,000 share stock certificate and think of how my life would have changed if I had won the EEF lottery.