The Notice of Funds Availability was issued on June 11th, and USDA is now accepting applications from both farmers and biomass conversion facilities wishing to participate in this part of the program.  Applications will be considered on a rolling basis and no deadline for applications has been set.  See your county Farm Service Agency (FSA) office for more information on applying for BCAP CHST payments.

The regulations and funding for payments for energy crop establishment are under BCAP are expected later this year, in time for sign-ups to occur for the 2010 crop year.  The USDA is currently in the process of preparing a Programmatic Environmental Impact Statement for BCAP and plans to issue proposed rules for the establishment portion of the program rather than another NOFA.

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Almost 60 percent of people taking the survey preferred the that USDA implement the program on a broad basis rather than the more limited implementation option described in the scenarios USDA created for the purposes of performing an Environmental Impact Statement (EIS).

Many comments left by those supporting broad implementation were similar to the specific comments of one respondent, who said, “Farmers need a variety of options because conditions are so different from state to state, region to region. The program needs to try a variety of tactics to see what works and what is less successful.”

Many of the survey questions results were fairly balanced, but overwhelming consensus emerged on one particular question.  When asked to rank the importance of the various selection criteria included in the law that created BCAP, 98.9% of the people who took our survey rated soil, water and related resources as either “very important” or “important,” with 91.1% classifying it as “very important.”  No other question response came even close to that level of agreement amoung participants.

You can see the results of the closed-ended questions here, but the open-ended questions also yielded some very interesting results.

When asked what other land types besides those listed in the statute should be included, 76 people responded and the most common responses included:

• 23 people thought that reclaimed mineland or other reclaimed land should be included
• 21 people opposed including mature forests, wetlands or lands that were not previously used for agriculture
• 10 people supported the inclusion of marginal lands, non-tillable lands and roadsides

Sixty-nine people responded to our question about what types of conservation considerations should be included in forest stewardship and conservation plans that are required for land enrolled in BCAP:

• 29 favored inclusion of habitat conservation and management or avoiding harvesting during nesting and brooding seasons
• 17 listed water quality
• 13 mentioned nutrient management
• 13 listed erosion control and soil conservation

When asked how USDA could use existing programs and infrastructure to implement BCAP, 26 people responded:

• 12 favored modification and use of existing programs such as EQIP
• 10 listed use of Natural Resources Conservation Service (NRCS) and Farm Service Agency (FSA) staff and infrastructure with appropriate additional training and personnel

Finally, we asked people to provide any other general comments.  The 36 people responding to this question provided a variety of input.  While there was no theme voiced by a majority, the 3 most common responses were:

• 6 people said that the life cycle greenhouse gas footprint of biofuels should be considered in implementation of the program
• 5 are opposed to the BCAP program or feel priority for renewable energy development should focus on wind and solar energy sources
• 4 expressed support for finding alternative sources of biomass for energy, such as algea and switchgrass

ELPC will continue to solicit input and use input from others to inform our future comments and advocacy to USDA with the goal in mind of timely and efficient BCAP implementation that works for both farmers and bioenergy producers while protecting natural resources.

Thanks to all who took the time to send us your thoughts on this important program.

This program, if taken up by local farm energy leaders, can spur a new climate-friendly and farmer-friendly energy source. BCAP, implemented well, could make a major difference for our energy future.

While a great hope for tapping energy crops centers on making ethanol, energy crops can be also be used for fuel for heat and/or power. Prairie grasses have been used for utility boiler fuel co-fired (or blended) with coal. In several instances around the country, entrepreneurs are making fuel pellets from switchgrass. BCAP can accelerate the most successful of these approaches.

Below please find a basic summary of the program, its intent and how it works.

Contents

Purpose
BCAP Funding
Timeline for Implementation
Eligibility
Energy Crop Production Incentives
Harvest, Transport, Processing and Storage Co-Pay

Purpose

The BCAP was designed to support agricultural producers in producing biomass crops and collecting biomass for sale to commercial-scale facilities that commit in writing to use the biomass to produce fuels or power.  The program is also intended to improve water quality through reduced water use and surface water protection. Environmental quality can increase with less fertilizer compared to traditional row crops and encouraging the use of perennial crops, which are better for soil, air, water and wildlife.

The program has two distinct pieces: 1) biomass crop establishment; and 2) assistance for the harvest, storage, processing and transportation of biomass materials for energy.

BCAP Funding

Unlike most programs in which Congress specifies the annual funding level, Congress funded BCAP at essentially an unlimited amount; the BCAP statute specifies simply that USDA will use whatever “sums as are necessary” to implement BCAP. This means that the BCAP funding is both mandatory and is not capped by Congress, reflecting the high value Congress placed on this program. In reality, the Office of Management and Budget, working with USDA, decides each year’s funding allotment based on projected program demand, administration priorities and other factors.

Timeline for Implementation

With new federal legislation, the USDA needs to write program rules, with input from the public as required by law. However, in the interim, the USDA can implement this program in 2009 under a “Notice of Funding Availability” (NOFA) while also preparing a rulemaking on a parallel track for 2010.

They’ve not indicated yet what their plans are for BCAP. The rulemaking process for new programs can take years, as we learned under “Section 9006″ of the 2002 Farm Bill (now REAP – the Rural Energy for America Program).

Eligibility

To participate in the biomass crop establishment portion of the program, a group of farmers or a “biomass conversion facility” (any facility that will use the biomass to make biobased products or energy (heat, power, or advanced biofuels) must submit an application to USDA that defines the borders of the proposed production area and identifies the variety of biomass crop to be used at the facility.  The application also must include a commitment from at least one biomass conversion facility in the area to use the biomass in their facility.

All biomass production must occur on either agricultural land or industrial private forest land.  BCAP excludes all land in federal land protection programs and native sod.  BCAP also excludes any crops otherwise eligible for Title 1 (Commodity) programs and noxious and invasive species.

USDA will determine whether projects meet the minimum threshold for selection, based on criteria in the statute and others to be determined by USDA (presumably through rulemaking.)  The statutory criteria include:

• The amount of crops to be produced and the likelihood that they will actually be used to produce energy
• The amount of biomass likely to be available from sources other than the crops grown with support from the BCAP
• The local economic impact of the project
• The opportunity for local investors to participate in the ownership of the facility
• The participation of beginning or socially disadvantaged farmers
• The environmental impacts of the proposal
• The variety of agronomic practices and species – including mixes of different crops – proposed within a BCAP area
• The range of crops across projects areas

If the project meets the established criteria, then it will be funded.

Energy Crop Production Incentives

Ag producers in project areas will receive a payment for up to 75% of establishment costs. Establishment costs refer to the costs to convert lands from an existing use to the new energy crop. Incentives also include an annual payment intended to compensate the producer for the opportunity cost associated with growing an energy crop on the land.  Land that was formerly in a row crop will likely receive more than land that was fallow or pasture.  The annual payments can continue for up to 5 years if the producer is growing a perennial grass and up to 15 years if the crop is trees.

Ag producers are required to implement a conservation plan on the enrolled land and to agree to provide information to USDA for research purposes.

Harvest, Transport, Processing and Storage Co-Pay

Any person collecting and selling biomass crops or agricultural or forest waste for energy is entitled to receive this payment. The payment is structured as a match; whatever the biomass collector (whether the farmer or some other person) is paid by the biomass user facility, USDA will match dollar for dollar, up to $45 per dry ton.  Materials not eligible for this payment include animal waste and byproducts, food and yard waste and algae.

ELPC will follow, and report on, the rulemaking process closely.

See also the story REAP clean energy with prairie grasses today.

Rather than wait for cellulosic ethanol, grass pellets are today fueling space heating, power generation and other high efficiency uses. This approach “primes the pump” for developing energy crop economies so that they will be more ready to deliver when cellulosic ethanol is market-ready.

Agrecol has gone beyond studying this technology to adopt it technology within their operations. They’ve planted their own acres of switchgrass and are using it for space heating.

REAP and Grass Pellets

Today, this technology is providing an economical option for consumers and producers who are also helping to build a clean energy economy. Federal grant and loan programs like REAP (Rural Energy for America) are driving this technology forward.

Agrecol claims bioheating systems that use pellets made from native grasses like switchgrass are more efficient and more economical than propane (LP gas), oil, electricity, and corn-based biomass (the cost per MMBtu for propane is $26.57 compared with $12.82 for switchgrass pellets). Native grasses, which can be grown and harvested with common farming technology, require few chemical inputs and less tillage but are perennial and can be grown on marginal lands.

The development of switchgrass as a source of heat energy also significantly reduces global warming pollution. Converting a single acre of corn to grass production would reduce 1.3 Megatons of global warming pollution annually on the cropping side. Using switchgrass pellets for energy also cuts global warming pollution considerably compared to the same energy from fossil fuels like heating oil and natural gas.

Examples of Projects

Pork & Plants, a greenhouse in southeastern Minnesota, was seeing sharp increases in natural gas prices for heating their greenhouses over a number of years.  With funding from REAP, the group was able to purchase a pellet boiler that produces 2000 MBTUs per year. While they currently are using corn in the boiler, they are now working on making their own pellets from native prairie grasses, corn stover, and other materials.

Missouri Bioenergy (a.k.a. “Flick Seed Company”) is also advancing grass pellets with the help of REAP. Learn more about their efforts in our Success Stories section.

The Rural Energy for America Program (REAP, formerly Section 9006), part of the recently passed Farm Bill’s Energy Title, has already funded pellet production projects and a number of pellet boiler installations. REAP could also become a prime resource for those who want to begin using energy crops for heating.

Following are some of the businesses that have invested in pellet production or boiling with help from REAP:

See also:

• Support for Energy Crops Taking Shape
• BCAP: New Farm Bill Program Can Advance Energy Crops