House subcommittee hearing examines Farm Bill energy programs

By Kris Bevill | May 22, 2012

Representatives of the Biotechnology Industry Organization and the Agriculture Energy Coalition testified in favor of retaining Energy Title funding in the 2012 Farm Bill during a House Agriculture subcommittee hearing held May 18 in Washington, D.C., telling subcommittee members that the Energy Title programs have had a significant impact on rural economies and blossoming renewable energy industries since their creation in 2002, and encouraging them to include continued mandatory funding for the programs for the next five years.

“Farm Bill energy programs are revitalizing rural economies, reducing farmer dependence on commodity support programs, and ushering a new generation of advanced biofuels, renewable chemicals and biobased products to the cusp of commercialization,” BIO President and CEO Jim Greenwood said. “In short, this program is working and our member companies are beginning to put steel in the ground.”

Greenwood provided several examples of projects that have received support from energy programs and are nearing commercial-scale operations, including the Ineos New Planet Bioenergy LLC Indian River County BioEnergy Center in Florida, which received a $75 million loan guarantee through the Biorefinery Assistance Program and is expected to begin producing cellulosic ethanol at its 8 MMgy facility this year. Greenwood noted that the project would have been “nearly impossible” to complete in the current financial environment without support from the Biorefinery Assistance Program. The facility will also produce about 6 megawatts of electricity from renewable sources when fully operational.

ZeaChem Inc. and Abengoa Bioenergy have also received federal support for their second-generation ethanol biorefinery projects through the Biomass Crop Assistance Program, which provides funding to assist farmers in establishing thousands of acres of energy crops. Abengoa’s 23 MMgy cellulosic ethanol plant in Hugoton, Kansas, scheduled to be complete in 2013, will utilize switchgrass grown as part of a 2011 BCAP project, while ZeaChem’s commercial-scale biorefinery will convert poplar trees grown in Oregon to ethanol and chemicals when that facility is complete in about 2014. Earlier this year, ZeaChem also received a conditional commitment for a $232.5 million loan guarantee through the Biorefinery Assistance Program to support construction of its 25 MMgy commercial-scale biorefinery. At about the same time, Fiberight LLC also received a conditional commitment for a $25 million loan guarantee through the program to support the completion of its 3.8 MMgy cellulosic ethanol facility in Blairstown, Iowa.

Ryan Stroschein, co-director of the Ag Energy Coalition, told subcommittee members the Farm Bill’s energy programs could be a “game changer” for rural economies and noted the potential for jobs to be created if funding for the programs is reauthorized. He said the USDA estimates that BCAP and the Biorefinery Assistance Programs alone have the potential to create more than 700,000 new jobs. At a time when fiscal responsibility is at the forefront of any federal funding discussion, Stroschein pointed out that less than 1 percent of the 2008 Farm Bill was allocated for energy programs, but the impact has benefited all states and has leveraged more private investments than is believed to have been possible without them. “These programs also will help us keep energy dollars here at home where they have a significant multiplier effect, both in terms of economic development and job creation,” he said. “This is clearly a ‘win-win’ approach to meeting our nation’s economic and energy security challenges.”

Both group representatives commended the Senate Agriculture Committee for including Energy Title funding in its version of the Farm Bill and urged the House subcommittee to do the same. Without reauthorization, all of the Farm Bill’s energy programs will expire this year.