Energy and Forestry Programs Examined During Farm Bill's Title IX (Energy) Hearing

by Robert E. Kozak (Advanced Biofuels USA) Many programs authorized by the 2008 Farm Bill will expire in 2012 unless they are included in a new Farm Bill. Among those programs that would expire are all the bioenergy initiatives included in Title IX. These include the Biorefinery Assistance Program (Section 9003), the Advanced Biofuel Payment Program (Section 9005), and BECAP, the Biomass Crop Assistance Program.

On July 20, 2011, the House Agriculture Subcommittee on Conservation, Energy, and Forestry undertook one of the initial steps in the writing a 2012 Farm Bill – a public hearing on the progress of Title IX (Energy) programs. Forestry programs were included in the hearing since there is considerable overlap because by the use of forest resources for bioenergy. Testimony was given by Thomas Tidwell, Chief of the US Forest Service, Judith Canales, Administrator of the Rural Business Service, and Juan Garcia, Acting Administrator of the Farm Service Agency. (Written testimony is here http://agriculture.house.gov/pdf/hearings/GarciaandCanales110720.pdf)

In Ms. Canales’ and Mr. Garcia’s presentations and the question to them from members of the Subcommittee, three salient points stood out.

One, there has been significant interest from growers and biofuel producers in the programs. For example, USDA stated that 41 projects from 21 states with a total value of about $1 billion dollar were submitted for the BECAP program in 2011 while only $112 million was made available by Congress for funding.

Two, in the over three years since the 2008 Farm Bill was passed USDA has not been able to significantly implement the Title IX Energy programs. The Section 9003 Biorefinery loan guarantee program is a prime example of this problem. Application rules and a notice of funding were not published until February and March of this year (2011). This was three years after the Farm Bill was published. According to USAD testimony, no loan guarantees have yet to be awarded.

Three, there are conflicting visions of the focus for Farm Bill Energy programs between the Administration and members of Congress. There included:

1. Large centralized biorefineries ($250 loan guarantees under Section 9003 rules) versus request by members such as Chellie Pingree (D-Maine) for small scale cellulose plants and local energy programs, and

2. Requests for biomass use, especially forestry sources, for heating/electrical production or biofuel production. This source of this conflict comes in large part from BECAP rules that are unclear on the priority given to each bioenergy program.

To anyone attending this hearing, the conclusion on the operation of Title IX programs was clear: Because of the inability of Congress to adequately fund and USDA to implement these Farm Bill Energy programs, the promise of Title IX to significantly speed up the commercialization of Advanced Biofuels has not been met.

Therefore, in considering Bioenergy and Biofuel in the 2012 Farm Bill, there seems to be two possible directions to consider.

One, Title IX Energy programs should be removed from the Farm Bill since the Federal bureaucracy is incapable of implementing complex programs, or

Two, Title IX Energy programs can work if they are simplified and Congress includes more specific implementation language to greatly reduce agency rulemaking and related bureaucratic activities.

This July 20^th hearing was only the beginning of the process that will result in a 2012 Farm Bill. Everyone interested in the efficient commercialization of a sustainable advanced biofuels industry should be thinking hard about what we have learned and what will work.

Simple, creative funding ideas that can mobilize investment and equity will be needed to match the simple, creative ideas bubbling up in labs and fields throughout the country. READ MORE (Hearing web site; includes all submitted testimony) and MORE (committee press release)