Farm Energy

The 2018 funding picture for farm energy development programs came into sharper focus after the appropriations committees of both houses of Congress passed fiscal year 2018 agricultural appropriations bills.  However, it’s not at all clear what happens from here.

The Senate bill cut or rescinded a total of $64 million from farm energy programs. Overall, the House bill cut farm energy funding far deeper than the Senate, and targeted REAP in particular. The House cut or rescinded a total of $213 million from farm energy programs. In some cases rescinding funds carried forward from previous years, as provided in the 2014 Farm Bill

Rural Energy for America Program (REAP): The Senate bill protects REAP from cuts in mandatory Farm Bill funding and even adds a small amount in discretionary funding. This comes as a relief given the Trump budget would cut all mandatory funding, plus rescind all carryover funds – which would have been the worst cuts in the history of the program. Historically, the Senate leads in protecting Farm energy programs, including REAP.

The House Agriculture Appropriations Subcommittee cut REAP from $50 million in mandatory funding to $9 million. Unfortunately, during the full Appropriations Committee consideration of the bill,  Subcommittee Chairman Aderholt sought to cut REAP even further, to a mere $1 (one) million, in a manager’s amendment. This cut would essentially kill the program. However, an error in the amendment the committee passed may spare REAP the second round of cuts. We will continue to monitor the House if this bill moves to the floor after the summer recess.

Biomass Crop Assistance Program (BCAP): Appropriations Committees in both chambers capped BCAP, from an original $25 million in mandatory funding to zero.

Biorefinery Assistance Program: Under the 2014 Farm Bill this program did not have any mandatory funding for FY 2018. The Farm Bill, however, provided for funds to carry over from previous years to support the program. There were $178 million in carryover funds in the program’s account. The House Appropriations Committee rescinded all but $31 million while the Senate committee left $139 million in the account.

The next steps in the appropriations process are not clear. Under the regular order of business the bills would go to the full House and Senate and then a Conference Committee would work out differences. At this point the House may be bundling packages of appropriations bills for consideration; the Senate process is moving more slowly. Some  observers expect that FY 18 appropriations will be covered by an omnibus bill (or bills) just as we had for FY 2017 and FY 2016 before that.

(December 15, 2104) The big news from our nation’s capital this past week has been the passage of the appropriations bill for fiscal year 2015, which began on October 1^st. The federal government had been operating on funding extensions and was facing a deadline that risked another government shutdown. At this writing the bill has been passed that will fund government operations through the remainder of FY2015 and the President is expected to sign it.

The bad news is that (more…)

Broad Support for Homegrown Clean Energy Shown in National Letter

WASHINGTON, D.C. – More than 100 diverse groups representing agriculture, energy, rural development and conservation called on Congress today to renew and fund core energy programs in the Farm Bill that push forward clean, homegrown energy. These programs advance energy efficiency, wind, solar, new energy crops, biomass energy and biobased products.

In a joint letter to the leaders of the House and Senate Agriculture Committees, signers noted, “These important and growing industries all benefit agriculture and forestry and are poised to make huge contributions to our economic, environmental and national security in the coming years, provided that we maintain stable policies that support clean energy.”

The energy programs are administered by the USDA and have made a number of accomplishments since the first Energy Title was created in the 2002 Farm Bill:

* The Rural Energy for America Program (REAP) has supported nearly 8,000 energy efficiency and renewable energy projects across the nation in varying agricultural sectors.

* The Biomass Crop Assistance Program has assisted farmers in developing homegrown energy crops that support farms and supply needed energy sources

* Biofuel advancements have accelerated through support from the Biorefinery Assistance Program.

“This letter arrives at the Agriculture Committees as rising gasoline prices remind America that our long-term energy challenges to our nation’s well-being require long-term commitment,” said Andy Olsen, ELPC Senior Policy Advocate. “Polls show the American people believe the Farm Bill should support clean energy and we know Congress can pass a Farm Bill that reflects the will of the American people.”

Download the letter.

(Feb 28, 2011) USDA recently issued interim final rules for two Energy Title programs in the 2008 Farm Bill: Repowering Assistance Payments to Eligible Biorefineries, and the Advanced Biofuel Payment Program.

USDA is accepting comments on the rules through April 12, 2011. However, by issuing the rules as “interim final rules” rather than “proposed rules,” the Department can implement the regulations now, and then adjust them as necessary after receiving comments.

Repowering Assistance for Eligible Biorefineries

This program implements Section 9004 of the 2008 Farm Bill, Repowering Assistance. Its purpose is to help to “green” ethanol plants with funding for existing facilities to convert their on-site power plants from fossil fuel to renewable biomass. The carbon savings can be significant, with larger plants reducing greenhouse gases by 100,000 tons or more annually. The 2008 Farm Bill committed $35 million in funding for Repowering Assistance.

ELPC commented extensively on USDA’s first proposal for Repowering Assistance, and we are pleased that the Department has agreed in whole or in part with most of our recommendations. For example, the rule largely drops the “rural restriction” requirement that plants had to be located in rural areas.

However, we remain concerned that the program does not sufficiently reward the greatest carbon reductions in funding proposals, so we will comment on the interim final rule as well.

The Interim final Rule is available here, and comments are due April 12, 2011. Please feel free to contact Andy Olsen at ELPC if you have any questions about the Repowering Assistance Program.

Advanced Biofuel Payment Program

This program implements Section 9005 of the 2008 Farm Bill, the Bioenergy Program for Advanced Biofuels. Its purpose is to encourage production of lower-carbon biodiesel and cellulosic ethanol. Corn starch ethanol is not eligible. It offers production payments for biofuels based on several factors, and we expect that most of this funding will be used for soy biodiesel in the first several years of the new Farm Bill, along with some funding for other oilseed crops. The 2008 Farm Bill included $300 million in mandatory funding for this program.

Key points in the Interim Final Rule include:

• Two-tier payments for both total annual production and yearly increases, with the incentive first prioritizing total production and then, by 2013, equally dividing the incentive payments between total and incremental production.
• Discouraging use of forest biomass in several ways, notably by limiting payments for fuels produced from forest biomass to only 5 percent of total annual funding.
• Encouraging carbon savings with a “BTU bonus” for biofuels that meet U.S. EPA renewable fuels standard (RFS) requirements.

 The Interim final Rule is available here, and comments are due April 12, 2011.

The Omnibus Appropriations Bill introduced to the US Senate late on December 14 would cut Farm Bill clean energy programs by over $120 million and would eliminate the Biomass Crop Assistance Program. See the following list of cuts:

• 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. (more…)