All Eyes on Energy

FROM THE SEPTEMBER ISSUE: With the 2014 Farm Bill set to expire in the midst of hesitancy in federal spending, ethanol producers and advocates contemplate the fate of their invaluable Energy Title.
By Keith Loria | August 21, 2017

The 2014 Farm Bill—otherwise known as the Agricultural Act of 2014—places a larger emphasis on energy than past farm bills have. It includes the most recent version of the Energy Title, which was first enacted in 2002. The 2014 Energy Title allocated $694 million to programs such as the Rural Energy for America Program, the Biomass Crop Assistance Program, the Biobased Markets Program and the Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program, among others.

The 2014 Farm Bill is set to expire in 2018 and discussions on its next iteration are picking up momentum. But with a Congress focused on federal spending restraint, and the oil industry’s influence on the current administration, the ethanol industry is voicing concern about the prospects for the Energy Title and programs that are necessary for ethanol’s success.

Brian Jennings, executive vice president for the American Coalition for Ethanol, admits it’s still too early to know what will or won’t make it into a potential Energy Title, but he lauds its effectiveness in the past few years. “The Energy Title has provided important support for advanced biofuel technologies and for infrastructure (blender pump) development in the past, and it would be important for Congress to consider continuing that sort of support in the future,” he says. REAP, for example, has led to more than 15,000 projects nationwide, with more than $2 billion in leveraged investments in rural America.

“A new Farm Bill should be taken up soon to ensure that program authorizations and mandatory funding are fully in place when the current Farm Bill expires in 2018,” says Lloyd Ritter, founder and managing partner of Green Capitol LLC, a consulting firm that specializes in public policy development in clean energy sectors. “In addition to the reauthorizations and sensible, stable mandatory funding, we want to see some technical corrections and improvements to certain programs.”

Ritter says, specifically, the Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program should fully support standalone renewable chemical biorefineries. REAP should better support “underserved technologies” such as small-scale wind and biogas systems, BCAP should be resuscitated with a focus on hazardous fuels reductions in the western U.S., and the biopreferred program should be strengthened. 

Of the overall Farm Bill, Jennings says: “We’d like to see the Conservation Title contain incentives to reward farmers for activities that sequester carbon and reduce greenhouse gas emissions, and we’d like an Energy Title to reward energy efficiency activities at biorefineries and on farms and to provide some support for continuing to develop infrastructure for the use of higher ethanol blends.”

John Fuher, senior director of government affairs for Growth Energy, says the organization is most concerned about a farmer safety net in the next Farm Bill, emphasizing support for those struggling to make a living. Jennings says ACE agrees.

“As for ethanol-specific items, the last Farm Bill had a permanent stream of funding for energy and lots of things targeted to help us advance biofuels, and that’s what we’re also concerned with,” Fuher says. “This bill has a pretty significant amount of resources dedicated toward renewable energy and we’re focused on that as well. We’re going to fight for the largest, most robust funding level we can for these energy programs.” A reduction in programs that restricts resources for the growth of agriculture and renewable energy is a step backwards, he adds.

“The ideal Farm Bill would continue and improve successful Farm Bill clean energy programs by helping to advance energy efficiency, on-farm energy production and to increase rewards for environmental benefits that are undervalued in the marketplace,” says Andy Olsen, senior policy advocate for the Environmental Law & Policy Center. “We would also see substantially more funding, given the widespread popularity of these programs.”

Money, Influence
In 2002, Jennings worked on Capitol Hill as a legislative aide to a member of the Senate Agriculture Committee. He notes that the U.S. was enjoying a budget surplus at that time, contributing to the implementation of an Energy Title. 

“The other key was that there were forward-thinking senators … who worked to craft the Energy Title,” he says, citing Sens. Thomas Harkin, D-Iowa; Richard Lugar, R- Ind.; Tom Daschle, D-S.D.; and Tim Johnson, D-S.D. “We are in a very different place today in terms of the budget environment.”

“In the current budget climate, the urge to downsize or to hold the line on spending is perhaps understandable,” Ritter says. “Our concern is that certain programs will be targeted for cuts unfairly. The Energy Title represents less than 1 percent of Farm Bill spending. Yet it has had enormous economic impact, leveraging matching private investments in energy production and energy efficiency, building new manufacturing facilities in rural communities, and creating thousands of new jobs, along with opportunities for economic growth.” 

Olsen says efforts to continue clean energy programs face an uphill fight in the next Farm Bill because fossil fuel interests have enormous influence with the current Congress and White House.

Doug Durante, executive director of the Clean Fuels Development Coalition in Bethesda, Maryland, cites President Donald Trump’s administration and an anti-ethanol stance as reason for the concern. “If there’s one thing we know about Trump, he does truly seem to be an anti-regulatory guy, for better or worse. And it’s hard to make the case with this administration that we need biofuels. We need to find things to continue to open the door to allow biofuels—and ethanol particularly—more access to the market.”

Durante also notes things change rapidly in the industry and the mood surrounding the last Farm Bill was significantly different than it is now. “There was a great appetite in the last Farm Bill to do stuff and the Energy Title was extremely aggressive,” he says. “I think it worked and there was so much good stuff, from R&D to the REAP Program to the Biofuels Infrastructure Partnership, but I don’t know if the appetite exists for any of that stuff to come back.”

Many experts say the ethanol industry won’t be able to count on the government for forward-moving policy. Durante notes that members of Congress will need to see the benefit in order to authorize programs in the Farm Bill. And right now, they don’t. “I am chagrined to see these myths continue to perpetuate on the Senate floor about ethanol—it raises food prices, hurts engines, increases emissions—and every single one of those things is not true and can be disproven,” he says. “I don’t want to be overly negative, but you have to be realistic. As we see what their appetite is on the Hill to repeat any of these things, there needs to be a constant barrage of reminding them of the benefits.”

Secretary Perdue
When Trump tapped Scott Pruitt, a strong ethanol opponent, to head up the U.S. Environmental Protection Agency, many worried about the industry’s immediate future. But by bringing Sonny Perdue on board as Agriculture Secretary, who insists “ethanol is here to stay,” things might not be so dire.
“He’s someone who has gotten high reviews from people we respect on Capitol Hill,” Fuher says. “We view him as a very good partner and as someone we look forward to working with. We look to him as someone who supports us.”

Jennings says Perdue seems to have a strong grasp on the importance of renewable fuels to the economic well-being of rural America, and ACE is hopeful that, like his predecessor, Secretary Thomas Vilsack, Perdue will be a vocal advocate for renewable fuels in the administration.

Perdue even held his first public address event in Nevada, Iowa, with DuPont’s cellulosic ethanol facility as a backdrop. In his speech, he highlighted the key role of innovation in ag-based energy, manufacturing and clean energy technology. 

Many ethanol advocates say Perdue understands the value of the rural renewables industry to those communities, providing them new markets for agricultural products, incentives to develop new crops, and opportunities for economic growth and preservation. They also hope for clean energy to be embraced broadly as a bipartisan solution to multiple national problems, and say Perdue will help.

“The Energy Title has always had solid bipartisan support, and hundreds of groups around the country believe they are important and deserving of continued support as well,” Ritter says. “The Trump Administration budget wasn’t very helpful due to proposed cuts but these innovative, job-creating programs speak to his top goals of helping build jobs, manufacturing and energy dominance, especially in areas hurting like much of rural America.”

Author: Keith Loria
Freelance Journalist