Biomass: Fueling Tomorrow

We all need it. Now, more than ever, we need more of it.

Fuel – It’s a double-edged sword. It operates society, yet its creation can be considered by some to be problematic to society.

To meet the demand for renewable fuels, a fuel source that is heralded for its eco-friendly bases and sustainability, the U.S. Department of Agriculture's (USDA) new Biomass Crop Assistance Program (BCAP) subsidizes farmers who produce non-food crops that can be used to create fuel.

BCAP is designed to advocate for the establishment of a sufficiently large base of new, non-food, non-feed biomass crops in anticipation of future demand for renewable energy consumption.

“Domestic production of renewable energy, including biofuels, is a national imperative,” said U.S. Agriculture Secretary Tom Vilsack. “That’s why USDA is working to assist in developing a biofuels industry in every corner of the nation.”

The Renewable Fuels Association states that the U.S. will use about 138 billion gallons of gasoline this year. The Renewable Fuels Standard mandates that the U.S. use 36 billion gallons of renewable fuel annually by 2022. To help achieve this standard, the use of biofuels, including corn-based ethanol and soybean-derived biodiesel, is imperative.

As part of the 2008 Farm Bill Program, BCAP has a two-pronged approach to support renewable fuel production that will reduce reliance on imported oil and boost rural economies:

1. Provides matching payments for the transportation of certain eligible materials that are sold to qualified biomass conversion facilities to assist both agricultural and forest landowners and operators

2. Provides assistance for the establishment and production of eligible renewable biomass crops within specified project areas

BCAP Quick Facts

• Payments up to 75 percent of the cost of establishing eligible perennial crops
• Payments up to 15 years for woody perennial crops
• Annual payments up to five years for growing annual or perennial herbaceous or non-woody crops
• Increased costs for refiners related to use of the new biomass crops will be paid up to $281.5 million that remains from the 2008 Farm Act
• Biomass or biofuel production plants must be certified with the Farm Service Agency for the farmers to claim the payments

Increased use of ethanol and biodiesel in the fuel supply is a step toward the progressive use of renewable fuels.

Recently, The Environmental Protection Agency approved increasing concentrations of ethanol blended with gasoline for U.S. vehicles made in 2007 and later to 15 percent from 10 percent. A decision about whether to extend that ruling to cars built from 2001 to 2006 will come next month after more testing, reports a Bloomberg story.

Additionally, Vilsack noted that Congress should help build the biofuel industry by “reinstating the Biodiesel Production Tax Credit and providing a fiscally responsible short-term extension of the Volumetric Ethanol Excise Tax Credit (VEETC),” as reported by the National Association of Convenience Stores (NACS).

A federal tax credit that provided blenders of biodiesel $1 for every gallon produced is expired, while a federal tax credit that provided blenders of ethanol 45 cents for every gallon produced (VEETC) expires Dec. 31, 2010.

BCAP facilitates biofuel’s potential to help America assert its energy security. I hope it continues to foster more positive strides regarding renewable-fuel use.

Photo obtained from: allfreelogo.com

Obama Encourages Crop-Based Fuel Production

Significant job-creation, environmental and energy-security benefits are associated with the domestic production of biodiesel and ethanol; benefits that President Barack Obama recognized in his State of the Union Address.

Biodiesel and ethanol are two types of biofuels that are liquid fuels derived from renewable resources such as plant or animal materials. The U.S. is mandated to produce 36 billion gallons of biofuels by 2022 as outlined in the 2007 energy bill, which is nearly double the 12 billion gallons it currently mandates.

“Providing incentives for energy efficiency and clean energy is the right thing to do for our future, because the nation that leads the clean-energy economy will be the nation that leads the global economy, and America must be that nation,” Obama said.

Biodiesel is a fuel blend made primarily with soybeans. Ethanol is a fuel blend made primarily with corn.

Both crop-based fuel sources are advantageous for the agriculture industry. Farmers who grow corn and soybeans can be privy to the success and failure of the biofuels market if portions of their harvest are sold to biorefineries. But they’re not the only ones who are positively impacted.

Consumers also profit from domestic biofuel production. Biofuels supplement the U.S. fuel supply, offsetting the cost of regular fuel prices. Domestic biofuel production creates jobs to spur economies nationwide. Biofuels are also better for the environment because they’re non-toxic and don’t deplete natural resources. Biofuel use improves domestic security by reducing our reliance on imported oil.

Biodiesel Stats

• Biodiesel production in the U.S. provided more than 23,000 jobs nationally and more than $4 billion to the nation’s GDP in 2009.
• Without biodiesel, gas prices would increase $.20 to $.35 per gallon, according to the U.S. Department of Energy, which saved the average U.S. household $150 to $300 in 2008.
• Biodiesel is extremely energy efficient; for every one unit of energy required to produce it, it returns 5.2 units of energy.

Ethanol Stats

• In 2009, the U.S. ethanol industry supported nearly half-a-million jobs.
• Research shows a 35-to-46 percent reduction in greenhouse-gas emissions and a 50-to-60 percent reduction in fossil-energy consumption because of the use of ethanol as a component in motor fuel.
• Most of the standard gasoline sold in the U.S. uses a 10-percent blend of ethanol.
• The production and use of 10.6 billion gallons of ethanol in 2009 displaced the need for more than 321.4 million barrels of oil and saved American consumers and taxpayers more than $32 billion.

Obama noted the urgency and importance of biofuel production to our country’s energy independence:

“But to create more of these clean energy jobs, we need more production, more efficiency, more incentives. That means building a new generation of safe, clean nuclear-power plants in this country. It means making tough decisions about opening new offshore areas for oil and gas development. It means continued investment in advanced biofuels and clean-coal technologies,” Obama said.

The Biofuels Interagency Working Group, created by Obama’s administration in May, is devoted to implementing the policies necessary to progress the country’s outlined energy initiatives.

As part of his clean-energy agenda to advance job creation and reduce dependence on foreign oil, Obama recently met with 11 governors to discuss a “non-ideological approach” to energy and efficiency.

As climate change continues to develop into a deeper political issue, it will be interesting to witness how the country responds to Obama’s incentives, and how American agriculture will step up to the plate.










Challenges for biodiesel industry impacting national economy and environment

An extension of a $1-per-gallon biodiesel tax credit originally enacted in 2004 is being urged in Congress. The tax credit, which expired Dec. 31, 2009, encouraged businesses and consumers to use biodiesel to reduce the nation’s dependence on foreign oil.

MarketWatch reporter Steve Gelsi echoes, “Despite Washington's promotion of ‘green’ jobs, the biodiesel industry could instead deliver green-collar layoffs if the program isn't revived.”

Biodiesel is a domestic, renewable fuel made primarily from soybeans that is biodegradable and cleaner burning than petroleum diesel fuel. It aids in job creation, offers energy security and promotes a healthier environment. For these reasons, a retroactive extension of the biodiesel tax credit, directly reflected in the price of fuel at the pump, is being sought in Congress.

Last year, the U.S. biodiesel industry displaced more than 26 million barrels of foreign oil, supported nearly 23,000 jobs in all sectors of the economy, added more than $4 billion to the nation’s GDP and generated $866.2 million in tax revenue for federal, state and local governments.

“The U.S. has nurtured its biofuels industry to this point, and it would be a shame to see it slide back because the federal government failed to renew critical tax breaks for producers,” said a columnist in Kansas’ Hutchinson News.

Without domestic biodiesel production to offset the country’s energy costs, gas prices would increase between 20 cents and 35 cents per gallon, according to the U.S. Department of Energy. If the tax-credit extension is not passed, the average U.S. household will not experience the $150 to $300 savings it did in 2008.

In a letter to House Democratic Leadership Jan. 8, Iowa Reps. Leonard Boswell, Dave Loebsack and Bruce Braley urged for quick passage of the biodiesel tax-credit extension when the House returns for session.

Failure to extend the credit means that biodiesel will now be significantly more expensive in the marketplace than petroleum diesel fuel. As a result, the production and use of biodiesel throughout the nation has been severely curtailed and layoffs for workers in businesses supported by domestic biodiesel production are imminent, directly affecting the prosperity of biodiesel plants, biodiesel distributors and biodiesel retail fuel stations.

"Pretty much every biodiesel-production plant is idle," said Michael Frohlich, director of communications for the National Biodiesel Board (NBB).

The domestic production and use of biodiesel provides critical economic, security and environmental benefits that cannot be ignored.

Do you use or do you know anyone that uses biodiesel? Do you think consumers are aware of the effects domestic biodiesel production has on this country? Should greater emphasis be given to this issue by the Obama administration?