Senate Ag Committee OK’s $800M for Farm Bill energy programs; DOE OK’d to move $100M for advanced biofuels

In Washington, the Senate Agriculture Committee has approved $800 million in mandatory biofuels-related funding for the proposed energy title in the upcoming Farm Bill. Last week, the Committee had been moving forward with a Farm Bill draft that included an energy title but did not have mandatory funding, which would have required the USDA to seek funding of the provisions on an annual basis, and would have ensured policy uncertainty and annual funding battles throughout the five years of the proposed Farm Bill’s life.

Yesterday, Senators Kent Conrad of North Dakota and Rickard Lugar of Indiana led the way in carrying an amendment that put the mandatory funding into the bill. According the Advanced Biofuels Association president Michael McAdams, they were part of a broad, bipartisan coalition that has come together to support biofuels and the Farm Bill, including Republican Senators Grassley of Iowa, Thune of South Dakota, Cochran of Mississippi and Hoeven of North Dakota, and Democratic Senators Harkin of Iowa, Klobuchar of Minnesota, Casey of Pennsylvania, Brown of Ohio, Bennet of Colorado, and Stabenow of Michigan.

The provisions include:

$15M for Section 9002, the Federal Biobased Markets Program
$216M for Section 9003, the Biorefinery Assistance Program
$5M for Section 2006, the Biodiesel Education program
$241M for Section 2007, the Rural Energy for American Program (REAP)
$130M for Section 9008, Biomass Research and Development
$193M for Section 9011, the Biomass Crop Assistance Program

In total, the provisions provide $835 million over five years.

In addition, a House subcommittee on small business held what was described as a “very receptive” hearing on the advanced biofuels industry, featuring a comparatively bipartisan attitude based on a “what do you need” for an “all of the above” energy strategy.”

In other Capitol Hill news, the Department of Energy is now receiving Senate approval to move $100 million in previously authorized funding to support its advanced biofuels partnership with the US Navy, and the US Department of Agriculture, which pledged $510 million last year under the Defense Production Act to invest directly in commercial-scale biofuels facilities to assure a supply of military biofuels at affordable prices.

The AFBA’s McAdams said, “When thinking people look at this, they know that have to allow every form of domestic energy to come forward. There’s more sensitivity now towards the benefits of a portfolio approach, and an increasing receptiveness to the idea that you can’t build an industry without policy certainty.”

McAdams credited a “broader coalition working together — the farm sector, advanced biofuels, the airlines, over 100 groups coming together in a grand coalition” as a critical part in assembling the level of support needed to save funding for the USDA’s programs with advanced biofuels.

The Advanced Ethanol Council’s executive director, Brooke Colman, said: “The Advanced Ethanol Council (AEC) applauds the leadership of the Senate Agriculture Committee, and specifically Chairwoman Stabenow and Senators Conrad and Lugar, in assuring continued mandatory funding for critical USDA energy title programs. There is no more urgent need in this country today than creating new jobs and reducing our dependence on foreign oil.

“The programs reauthorized and streamlined today are doing just that, and will continue to help the United States create jobs and replace foreign oil with homegrown, renewable energy production when signed into law. While it is very important to also address the tax piece for advanced biofuels by the end of the year, this is a critical first step toward providing continuity for American farmers and advanced biofuel producers while exceeding the committee’s goals for deficit reduction.”

BIO’s Executive VP for Industrial Biotechnology, Brent Erickson added, “The Farm Bill’s energy programs have had a tremendous positive impact in revitalizing rural America and helping new agricultural markets emerge. These programs have helped clear the path for companies to secure financing to build innovative biorefineries that will reduce our reliance on imported oil. They already have helped farmers put more than 150,000 acres of underutilized farmland into production of next-generation energy crops. And they’ve sped the development of biomanufacturing innovation, demonstration and early commercialization. In the short time that these programs have operated, they’ve achieved a high rate of return in supporting the start up of renewable chemical, advanced biofuel and biomanufacturing companies, as a timeline of the programs demonstrates.

There is still considerable doubt as to whether a Farm Bill will proceed forward, during the 2012 election season. Reportedly, Senate Agriculture chair Debbie Stabenow is working with Senate Majority Leader Harry Reid to schedule time for the Farm Bill before the July 4th recess.