Biofuels: on the road to 1 million new jobs & $95 billion investment in biorefineries

By Jon H. Harsch

© Copyright Agri-Pulse Communications, Inc.

Washington, Oct. 21 - Unveiling a coordinated new drive to replace petroleum with biofuels, Agriculture Secretary Tom Vilsack said Thursday:

“The President's vision for a revitalized rural economy that creates real opportunity for growth and prosperity centers on our ability to add innovative technologies, open new markets for crops, and better utilize our natural resources . . . the approach at the heart of the President's vision . . . is our nation's capacity to reduce its dependence on imported oil and fossil fuels through the increased production and use of biofuels and renewable energy.

“No one can dispute that we remain too dependent on imported oil. That dependency, absent action now, will grow as our need for more energy grows. The Energy Information Administration estimates that by 2035, US Energy consumption will have increased by another 50 percent.

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“The Renewable Fuel Standard, known as RFS2, reaffirmed the goal of producing by 2022: 36 billion gallons of biofuels to include 21 billion gallons of advanced biofuels.

“Reaching that goal means importing less oil - at least, according to a recent industry study, a $350 billon cumulative total value of avoided petroleum imports over the 2010-2022 period. This means $350 billion that we can keep here, in this country. This means less fossil fuels releasing fewer toxins and having cleaner air to breathe, and, according to that same industry study, creating up to a million new jobs with investments of $95 billion in new biorefineries.

“The benefits to the economy and to consumers are outlined in a new Economic Research Service study released today entitled 'Effects of Increased Biofuels in the US Economy in 2022.' The study notes that unlike the rising costs of fossil fuels priced to meet increased demand and increased production costs, biofuel production costs will continue to drop with each succeeding generation of biofuels.

“The recent EPA announcement authorizing E-15 for late model vehicles will help boost demand, and EPA will make a decision later this year regarding 2001-2006 model vehicles.

“Incentives helped build the biofuel industry and incentives need to continue. Congress should start by reinstating the Biodiesel Production Tax Credit and providing a fiscally responsible short-term extension of the Volumetric Ethanol Excise Tax Credit.

“The President's Biofuels Interagency Working Group report, 'Growing America's Fuel,' called for the establishment of five USDA regional Biomass Research Centers for the development of non food biomass feed stocks. . . The Centers will also assist Rural Development officials in the development and construction of biorefineries.” The centers will be in Madison, WI; Lincoln, NE; Boonesville, AR; Tifton, GA; Auburn, AL; Maricopa, AZ; Pullman, WA; and Corvallis, OR.

“Production of 36 billion gallons of biodiesel will require that biorefineries dot the rural landscape. 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 funding under the current Biorefinery Assistance Program for the construction, to commence in 2011, of a 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 job creation potential of the biofuel/bioenergy industry.

“As research identifies alternative feed stocks and as biorefineries are built to process those feed stocks, producers must be encouraged to grow the feed stocks. The Biomass Crop Assistance Program (BCAP) will provide that assistance. The final BCAP Rule will be announced in the Federal Register tomorrow. Producers will receive financial help to defray the cost of production, storage and transportation.

“As these new materials arrive at the biorefinery additional costs may be incurred by processors. To relieve that risk for advanced biofuels production, USDA, under section 9005 of the Farm Bill of 2008, will make payments to impacted processors. Up to $281.5 million remains for this purpose.

“Over time a key missing link in the effort to meet the RFS2 goal will continue to be the lack of convenient locations to obtain higher blends of biofuels. . . I have instructed Rural Development officials to provide financial assistance, using existing resources, to provide the resources and matching funds to help install 10,000 blender pumps and storage systems over the next 5 years.

“Our effort to expand the biofuel industry will also include opportunities we control within our own vehicle fleet at USDA. We are committed to make E 85 and other blends of biofuels, including biodiesel mixes, more conveniently located. We'll encourage more use of biofuels in our fleet of almost 43,000 vehicles.

“The USDA is already partnering with the Department of the Navy as it embraces a biofuel future. Today, USDA announces another partnership with the signing of a Memorandum of Understanding with the Federal Aviation Administration (FAA). The FAA and commercial airline industry also see the potential of biofuel as jet fuel. Under the MOU, the USDA and FAA will work together with the airline industry over the next 5 years to develop appropriate feed stocks that can be most efficiently processed into jet fuel. Doing so will decrease the industry's current dependence on foreign oil and help stabilize fuel costs in the long run.

“I recognize that some may doubt our capacity to meet the challenge of expanding the biofuels industry. . . I believe the President's vision for rural America compels us to action. I believe the goals articulated within the RFS2 mandate action. And, I believe the need for energy security, a cleaner environment, and better economic opportunity in rural American make the case for immediate action.

To read more about Thursday's biofuels press conference announcements, go to:

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