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Hearing on Clean Energy, Biofuels and Rural Development

July 22, 2011

This week Congress hosted a number of advocates on Capitol Hill for briefings on the state of federal policy supporting the production of biofuels and other energy products from agricultural crops.

On Wednesday July 21, the House Agriculture Committee convened a hearing to examine energy and forest programs administered by USDA.  Judith Canales, Administrator of the Rural Business Cooperative Service, Tom Tidwell, Chief of the US Forest Service, and Juan Garcia, Deputy Administrator of the Farm Service Agency all testified on the state of their respective agencies and what they hope to achieve in the coming years.

Canales highlighted the important role her agency plays in stimulating economic development in rural America.  “We provide leadership to build businesses in rural America, we leverage public-private and cooperative resources and create jobs,” Canales said in her testimony to the Committee. The Administrator also noted that her agency is focused on providing rural residents with access to renewable energy systems to make their homes and businesses more economically efficient.

The Rural Energy for American Program (REAP) is the longest running renewable energy program that operates out of the Rural Business Cooperative Service agency.  In FY 2010 REAP provided 2,400 grants and loan guarantees for a total of  $159 million in support of energy audits, energy efficiency projects like windmills, geothermal systems and methane digesters.  Canales stated that, “this program provides an immediate impact and engages all types of communities.”

Deputy Administrator of the Farm Service Agency Garcia summarized the progress his agency has made in developing biofuels since the Energy Act of 2005 specified the Renewable Fuel Standard, which specifies the amount of ethanol and approved biofuels that must be produced for the fuel supply.

Garcia noted that Congress mandated that 36 billion gallons of biofuels be added to the fuel supply by 2022 in the 2007 revision of the Renewable Fuel Standard.  He emphasized that it will take time to establish the crops and build the facilities to achieve this ambition goal set forth by Congress, and “that farmers are subject to greater risks of establishment, production and management of biomass crops as compared to conventional crops.”

The Deputy Administrator said that the Biomass Crop Assistance Program provides the financial assistant to help farmers grow biofuel crops.  This matching payments program has received significant interest from producers – there have been 41,000 applications in 21 states requesting $1 billion in funds to grow over 1.5 million acres of biomass crops across the US.

Although Canales and Garcia toted the successes of both the REAP and BCAP programs, the House voted in late May to cut funding for both programs to almost zero for fiscal year 2012.

During the question and answer portion of the hearing, Representative Chellie Pingree (D-ME) asked Canales how her programs could provide economic benefits to small producers and processors of biomass crops.  Canales responded and said that REAP is predominately a small businesses program and that the program has an Energy Coordinator in every state to help determine specific needs on the ground.  The Administrator offered to work with the Representative’s office to further understand the needs of small business owners in her state.

On Tuesday July 19, a separate briefing was organized for both chambers of Congress by the Environmental and Energy Study Institute with representatives from various agricultural interest groups and consultancies.  The briefing provided an overview of how the REAP and BCAP programs have worked on the ground for producers and processors of biomass crops across the United States.

Andy Olsen of the Environmental Law and Policy Center highlighted the successes and challenges of REAP and BCAP.  He provided an overview of the current projects underway across the US and outlined the funding needs for these programs moving forward.

Both Bennie Hutchins, Consultant at Ag Energy Resources and Bruce Knight, former Chief of the Natural Resource Conservation Service (NRCS) and now a consultant to the dairy industry, discussed how dairy, poultry and other livestock producers are using REAP to make their production facilities and operations more energy efficient. They also emphasized how REAP and other government funds for energy efficiency projects leverage significant private dollars, both in terms of cost savings on the farm and for the development of new energy efficient technologies for the agricultural sector.

You can view each speakers’ PowerPoint presentation or access the audio recording of the briefing on the EESI website.

Categories: Budget and Appropriations, Conservation, Energy & Environment, Farm Bill, Rural Development

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