Johanns Discusses Usda Renewable Energy Proposals

Agriculture Secretary Mike Johanns today discussed details of the Administration’s farm bill proposals during a renewable energy roundtable discussion at Purdue University in Indiana. The proposals would dramatically expand the commitment to renewable fuels in the farm bill.

“We heard during our Farm Bill Forums real excitement about renewable energy and our proposals reflect that enthusiasm by providing $1.6 billion in new funding for renewable energy research, development, and production – targeted to cellulosic ethanol, which creates fuel from switchgrass, wood chips and other biomass,” said Johanns, after touring a cellulosic research laboratory at Purdue University. “The cellulosic research being conducted is very exciting and I’m confident we are on the right path to meet President Bush’s goal to reduce gasoline consumption by 20 percent in ten years. Our proposals will help our nation to expand beyond corn ethanol toward cellulosic ethanol, which could be produced in virtually every state.”

The $1.6 billion commitment includes funds to support $2.1 billion in guaranteed loans for cellulosic projects, $500 million for bio-energy and bio-based product research and $500 million for renewable energy systems and energy efficiency grants.

The following renewable energy proposals are contained within the energy, conservation, and rural development titles of the Administration’s farm bill proposal:

-Reauthorize the Renewable Energy Systems and Energy Efficiency Improvements loan guarantee program. The Administration proposes a loan guarantee program funding level of $210 million, which would support $2.17 billion in guaranteed loans over 10 years. The loan cap for funding cellulosic ethanol projects would increase to $100 million per project, and these cellulosic projects would be exempt from the cap on loan guarantee fees. Further, the Administration recommends incorporating these programs into Rural Development’s Business and Industry Loan and Loan Guarantee Program. Funding would be prioritized for the construction of biorefinery projects in the Business and Industry loan guarantee program.
-Reauthorize the Renewable Energy Systems and Energy Efficiency Improvements grant program. The grant program would be funded at $500 million over 10 years. This program will continue to support smaller alternative energy and energy efficiency projects that directly help farmers, ranchers, and rural small businesses. The goals would be consistent with those contained in the Biorefinery Development Grants program, which include providing diversified markets for agricultural and forestry products, increasing the country’s energy independence, and enhancing rural development opportunities.
-Revise the Biomass Research and Development Act of 2000 to increase the annual competitive grant funding for biomass research, focusing on cellulosic ethanol, -with $150 million in mandatory funding over 10 years.
Initiate a new Cellulosic Bioenergy Program, which would provide $100 million in direct support to producers of cellulosic ethanol.
-Reauthorize the BioPreferred program, revise provisions to improve its effectiveness, and invest $18 million to expand and improve the program.
The additional renewable energy proposals outlined below are contained within other titles of the Administration’s farm bill proposal, as noted:

-Research Title: Expand USDA and university research by authorizing $500 million in mandatory funding over 10 years for the creation of a Bioenergy and Bioproducts Research Initiative to facilitate collaboration between Federal and university scientific experts and ultimately make bioenergy production more cost-effective. The initiative would link USDA Rural Development bioenergy activities to hasten technology transfer.
-Forestry Title: Accelerate the development of new technologies to better utilize low-value woody biomass by authorizing $150 million in 10 year mandatory funding for Forest Service research.
-Conservation Title: Enhance the Conservation Reserve Program (CRP) by adding a biomass reserve program to give priority for whole-field enrollment of lands producing biomass for energy production.
While in Indiana today, Johanns participated in a ground breaking ceremony, hosted by Indiana Governor Mitch Daniels, for a state project called BioTown. Founded in September 2005, BioTown aims to develop a working community that is entirely energy self-sufficient. The BioTown concept was created to develop local energy production, reduce dependence on foreign oil sources, build a cleaner environment, implement solutions to animal waste management issues, and develop new markets for Indiana agricultural products and by-products.

Additionally, Johanns today announced a new web-based tool designed to make energy-related activities from across the Department accessible from a single web page. The Energy Matrix is a comprehensive collection of information on all of USDA’s energy-related programs, research efforts, funding opportunities, and technical assistance. Interested parties will be guided through depth and breadth of energy-related activities in which the Department is engaged. Visit the site at www.usda.gov/energy .

The farm bill proposals released January 31 are based on comments and suggestions received from farmers, ranchers and other stakeholders during 52 USDA Farm Bill Forums across the nation and received via mail and the Internet. These proposals represent the final phase of a nearly two year process. To access the full 183 page document or to access the proposals by title go to www.USDA.gov/farmbill .