Please share this video far and wide! Post it on your website, Facebook page, Twitter account, etc. Share it on your friends’ pages and your legislators’ pages, too!

(ALERT: While REFRESH is a positive step in the longer term, an immediate priority is next year’s budget. Please add your voice now to those opposing unfair cuts to REAP and BCAP. Time is of the essence – Congress may take further action very soon. Thank you.)

REFRESH provides nearly $1.3 billion in mandatory appropriations for five different clean energy programs with significant additional discretionary funding authorizations.  In particular, REFRESH includes annual funding of $70 million for the REAP program and an additional $80 million annually in discretionary funds.  The legislation also extends REAP to assist our nation’s rural schools with energy efficiency programs.

The legislation also supports the development of energy crops with the BCAP program.  REFRESH proposes to fund BCAP at $55 million dollars a year, with an additional $150 million a year in discretionary funding, while working to improve the program in several important respects. REFRESH includes complementary loan guarantee financing for biorefineries by continuing the Biorefinery Assistance Program for two more years.

REFRESH also adds a new Rural Energy Savings Program for rural electric cooperatives and others to help their customers save energy and money. REFRESH also extends the Biobased markets program.

Without reserving comment on the merits of the entire proposal, we applaud Senator Lugar and Representative Stutzman for recognizing that America’s the great potential for renewable energy from the heartland.  REFRESH affirms the value of energy for rural America, and the win-win of clean energy for rural economic development, energy security and environmental quality.

ELPC and the Environmental and Energy Study Institute (EESI) gathered experts on agriculture and clean energy development in Washington on Tuesday, July 19 to address the Rural Energy for America Program (REAP) and other Farm Bill energy programs. Speaking to over 150 staffers and stakeholders in separate House and Senate briefings, they explained the broad benefits of these programs for farmers, businesses, economic development and national energy security policy.

Panelists were:

• Bruce Knight, Dairy Advisor for Strategic Conservation Solutions, LLC and former Chief of the Natural Resources Conservation Service at the USDA under President Bush. Download presentation (PDF).
• Bennie Hutchins, Principal, Ag Energy Resources, Mississippi. Download presentation (PDF).
• Bill Midcap, Farmer and Rural Development Specialist, Rocky Mountain Farmers Union, Colorado. Download presentation (PDF).
• Andy Olsen, ELPC Senior Policy Advocate. Download presentation (PDF).

Other speakers at the briefings included EESI Executive Director Carol Werner and ELPC Director of Federal Relations Karen Torrent.

Energy Title Overview

The first panelist, Andy Olsen, provided a high level overview of how the Farm Bill is accelerating energy savings and clean energy production, supporting rural economic development in the process. Olsen emphasized that the private sector has responded positively to these programs with ingenuity and the American “can do” spirit. For example:

• Advanced biofuels production – The USDA has moved quickly with the Biorefinery Assistance Program, providing loan guarantee financing to build cellulosic ethanol, community digester, and other biofuels/biopower facilities. USDA is accelerating approval of these guarantees and plants are now under construction in several states, with a concentration in the Southeast.
• Energy crops – Although the Biomass Crop Assistance Program got off to a rocky start in 2009, the USDA made several key changes and the 2011 program is now back on track. USDA refocused BCAP on energy crop development and now more than 95% of all funding is for establishing and growing energy crops. BCAP should be judged on the basis of the 2011 program.

Focus on the Rural Energy for America Program

Olsen and the other speakers also highlighted how the Rural Energy for America Program (REAP) serves every agricultural sector in every state, sparking private sector investment and innovation and retaining and creating much needed jobs in rural America.  REAP now has helped to finance more than 6,000 projects across the country – see map below.

Bennie Hutchins

Bennie described the growing popularity and use of REAP in the South, focusing on the strong benefits to poultry producers in slashing energy costs and producing renewable energy. REAP also has helped fund energy projects in aquaculture and forestry. Hutchins emphasized the great benefits for rural small businesses, such as “Mom and Pop” grocers who can use REAP to cut energy costs.

Bruce Knight

Bruce described how consumer demand has led the dairy industry to shift towards more sustainable practices through the whole dairy supply chain. Sustainability is “no longer a philosophical movement,” he said, “it’s now a consumer response.” Knight added that the dairy industry has been very responsive to this consumer demand, pursuing a broad and aggressive program to cut energy use and produce renewable energy and other coproducts from cow manure.  REAP is key to many of these efforts.

Bill Midcap

Bill explained that electric cooperatives are member owned and many of them offer great opportunity for locally-owned projects. He showed how many rural electric cooperatives have used REAP in innovative ways, such as: using the energy audit and renewable energy development assistance program to identify new projects; using feasibility study funding for their own coop-owned projects; grants to build their own systems; and combining multiple projects on customer properties under one master grant. He stressed that “REAP plus rural electric cooperatives can turn electric consumers into electric producers.”

Video

Click here to view the embedded video.

Tuesday, July 19, 2011
10:00 – 11:30 a.m.
1302 Longworth House Office Building

Tuesday, July 19, 2011
2:00 – 3:30 p.m.
188 Russell Senate Office Building

The Environmental Law and Policy Center (ELPC) and Environmental and Energy Study Institute (EESI) invite you to a briefing on the energy title of the farm bill, with a special focus on the Rural Energy for America Program.

Big decisions loom in the next Farm Bill, including for key farm energy programs. The Rural Energy for America Program (REAP) incentivizes a broad range of energy efficiency and renewable energy technologies for all agricultural sectors across the country. As a result, thousands of rural producers and businesses are slashing energy costs with energy efficiency and renewable energy. They also are earning new income from renewable energy and creating new jobs, income, and wealth across rural America. This briefing will provide an overview of the Farm Bill Energy Title, as well as specific examples of dairy and poultry producers, rural electric cooperatives, and other rural producers and small businesses from across the country that have benefitted from the REAP program.

Speakers will include:

• Bill Midcap, Farmer and Rural Development Specialist, Rocky Mountain Farmers Union, Colorado
• Bruce Knight, Dairy Advisor, Strategic Conservation Solutions, LLC, and former Chief, Natural Resource Conservation Service, U.S. Department of Agriculture, Washington, D.C.
• Bennie Hutchins, Principal, Ag Energy Resources, Mississippi
• Andy Olsen, Environmental Law & Policy Center, Wisconsin

This briefing is free and open to the public. No RSVP required.

(May 24, 2011) Today the House of Representatives’ Agriculture Appropriations Subcommittee will  vote to eliminate the popular and effective Rural Energy for America Program (REAP) in its 2012 appropriations bill. REAP is the only federal program successfully helping farmers and rural small businesses fight high energy costs with renewable energy systems and energy efficiency.

“Killing REAP leaves agriculture and rural businesses at the mercy of high oil and electricity prices,” said Andy Olsen, ELPC Senior Policy Advocate.

Each year more farmers and rural businesses have used REAP, with demand far outpacing the available funding. Since 2003, REAP has helped nearly 6,000 farmers and rural businesses in every state in the U.S. with grants and loan guarantees to help finance new clean energy and energy efficiency projects, drive private investment and save many millions of dollars each year on energy costs.

“The House could not be sending a clearer signal that they don’t care about rising on-farm energy prices,” said Mr. Olsen. “This ‘do-nothing” approach strikes at the heart of America’s ‘can do’ attitude.”

Last year Congress sliced total REAP funding by 25%, even as demand for the program continued to increase. This year’s draconian action would be a far more serious setback to energy independence and rural economic development.

In stark contrast, the Subcommittee is planning to maintain funding for the Rural Utilities Service’s major electric cooperative loan program at $6.5 billion, which is $500 million more than the President’s budget request. “These skewed priorities give farmers and rural businesses short shrift,” said John Moore, ELPC Senior Attorney.

The Subcommittee also is planning to cut the Biomass Crop Assistance Program (BCAP), which is producing results in helping farmers grow energy crops for fuel and power. “Eliminating the BCAP and REAP energy programs today is like leaving your wedding before you say ‘I do,’” said Steve Flick, President of the Show Me Energy Cooperative in Missouri.

On May 5, 2011, USDA Secretary Tom Vilsack announced the approval of the first Biomass Crop Assistance Program (BCAP) project area, covering approximately 50,000 acres in 38 counties in Missouri and Kansas.  The project area application was designed and submitted by the Show Me Energy Cooperative of Centerview, Missouri, which now has more than 612 producer owners.

Individual farmers within the boundaries of the project area can now sign contracts with USDA to grow dedicated energy crops.  Producers who sign contracts can receive payments of up to 75% of the cost of establishing a new energy crop, as well as annual payments for up to 5 years while the crop matures.

The energy crops should support environmental quality.  According to Show Me Energy, farmers in the project area will grow dedicated energy crops of native grasses on marginal land, “using best conservation practices to protect soil and water resources.”  Show Me’s plant in Centerview will pelletize the crops into biomass fuel for space heat and electric power and, eventually liquid fuels that replace gasoline and diesel.

USDA’s approval of the Show Me project area comes nearly 3 years after Congress approved BCAP as part of the 2008 Farm Bill, and more than 6 months after publication of the final BCAP rule last fall.  This serious delay in the implementation of the most critical part of the BCAP program, in addition to costly outlays for BCAP matching payments in 2009 and early 2010, has led some to call for Congress to scrap the program.

Eliminating BCAP would be a mistake, as there is no other comprehensive federal program dedicated to helping farmers and foresters reduce the financial and other risks of developing energy crops in a sustainable manner.  With biorefinery plants now gaining traction and strong interest in biomass for heat and power, now is the wrong time to turn away from energy crops that help to achieve energy self sufficiency while protecting soil, water and wildlife habitat.

ELPC hopes that the Show Me project area will be a true “success story” that will drive the approval of similar projects and help realize the energy, environment and rural economic development potential of BCAP.

Steve Flick, founder and Board President of Show Me Energy Cooperative sounded an optimistic note: “For our part, we at Show Me firmly believe that farmers have a lot to contribute toward making our country less dependent on foreign oil. With BCAP now in place, we are ready to plant, baby, plant!”

(April 20, 2011) USDA issued a notice yesterday setting a deadline of May 27, 2011 for submission of Biomass Crop Assistance Program (BCAP) project area proposals for Fiscal Year 2011.  State-level USDA teams are required to complete their review of submitted applications by June 10. The deadline for a final, national-level review of applications sent up by state offices is June 24. This is a change from the final BCAP rule published last October, which anticipated USDA accepting applications on a rolling or on-going basis with no deadlines.

This new, compressed schedule follows the recent enactment of the full year federal budget bill for 2011 that caps total federal spending on BCAP at $112 million through the end of this fiscal year.  This cap reduces BCAP funding by $84 million from USDA’s projected needs of $196 million for BCAP in 2011.  Clearly, the US will see far less progress on sustainable energy crops due to this reduction.

USDA did not indicate in the notice, or in other documents published by the Farm Service Agency (FSA), how it will weigh or evaluate project area applications against each other in awarding funding. USDA will also make a determination whether to require further environmental review by June 24.

Reminder:  The BCAP project area program is intended to encourage the establishment of new, sustainable energy crops by paying producers who are part of an approved project area, up to 75% of reasonable costs to establish dedicated energy crops along with annual support payments. More discussion on the rules is available here.

Interested project area sponsors are encouraged to complete and submit their applications as soon as possible.  You can access and download all necessary instructions and notices from FSA’s BCAP website, namely BCAP-20, 21 and 22 and accompanying notices.  Applicants are also encouraged to contact their state FSA offices for information and support.  At least one participating biomass conversion facility with all necessary permits is required for all project area applications.

BCAP matching payment delay for woody biomass through summer 2011

USDA also announced yesterday that it would not make BCAP matching payments available for woody biomass until this summer. At the same time, USDA made it clear these payments would be subject to certain limitations, including identified needs, environmental concerns and limited funds.  Establishment and annual payments under the project area program would still be available for woody biomass (presumably short rotation woody biomass crops) in approved project areas.

Priority for project area proposals positive step forward for BCAP program

ELPC has long advocated that USDA and FSA target the majority of BCAP program funds for project areas and new energy crop development. A tight budget cap has forced the agency to take this sensible policy approach and prioritize approval and funding of project areas before depleting program resources to make matching payments for woody biomass resources.

This is a real concern, because USDA’s previous implementation of BCAP resulted in hundreds of millions of federal dollars spent to support existing uses of woody biomass, with minimal development of new supply chains or new biomass resources. This mistake nearly de-railed the program, creating distortions in the wood products market and generating significant public and Congressional backlash against BCAP.  It also delayed the implementation of the project area program, which is the only part of BCAP that actually supports the production of new energy crops.

Because of the outcry over USDA’s implementation of the matching payment program in 2009 and 2010, USDA decided to restrict the types of woody biomass that could qualify for matching payments in the final BCAP rule.  However, USDA did not cap the amount of BCAP funds allocated to the matching payment program, which means that limited program funds could still be diverted to support primarily existing sources of woody biomass – even under the new restrictions — and not the development of new energy crops (including short rotation woody biomass crops) and new biomass supply chains.  Therefore, ELPC was pleased that USDA decided to prioritize funding for 2011 project areas, hopefully avoiding the pitfalls that previously plagued the program.

• Rural Energy for America Program, Section 9007. Cut from total $99.34 million in 2010 to $70 million in 2011.
• Biomass Crop Assistance Program, Section 9011, is denied administrative funds, effectively killing the program.
• Bioenergy Program for Advanced Biofuels, Section 9005 is reduced by $28 million.
• Biorefinery Assistance Program Section 9003 is reduced by $56 million.

Congress has an alternative to continue funding the federal government next year: The Continuing Resolution already passed by the House continues operations based on the 2010 appropriations.

These cuts came as the 2008 Farm Bill clean energy programs are just delivering results. A number of awards for long-awaited advanced biofuels projects are on the way. The Rural Energy for America Program has already helped thousands of America’s farmers and ranchers save money with energy efficiency and develop new income with diverse and modern renewable energy technologies like biogas, wind, solar and more.

UPDATE DECEMBER 22:

Good News for Energy Title programs - Senate leadership dropped efforts to pass the Omnibus. Instead, on December 21, the Senate passed (and the House agreed with) another stopgap continuing resolution that would maintain FY 2010 spending levels through March 4.

Thanks to everyone who told their Senators to oppose cutting Energy Title programs at this critical time. Stay tuned as we head in the New Year, since we can expect more attacks on clean energy development funding.

ELPC Reaction to Final BCAP Rule

ELPC welcomes publication of a BCAP rule that will finally and fully implement the entire BCAP program.  However, ELPC is disappointed that the final rule fails to ensure the majority of program resources will support sustainable perennial energy crop production.  No funding limitations are placed on the collection of existing biomass materials and the final rule does not require a competitive review process to give priority consideration to the most environmentally and economically sound BCAP projects.

A scoring or similar system is critical to the long-term success of the BCAP program. ELPC believes that given limited resources and time to implement the BCAP program through 2012, incentives for the most environmentally beneficial projects is necessary to maintain public and Congressional support for BCAP.

Addtionally, the final rule projects that the majority of BCAP funding will continue to support the collection of biomass feedstocks regardless of their environmental impact, rather than establishing new sustainable energy crops. Finally, ELPC is puzzled by USDA’s decision to bias the crop establishment program in favor of biofuels development over other uses like biopower production.  As the very name of the Biomass Crop Assistance Program indicates, USDA/FSA should focus on the feedstock rather than the product.

Bottom line:  the final BCAP rule leaves a lot of detail to be determined or developed during the implementation process. Therefore, ELPC will be actively involved in BCAP implementation going forward and will continue to advocate for the development of an economically and environmentally sound program that is sustainable over the long-term.

BCAP Background

Congress enacted BCAP in 2008 as part of the Farm Bill’s Energy Title.  BCAP provides incentives for bioenergy feedstock development to support the production of advanced biofuels and renewable energy.  To achieve this goal, BCAP provides financial support for the following activities:

1. The collection, harvest, storage and transportation (CHST) of biomass materials for conversion to heat, power, advanced biofuels or bioproducts; and
2. The establishment and production of energy crops in project areas for use at facilities that convert biomass to heat, power, advanced biofuels or bioproducts.

Unfortunately, BCAP has been subject to delays and controversy.  In June of 2009, in advance of any rule-making or environmental review, USDA issued a Notice of Funds Availability (NOFA) for CHST, making matching payments available for the delivery of biomass to qualified conversion facilities.  No funds were made available for establishing energy crops.

USDA soon spent more than $200 million under the NOFA, primarily for non-Federal woody biomass that was being collected prior to BCAP.  This vastly outstripped Congressional projections of $70 million for the entire program through 2012 and led to Congressional spending limitations of $500 million in 2010 and $400 million (approx) in 2011.  Few BCAP dollars were spent to develop new biomass feedstocks, despite Congressional intent for the program.

For further background information, you can browse FarmEnergy BCAP stories here.

BCAP Timeline

Biomass Crop Assistance Program (BCAP) Final Rule

The final BCAP rule makes few substantive changes to the draft rule.  Most changes were made to the CHST provisions to address, in part, concerns raised about adverse impacts of the CHST program on wood markets and the lack of adequate and enforceable sustainability standards for biomass harvest.  Additionally, USDA/FSA secured a waiver of the required 60-day Congressional review period for major rules, allowing the rule to go into effect immediately.

Highlights and Changes From Proposed BCAP Rule

CHST Matching Payments:

• Restricts materials that will qualify for CHST matching payments to renewable biomass:

1. harvested and collected from the land, and/or separated from a higher-value product before delivery to a Biomass Conversion Facility (BCF);

2.  that does not supply a distinct local market for higher-value products ;

3.  that is harvested in accordance with an approved conservation plan, forest stewardship plan, or equivalent plan;

4.  for wood, only material that is diseased, unsuitable for timber harvest, or removed to reduce fire risk or restore ecosystem health.

Comment on woody biomass:  These restrictions apply to all woody biomass material collected from BOTH federal and non-federal lands (outside of BCAP project areas).  Previously, limitations on qualifying woody biomass applied only to woody biomass (or residues) sourced from federal lands.

• The rule does not tier CHST matching payments based on energy or environmental considerations, or type of material.  All eligible materials may receive up to $45/dry ton, regardless of environmental impact.

Establishment and Annual Payments:

• FSA will accept project area applications on a continuous basis (which FSA compares to the continuous sign-up process under the Conservation Reserve Program (CRP)), with no deadlines or competitive selection process.  No changes or additions were made to the selection criteria although “additional selection criteria may be developed.”

• A project area proposal must identify specific geographic boundaries and must be physically located near a BCF. FSA will decide on a case by case basis an appropriate location for the BCF relative to the proposed project area; the project area proposal must also describe sources of renewable biomass.

• Small and pilot-scale facilities are eligible for the program.

• Establishment payments will comprise an actual or average 75% cost-share for the “cost-effective” establishment of an “eligible practice.”  FSA, in accordance with CRP protocols, “will” establish market-based rates for standard practices such as land preparation, seed purchases and chemicals, etc.  Therefore, the actual establishment payment received by a producer may be less than 75% of their total cost.

• No change was made to the calculation of annual payments, which will be based on CRP regulations and “as determined” by FSA. Specific annual payments will be posted at FSA county offices as FSA still says it would be too complicated to post online.

• No explicit process was established for setting annual incentive payments (except “as determined by” USDA/FSA). Individual project area sponsors or producers will be responsible for proposing and justifying incentive payments.

• If a producer harvests and sells an eligible crop while still receiving annual support payments, these payments will be reduced in a tiered fashion depending on whether the crop is sold to produce cellulosic biofuels (payment reduction of 1%); advanced biofuels (payment reduction of 10%); heat, power, or biobased products (payment reduction of 25%); or for any other purpose (payment reduction of 100%).  FSA says the cellulosic biofuels preference is intended to further the goals of the Renewable Fuel Standard.

Conservation and Forest Stewardship plans:

• Plans are now required for all BCAP participants receiving CHST matching payments and establishment and annual payments.  Definition of conservation plan changed somewhat to include BCAP specific terms.

• Plans must be implemented and prepared in accordance with BCAP guidelines to be “established and determined” by FSA.  ELPC is monitoring that process.

• FSA states it will use the Natural Resource Conservation Service and state foresters, or private technical assistance providers, to provide assistance with conservation and stewardship plans.  Individual plans will be “site-specific.”

• FSA retains the authority to waive conservation district review of individual producer conservation plans, in the event a district declines to review or approve a plan.  This does not mean the requirement for a plan is waived.  However, FSA does not directly address what happens if a district declines to approve a plan saying only that farmers shouldn’t be harmed if a district declines to review a plan.

• Some site-specific environmental review will be required, both of project area proposals and individual producer contracts.

Moderated by ELPC Staff Attorney and Policy Advocate Karen Bridges, the briefings focused on the federal Farm Bill’s Biomass Crop Assistance Program, or “BCAP.” Sustainable biomass and biofuel crops could become an important clean energy resource, but farmers want to be sure there’s a market for these crops before they plant them, and power producers want to be sure there’s a supply of these crops before they buy them. BCAP was intended to help break this “chicken and egg” dilemma by offsetting a portion of the costs of growing and harvesting new energy crops and other biomass feedstocks.

Congress passed BCAP in the 2008 Farm Bill, and the U.S. Department of Agriculture (USDA) is just starting to fully implement it. USDA work is off to a somewhat rocky start, and very little of the program’s resources are being directed to new, sustainably grown energy crops. Although a wide variety of views was presented, the speakers agreed that BCAP was a program worth “getting right,” and that it’s time for USDA to redirect resources to the production side of the program.

With this briefing and related activities, ELPC is seeking to persuade USDA to hard-wire strong environmental protections in the BCAP rules and prioritize the right energy crops for development. If grown and harvested correctly, BCAP can boost on-farm income, help rural communities, and improve environmental quality.

Click here to view presentations on BCAP from National Wildlife Federation, Anna Rath, Show Me Energy Cooperative and University of Illinois.

For more information on BCAP and other Farm Bill Energy Title programs, please click here .