Obama strikes: DOE to provide $786 million in new bioenergy funding, USDA to accelerate release of Farm Bill funds; DOE, EPA, USDA group formed

In Washington, Secretary of Energy Steven Chu announced that the DOE will provide $786.5 million from American Recovery and Reinvestment Act funds to accelerate advanced biofuels research and development and to provide additional funding to accelerate completion of commercial-scale biorefinery demonstration projects.

The focus of the advanced research effort will be what the Department describes as third-generation fuels, also known as drop-in fuels. These include green gasoline, diesel, and jet fuels. The DOE’s Biomass program will leverage DOE’s national laboratories, universities, and the private sector in the effort.

The $786.5 million in Recovery Act funding is a mix of new funding opportunities and additional funding for existing projects, and include:

$480 Million Solicitation for Integrated Pilot- and Demonstration-Scale Biorefineries

Projects selected under this Funding Opportunity Announcement will work to validate integrated biorefinery technologies that produce advanced biofuels, bioproducts, and heat and power in an integrated system, thus enabling private financing of commercial-scale replications.

DOE expects to make 10-20 awards for in this category, at various scales and designs, with all of them to be operational by the end of 2012. The funding ceiling is $25 million for pilot-scale projects and $50 million for demonstration scale projects.

$176.5 Million for Commercial-Scale Biorefinery Projects

$176.5 million will be used to increase the federal funding ceiling on two or more demonstration- or commercial-scale biorefinery projects that were selected and awarded within the last two years. The goal of these efforts is to reduce the risk of the development and deployment of these first-of-a-kind operations. These funds are expected to expedite the construction phase of these projects and ultimately accelerate the timeline for start up and commissioning.

In a related announcement, the President directed Secretary of Agriculture Tom Vilsack and the USDA to begin refinancing existing investments to maintain jobs, and within 30 days, make available all financing opportunities included in the 2008 Farm Bill. These include biorefinery loan guarantees, expedited funding to replace fossil fueled boilers with biomass, expedited funding to biofuels producers to encourage production of next-generation, biofuels from biomass and other non-corn feedstocks, combination and expansion of existing rural energy programs to include hydropower, energy audits, and higher loan guarantee limits; and guidance and support for collection/harvest/storage/transport of biomass.

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