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Biomass Crop Assistance Program may lead to expansion of renewable energy sources
Changes to the nation’s renewable fuels industry are a bit clearer this week in light of Final Rule in relation to the 2008 Farm Bill’s Biomass Crop Assistance Program.
The rule, which appears below and was published by the Public Inspection Desk website of the Federal Register in advance of its anticipated Oct. 27 debut, marks one more step being made by the government to subsidize farmers who produce non-food crops that can be used to create fuel.
“Our country needs a strong, vibrant rural economy,” Vilsack said. “Unfortunately, over the past several decades there have been time when it was neither strong nor vibrant. Persistent high unemployment and poverty encouraged many to leave their rural communities. A majority of rural counties lost population, and with it came a loss of political representation.”
Vilsack touted current initiatives like “Know Your Farmer, Know Your Food” and stimulus projects specifically directed at rural economies as evidence that the Obama administration has been working to ensure that “rural America’s past [doesn't] predict its future.” At the heart of the revitalization plan, according to Vilsack, is the goal of reducing the country’s dependence on foreign oil.
“Thirty years ago 28 percent of the oil consumed in the United States was important. Today that figure is closer to 60 percent — some of which comes from countries that neither like us nor support us. Today we still send a billion dollars a day outside our shores helping other countries’ economies to grow while our economy recovers from a deep recession.”
Pointing to a newly released USDA report, “Effects of Increased Biofuels on the U.S. Economy in 2022,” Vilsack noted the costs associated with biofuel production will continue to drop with each succeeding generation, and applauded the decision by the U.S. Environmental Protection Agency to authorize E-15 for late model vehicles. But in order for the industry to grow — and for the nation to reach the Renewable Fuel Standard’s goal of 36 billion gallons of biofuels by 2022 — Congress needs to renew the Biodiesel Production Tax Credit and extend the Volumetric Ethanol Excise Tax Credit for the short-term, Vilsack said.
“Tax credits, by themselves, are not enough,” he added. “Our effort must include identifying additional feed stocks available throughout the country while discovering more efficient production processes. Research and development must intensify.”
To that end, the USDA will set up five regional Biomass Research Center to focus on creation of biofuels from non-food crops:
1. The Northeast center will be located in Madison, Wis., led by the Forest Service.
2. The Central East Center will be located in Lincoln, Neb., led by ARS
3. The Southeast center, a little more complicated because so much is going on there, will be located both by ARS in Boonesville, Ark.; and Tifton, Ga., and in Auburn, Ala., led by the Forest Service.
4. The Western Center will be located in Maricopa, Ariz.
5. The Northwestern Center will be located in Pullman, Wash., led by ARS, and Corvallis, Ore., led by the FS
“The Farm Bill of 2008 authorized investments to assist in the construction of new biorefineries. Today, I am directing the Rural Development mission area of USDA within 60 days to announce support and funding under the current Biorefinery Assistance Program for the construction (to commence in 2011) of a specific biorefinery or bioenergy plant in each of the regions serviced by the regional centers. In doing so, the entire country can begin to see the economic benefit to producers and the job creation potential of the biofuel/bioenergy industry,” Vilsack explained.
The new rule, which appears below, allows producers to receive financial help to defray the costs of producing, storing and transporting alternative fuel stock to the refineries — up to 75 percent of the cost of establishing a new crop as well as rental payments to provide for transitions from current cash crops.
“In crafting the final rule we paid attention to the concerns of industry and environmentalists, particularly with respect to woody biomass. Assistance for woody biomass will only be provided for materials removed from a forest for ecosystem restoration and forest health purposes,” Vilsack said.
Sioux Falls-based POET LLC, the largest U.S. ethanol producer, indicated that it plans to seek approval to consume non-food biomass crops at a cellulosic refinery in Emmetsburg as well as at a pilot plant in Scotland, S.D.
POET, according to a recent press release, is in the midst of the world’s largest commercial harvest of biomass for cellulosic ethanol. Farmers around Emmetsburg are baling corn cobs and light stover for delivery to POET. In order to store the bales, the company recently completed construction of a multi-million dollar stock yard next to where the first commercial cellulosic ethanol plant will be built.
“For several years, we have been working with university researchers, government agencies, farmers and agricultural equipment manufacturers to develop a system of harvesting, transporting and storing corn cobs and light stover,” said Jim Sturdevant, director of Project LIBERTY for POET. “While we have made tremendous progress, the matching payments from BCAP help motivate the first farmers to adopt these new practices.”
The National Corn Growers Association also expressed its support of the new efforts through the USDA and the Obama administration to expand the development and use of domestic renewable biofuels.
“Because time is very short before the current Congress ends, we urge lawmakers to take the importance of this initiative to heart and move quickly,” said Bart Schott, president of the NCGA and a North Dakota corn producer. “While we support several broad efforts to extend the availability of higher blends, especially pressing is the extension of the Volumetric Ethanol Excise Tax Credit and other tax provisions to help ensure that current ethanol goals are met predominantly with domestic sources.”
The VEETC is due to expire at the end of the year, but Congress is expected to extend it during the lame duck session that will follow the November elections.