Farm Energy

“American farmers and rural businesses are successfully using the Rural Energy for America Program to leverage billions of dollars in private investment for successful new renewable energy and energy efficiency projects. These new energy projects are good for rural economies, good for the environment and good for our national energy security.” —Senator Tom Harkin (D-Iowa)

“Rural America possesses the resources and spirit to lead our nation away from dependence on foreign oil and non-renewable sources of energy. Building on the 2002 Farm Bill efforts, the 2008 Farm Bill is now expanding opportunities for farmers, ranchers and small businesses to conserve energy and produce clean renewable energy. Programs like the Rural Energy for America Program provide the resources to transform practical ideas to save or produce energy into a reality. This kind of commonsense program will help transform rural America into an energy resource for the entire nation.” —Representative Collin Peterson (D-Minnesota)

“America needs a bold, new energy vision, and the Rural Energy for America Program can help. Our sustainable energy future must include the integration of energy efficiency and new technologies powered by clean renewable sources, such as wind, solar, biomass and biofuels. REAP funds a wide range of renewable energy projects that stimulate rural economies, help create jobs and address environmental concerns.” —Representative Jeff Fortenberry (R-Nebraska)

“I strongly support the Rural Energy for America Program because it is one of the only federal programs that comprehensively transforms a clean energy development vision into action across agricultural America. From the time when we created this program in the 2002 Farm Bill to the nationally successful program today, we have cemented our commitment to transition rural and agricultural America toward a future that treats energy as a strategic resource which must be conserved, protected and produced. There is no turning back. America must break its foreign fuel dependency. The science of renewable energy rests in agriculture and unlocking the full potential of the carbohydrate molecule.” —Representative Marcy Kaptur (D-Ohio)

A new report from the Environmental Law & Policy Center (ELPC) unearths the stories of farmers and rural small businesses that are making clean energy their newest cash crop. (more…)

REAP is one of an array of innovative farm  energy programs in the 2008 Farm Bill. Taken together, these programs provide a great opportunity to produce more clean energy from farms, ranches, other agriculture operations and rural small- and medium-sized businesses.

Total mandatory funding for the Energy Title averages $280 million a year, compared to $160 million annually in the 2002 Farm Bill. However, comparing the 2002 and 2008 Farm Bills is not “apples to apples” – program funds are now allocated differently and more favorably for cleaner energy. For example, mandatory funding for REAP more than doubled from $115 million to $255 million. The 2008 Farm Bill also includes $400 million in cellulosic ethanol tax credits.

Biomass Crop Assistance Program (BCAP )

This program provides incentives for farmers and others to grow and harvest sustainable biomass energy crops like switchgrass and other prairie grasses or fast growing trees. BCAP helps to solve the “chicken or egg” dilemma that is delaying the commercialization of advanced biofuels – no markets for energy crop producers and no energy projects because no supply of energy crops. By providing grants for establishing, growing, harvesting, collecting, storing and transporting energy crops, BCAP can encourage farmers to grow low-carbon, sustainable energy crops at a profit.

Biorefinery Assistance

Inconsistent federal funding has delayed commercialization of advanced biofuels like cellulosic ethanol. The Biorefinery Assistance program provides grants and loan guarantees for emerging technologies. Demonstration scale plants are eligible for grants up to 30% of costs, and commercial scale plants are eligible for loan guarantees for up to $250 million per plant.

Repowering Assistance

This program helps ethanol plants reduce their carbon footprint and pollution by burning energy crops and other renewable biomass instead of coal or natural gas in plant boilers. In addition to cutting pollution, the program helps to create new markets for energy crops.

Other Programs with Mandatory Funding

• Biomass Research and Development. Accelerates new biomass energy technologies through cost-share funding for research by companies, universities and government.
• Bioenergy Program for Advanced Biofuels. Pays biofuels producers to produce advanced biofuels, defined as most biofuels except corn starch-based ethanol.
• Biobased Markets Program. Expands the federal preference for biobased product labeling guidelines.
• Biodiesel Fuel Education Program. Continues this existing program.
• Biofuels Infrastructure Study. USDA to assess the infrastructure requirements for biofuels production and transport.

Other Programs with Only Discretionary Funding (subject to appropriations)

• Rural Energy Self-Sufficiency Initiative. Helps rural communities improve energy independence through building improvements and renewable energy production.
• Forest Biomass for Energy. Research and development to encourage use of “low-value” forest biomass for energy. Helps state and local governments install wood energy systems in community facilities.
• Renewable Fertilizer Study. USDA to assess the viability of producing nitrogen fertilizer from renewable resources (such as wind power) in rural areas.

Tax Credit Incentives

A new cellulosic biofuels production tax credit for up to $1.01 per gallon is available through 2012. This credit will be available for cellulosic biofuels produced from agricultural waste, wood chips, perennial energy crops and other non-food feedstocks. Congress helped to pay for that credit and other tax credits in the Farm Bill by reducing the volumetric ethanol excise tax credit (“blender’s credit”) from 51 cents to 45 cents per gallon, subject to some limitations.

Other Provisions

Several other provisions in the 2008 Farm Bill either directly or indirectly encourage more farm-based energy production and energy efficiency. For example, Title II of the bill significantly increases the size of the Conservation Stewardship Program (formerly the Conservation Security Program), which among other things encourages farmers to use energy-saving best practices. A new Sun Grant program in the Research Title encourages biobased energy technology development (although this program did not receive any mandatory funding), and other Research Title programs also focus on clean energy development.

Elkton, South Dakota

Geothermal Heat Pump

$65,000 Grant + $65,000 Loan Guarantee

2007

When Steve and Diane Hammer looked into expanding their meat locker business to a full service grocery store, the town of Elkton had been without a grocery for several years.

They had already developed acumen for the meat business, satisfying both customers and judges with “Big Daddy’s Meats.”

Now, with the help of a $65,000 REAP grant, the Hammers were able to bring a grocery store back to their small town in an environmentally-sustainable and cost-effective manner. “We were looking for a way to cut costs,” said Steve.

What they found was a clean, renewable geothermal heat pump system that would save them money. “Our facility is now heated and cooled entirely by geothermal energy,” he continued. Geothermal presents a great opportunity for rural small businesses across the region to tap into renewable energy, and REAP is a part of realizing that potential.

“Could wehave done this project without REAP? Probably not,” said Steve. The Hammers also received small loans and grants from the South Dakota Office of Economic Development.

“We’ve seen considerable energy and cost savings,” he noted. “With the way the president would like to ‘go green’ I think that this program should play a larger role; we should get more of these projects funded.”

Red Lodge, Montana

Solar Thermal

$26,390 Grant

2008

Sam Hoffman started brewing beer in 1998, taking advantage of locally grown barley, hops and the clean mountain waters that flow through the small town of Red Lodge just north of Yellowstone National Park. Today, Red Lodge Ales may now be one of the “greenest” breweries in the country.

When Sam needed to expand his operation, he wanted to incorporate more green energy into his new facility and adopted several innovative approaches in solar energy with the help of a $26,390 REAP grant.

The new Red Lodge Ale facility sports an array of solar hot water panels that will provide space heat through floor heating in the winter, while providing hot water in the summer. Hoffman also constructed a biodiesel production unit, using waste grease collected from his customers. Delivery trucks now drop off beer and pick up grease, which is then used to fuel the Red Lodge delivery fleet.

Other innovations adopted by Hoffman include a “Freeaire” refrigerator system for his large coolers that exchanges chilly Montana air from outside during the winter months, drastically cutting his electric load and extending equipment life.

He’s also added wood stoves for sustainable heat and ambience in public areas.

Unfortunately, the Red Lodge Ales are only available in Montana, Wyoming and the greater Yellowstone region. But maybe, with Hoffman’s ingenuity and drive, we’ll be able to enjoy this “green” beer around the country very soon.

Roseau, Minnesota

Geothermal Heat Pump
$7,920
2007

Shirley Hovda knows the financial strain that can come from heating businesses through the long winters of the upper Midwest.

Her Quality Decorating company, which specializes in custom wood finishing and coatings, is located in Roseau, a northern Minnesota town famous for its local high school hockey team. In February 2007, Hovda faced a “body check” of her own, courtesy of a $1,200 natural gas bill.

The high heating costs convinced her that a change was needed. After researching a number of options, Hovda settled on a geothermal system to heat her newly constructed 6,000 square foot facility. With help from a $7,920 grant through REAP, she was able to purchase and install the system in January of 2008.

Geothermal heat pumps are a good fit for many businesses because they work efficiently in both the winter and the summer, heating or cooling, and replacing two separate systems. Hovda was attracted to geothermal for its efficiency and for the fact that it can operate year-round.

The system at Quality Decorating consists of a well that is dug into the ground which pumps groundwater through pipes in the building. The heat pump technology provides heating and cooling, as needed, through both in-floor and forced air mechanisms

Hovda has been very pleased with the unit’s reliability. But the true satisfaction, she says, will come from seeing energy bills that are 40% lower than in the past.