Farm bill hearing, Obama budget plan start 2012 renewables debate

By Sara Wyant

© Copyright Agri-Pulse Communications, Inc.

WASHINGTON, February 15, 2012 -Renewable energy advocates say federal programs critical to the development of sustainable bioenergy and the bioeconomy, especially in rural America, are at a crossroads. Questions are rampant as to whether a number of farm energy programs established or continued by the 2008 Farm Bill will be renewed in the next major piece of farm legislation.

Some answers to those questions may come this morning when Sen. Debbie Stabenow, D-Mich., chair of the Senate Committee on Agriculture, Nutrition and Forestry, will open the committee's first 2012 Farm Bill hearing where members will hear panels of witnesses called to discuss farm energy and rural development.

Ned Stowe, a policy associate with the Environmental and Energy Study Institute, a Washington, D.C.-based think tank, says the hearing may give renewable energy advocates and farm groups an idea if there is any sentiment to renew farm energy programs set to expire at the end of 2012.

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Stowe says the Agriculture Committee is under pressure to reduce overall spending for nutrition and agriculture programs in the next farm bill. In November, the leadership of the House and Senate Agriculture committees recommended cuts of $23 billion.

The EESI analyst said the energy title in the 2008 Farm Bill authorized a dozen programs and estimates that the programs authorized a total of $1.037 billion in mandatory funding and $1.113 billion in discretionary funding for fiscal years 2008 through 2012, “all to advance the development of bioenergy and other types of renewable energy and energy efficiency across rural America.”

Stowe insisted that programs such as the Biomass Crop Assistance Program (BCAP), the Biorefinery Assistance Program (BAP) and the Rural Energy for America Program (REAP) “offer significant returns on the public investment in terms of job creation, rural economic development, and energy security." However, “because these programs do not receive baseline funding, they may be especially vulnerable to cuts in the next authorization bill.”

President Obama's fiscal 2013 budget proposals offered few signs of optimism for those seeking to boost to renewable energy programs in the 2012 Farm Bill. His budget proposal for federal spending beginning Oct. 1 offers only $4.6 million in discretionary funds for guaranteed loans under REAP, and virtually nothing for other major farm energy title programs. While no authorization is available for BCAP, the USDA budget notes that contracts of up to 15 years have been entered under the program, and outlays needed to meet those agreements are included in the 2013 USDA baseline numbers.

Elsewhere in the budget blueprint, USDA says it is asking Congress for some $200 million through a variety of business loan and research programs for advanced biofuel development. The USDA budget would also provide $4 billion in direct loans to electric cooperatives to support renewable energy generation, transmission and distribution activities across the country.

Andy Olsen, a senior policy analyst with the Madison, Wis.-based Environmental Law and Policy Center, says the president's budget proposal “puts a lot of pressure on Congress to decide whether to continue these (farm energy) programs.” He cited long-time bipartisan support for REAP and BCAP in the Senate, including Stabenow and a number of other Democrats, as well as Republican Sen. Thad Cochran, of Mississippi.

Hoping to renew that support at tomorrow's Senate Agriculture Committee hearing will be Steve Flick, board president of Show Me Energy Cooperative, in Centerview, Mo., the first recipient of BCAP funding for a 50,000-acre bioenergy crop project. Flick is expected to tell lawmakers about the wide economic benefits that come from the farm energy programs while reducing the nation's dependence on foreign oil. Also testifying is Bennie Hutchins, a project support services contractor for Ag Energy Resources in Mississippi, who is expected to tell the committee that REAP  has application in every state across the country in a wide variety of agricultural production and small business enterprise operations.

Meanwhile, the administration's DOE budget proposal would allocate $270 million for biomass and biorefinery research and development through the department's Energy Efficiency and Renewable Energy program, a 35.5% hike over the amount authorized for this fiscal year. And the spending plan keeps constant the $75 million enacted for the department's Advanced Research Projects Agency-Energy (ARPA-E) program requests $75 million for bioenergy research centers over each of the last two years. Another ARPA-E request, this one for $69.2 million request for the Joint Genome Institute, which studies plant biotechnology for energy applications, is a slight increase over the fiscal 2012 budget.

The administration's budget also called for the reinstatement of the Treasury Department's Section 1603 program that offers grants in lieu of investment tax credits for wind and solar equipment manufacturing facilities. Industry officials say the grants are much more useful in a time when investment is down due to smaller profits and the benefits of the credit go unused.

Adam Monroe, president of Novozymes North America, which is a major investor in advanced biofuel research, lauded the budget proposal's support of renewable energy.”Across America, [renewable energy] is creating jobs, supporting farmers and rural communities and freeing us from foreign oil ‑ improving our nation's security.” Monroe said his company will also work to retain strong bioenergy support in a new farm bill and protect the Renewable Fuels Standard.


Original story printed in February 15, 2012 Agri-Pulse Newsletter.

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