NASA now acknowledges what NBC Bay Area's Investigative Team first uncovered last year--that the government agency has been effectively giving a price break on jet fuel to a private company.
In a letter to an Iowa senator (PDF), NASA’s associate administrator for legislative and intergovernmental affairs admits the agency was selling jet fuel at below market rates to H2-11, a company owned by the founders of Google.
Senator Chuck Grassley says he received the letter on Thursday although it's dated Feb. 24. In the letter, NASA's Seth Statler writes, “in light of the concerns expressed with those agreements, NASA has reviewed its pricing approach and…is now charging a ‘market rate’ for aviation fuel at Ames research center.”
Last September, NBC Bay Area examined seven years of fuel records from 2007 through 2013. According to those records, NASA sold to H2-11 discounted jet fuel that was then used to fly a private 757, a 767 and 5 other luxury aircraft all over the world. H2-11’s principle owners are the same as Google's: Sergey Brin, Larry Page and Eric Schmidt.
- INFOGRAPHIC: Fuel Cost by Month & Year
According to the fuel records, H2-11 purchased jet fuel for prices ranging from $2.37 to $3.20 a gallon. At nearby local airports, the exact same jet fuel goes for between $5 and $8.50 per gallon.
According to the inspector general’s report, the discount fuel saved Google’s principals between $3.3 million and $5.3 million since H2-11 was able to purchase the taxpayer subsidized fuel at Ames.
Senator Grassley has been a vocal critic on Capitol Hill of this arrangement between NASA and H2-11. He says, “It’s good news that NASA finally heeded my calls and scrutiny from the media and acknowledged its fuel pricing was wrong. Like all agencies, NASA is responsible for getting the most bang for the taxpayer’s buck.”
An official with H2-11 has always maintained that they were buying the only fuel available to them at NASA Ames. H2-11's executive director Ken Ambrose says that the company did nothing wrong and that it has paid “full retail for hangar space” at Moffett Field.
- INFOGRAPHIC: Fuelings by Airplane
Senator Grassley still wants NASA to get back those millions that taxpayers subsidized for the lower cost fuel, but NASA says it's not possible. In the letter, Statler says “NASA does not have an avenue to pursue payments in excess of its full cost to provide the fuel under the earlier agreements with H2-11, as suggested by the inspector general.”