Energy groups propose biofuels recommendations

By Erin Voegele | January 03, 2009
Web exclusive posted Dec. 19, 2008 at 12:52 p.m. CST

The Environmental Law and Policy Center, in cooperation with organizations such as the National 25x'25 Alliance Steering Committee, has offered U.S. President-Elect Barack Obama and members of Congress a package of 12 new recommendations to bolster the U.S. economy, create jobs and insure a clean energy future through additional investments in federal renewable energy programs.

The recommendations call for additional investments of $4.14 billion to boost various federal renewable energy programs. The proposals target programs that are designed to accelerate markets for biomass, wind, solar power, geothermal, hydropower and the renewable biobased fuels, including ethanol and biodiesel.

Relating to biofuels, the package calls for a renewed look at government support for advanced biofuels production, including increased funding in the form of grants specifically aimed at the construction of commercial-scale cellulosic production facilities. The proposals also underscore the critical role of the USDA in the promotion of a clean energy future and a robust economy.

A statement announcing the policy recommendation package cites a study conducted by the University of Tennessee's Department of Agriculture Economics. According to the study, if America's farms, ranches and forestlands are empowered with policies and incentives needed to meet 25 percent of the nation's energy needs with renewable resources, an estimated $700 billion in new annual economic activity would be generated - and up to five million new jobs could be created.

Of the 12 recommendations, four relate specifically to the biofuels industry.

One recommendation calls for increased funding for the Repowering Assistance Program, which was authorized under the Farm Bill. The program provides loans and loan guarantees to help biofuel plants convert their heating and power systems to use biomass rather than fossil fuels. The program is currently funded at $300 million over four years, with an additional $35 million in annual authorization. The Steering Committee proposes$150 million in funding over two years. According to the recommendation, increased funding would generate construction and maintenance jobs and contribute to cleaner air and a cleaner environment.

A second recommendation calls for increased funding and broadened authority of the Biorefinery Assistance Program, which was also authorized under the Farm Bill. The program provides loans and loan guarantees to construct commercial-scale advanced biofuel facilities. It also provides grants for demonstration-scale advanced biofuels plants. According to the Steering Committee's recommendation, the collapse of the credit market has stalled construction of the nation's first commercial-scale cellulosic biorefineries. The committee projects the economic recession may delay progress toward meeting cellulosic and advanced biofuel targets in the renewable fuels standard and slow progress in reducing greenhouse gas emissions. The recommendation states that additional funding the Biorefinery Assistance Program would reduce investor risk as well as provide construction and operations jobs in rural communities. The Steering Committee's recommendation for the program is to increase and fully fund mandatory and discretionary levels, at $500 million the first year and $1 billion in year two. It also recommends considering expanding the use of the grants to facilitate the construction of first-generation cellulosic biofuels plants.

A third recommendation calls for funding the Bioenergy Crop Assistance program, which was authorized under the Farm Bill. The program supports the establishment and production of eligible crops for conversion to bioenergy. It's also designed to assist agricultural and forest landowners with collection, harvest, storage, and transportation of energy crops to conversion facilities. To date, the program's rules have not been developed, and no mandatory funding is provided in the authorizing legislation. The proposal calls for implementing the program in 2009 and providing $500 million - $250 million each year.

The fourth recommendation calls for investment in biofuel infrastructure projects. According to the recommendation, a comprehensive federal initiative should be developed and funded to address biofuel infrastructure, distribution and delivery issues. The program would provide for pipeline feasibility studies, as well as financing for the construction of new pipelines. It would also address rail capacity for biofuels. Funding for the E85 Corridor program should be expanded, and funding should be made available to facilitate the manufacture and deployment of blender pumps. In addition, the recommendation calls for the federal government to create a federal flex-fuel vehicle fleet and expedite the biorefinery permitting process.

To learn more about 25x'25's recommendations, visit the organization's Web site: www.25x25.org/storage/25x25/documents/EconomicRecovery/economic_recovery_recommendations-12_15_08.pdf.