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Senate bill encourages farmers to grow energy crops
SIOUX FALLS, S.D. (AP)--Legislation introduced in the U.S. Senate May 23 would entice farmers located near ethanol biorefineries to grow dedicated energy crops. The bill from Sen. John Thune, R-SD, and Sen. Ben Nelson, D-NE, would offer incentives to farmers who plant switchgrass, fast-growing trees and other cellulosic feedstocks and deliver them to the nation's next generation of ethanol plants, Thune said. "Cellulosic ethanol, produced from homegrown sources like corn stover, wheat straw, switchgrass and wood chips, has incredible potential to supplement corn-based ethanol," Thune said in a release. "But if cellulosic ethanol is to achieve its potential, it is critical that Congress help this industry overcome initial market barriers." In February, the U.S. Department of Energy awarded $385 million in grants to six companies hoping to build the nation's first large-scale cellulosic ethanol plants. Earlier this month, Energy Secretary Samuel Bodman announced plans to invest another $200 million over the next five years to help companies develop smaller biorefineries. Under the bill introduced May 23, the U.S. Department of Agriculture would determine the likelihood of construction of a future biorefinery, the local potential for feedstock production, the number of interested farmers and a biorefinery's economic impact. Once a project is approved, farmers could enroll eligible land in the program. During a contract's first five years--as the ethanol plant is built and the crop is getting established--farmers would receive a cost share and a per-acre rental payment. Once the biorefinery starts up, the rental payment would end and the farmer would get a matching payment of up to $45 for each ton of delivered biomass for up to two years, said Thune, a ranking member of the energy subcommittee. The bill would also authorize matching per-ton payments to farmers anywhere in the U.S. who sell crop byproducts and residues such as corn stover and wheat straw to ethanol plants. That's the plan at Sioux Falls-based Poet, one of the recipients of the Energy Department's initial grants. The company, which has been making ethanol from corn for more than 20 years, will use the $80 million grant to adapt its Emmetsburg, Iowa, plant to make additional fuel out of corn stalks and fiber. Poet will buy stalks normally left behind in fields from the same farmers that deliver corn. Under the Senate bill, matching payments for byproducts and residues can be made for up to two years beginning with the date the biofuels facility begins purchasing the feedstock, and are also capped at $45 per ton. Sen. Nelson said cellulosic ethanol has always faced a chicken-or-the-egg problem but the new bill should help resolve that problem. "It's difficult to start commercial production without a guaranteed supply of biomass, but it's hard to encourage farmers to grow the biomass unless they know they'll have a market," Nelson said in a release. Date: 6/14/07
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