1022USDABiofuelsInitiatives.cfm USDA announces renewable energy initiatives
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USDA announces renewable energy initiatives

As part of the Barack Obama administration's effort to promote production of fuel from renewable sources, create jobs and mitigate the effects of climate change, Secretary of Agriculture Tom Vilsack on Oct. 21 announced a series of measures during a speech to the National Press Club in Washington.

"Domestic production of renewable energy, including biofuels, is a national imperative and that's why USDA is working to assist in developing a biofuels industry in every corner of the nation," said Vilsack. "By producing more biofuels in America, we will create jobs, combat global warming, replace our dependence on foreign oil and build a stronger foundation for the 21st century economy."

The secretary announced several measures, including the publication of a final rule to implement the Biomass Crop Assistance Program. Under the BCAP final rule, USDA will resume making payments to eligible producers. The program had operated as a pilot, pending publication of the final rule. Authorized in the Food, Conservation, and Energy Act of 2008, BCAP is designed to ensure that a sufficiently large base of new, non-food, non-feed biomass crops is established in anticipation of future demand for renewable energy consumption.

"The Obama administration is aggressively supporting our nation's farmers, ranchers and producers of biofuels as they work to bring greater energy independence to America," Vilsack said. "BCAP will help the nation's power, bio-based product, and advanced biofuel industries produce energy from sustainable rural resources and create jobs that will stimulate rural economies across the nation."

The BCAP final regulation reflects policies developed as a result of more than 24,000 comments received on previous Federal Register notices and a proposed rule, and knowledge gained by implementing a portion of the program in 2009.

BCAP uses a dual approach to support the production of renewable energy. First, BCAP provides assistance for the establishment and production of eligible renewable biomass crops within specified project areas. Producers who enter into BCAP contracts may receive payments of up to 75 percent of the cost of establishing eligible perennial crops. Further, they can receive payments for up to five years for annual or non-woody perennial crops and up to 15 years for woody perennial crops. FSA is accepting project area proposals and, after project area proposals have been approved, eligible producers may participate by enrolling at their FSA county office.

In addition, BCAP also assists agricultural and forest landowners and operators by providing matching payments for the transportation of certain eligible materials that are sold to qualified biomass conversion facilities. The facilities convert the materials into heat, power, bio-based products or advanced biofuels.

The secretary also announced jointly with the Federal Aviation Administration a five-year agreement to develop aviation fuel from forest and crop residues and other "green" feedstocks in order to decrease dependence on foreign oil and stabilize aviation fuel costs. Under the partnership, the agencies will bring together their experience in research, policy analysis and air transportation sector dynamics to assess the availability of different kinds of feedstocks that could be processed by bio-refineries to produce jet fuels.

The participants will develop a tool to evaluate the status of different components of a feedstock supply chain, such as availability of biomass from farms and forests, the potential of that biomass for production of jet fuel, and the length of time it will take to ramp up to full-scale production. The agencies already have existing programs and collaborative agreements with private and public partners and resources to help biorefiners develop cost-effective production plans for jet aircraft biofuels.

This cooperative agreement supports a larger research plan led by USDA through its five Regional Biomass Research Centers, which will help accelerate the development of a commercial advanced biofuels industry across the United States. Just as important, the plan sets out to include as many U.S. rural areas as possible to maximize the economic benefits of biofuel production across the country. The Centers will provide the critical mass needed to develop high-performance teams that will guide biomass research to address needs in both the public and private sector, including commercial aviation, military transportation, and other activities.

The secretary also discussed a biofuels report prepared by USDA's Economic Research Service that says replacing more petroleum with cost-competitive domestic biofuels reduces crude oil imports, thereby lowering prices for energy and benefiting the U.S. economy. The report also includes these findings:

--The biofuels industry becomes more productive as cost-reducing technology is applied, which results in higher wages for workers.

--Gains in Gross Domestic Product and real income are driven largely from the contribution from technological progress in biofuels, which increases the productivity of the economy.

--Next generation biofuels are considered to be a decreasing cost industry. This means that the cost of producing ethanol will decline as output increases.

The entire ERS report is available at www.ers.usda.gov/Publications/err102.



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