Energy Farming

Though the traditional forms of agriculture, crop and animal farming aren’t the only farm sectors anymore.

Feedstock farming – growing varying cellulosic, non-food material such as miscanthus and switchgrass, which is then fermented for conversion to biomass pellets and fuel – is emerging as a new industry market.

Biomass comprises several types of herbaceous grasses that are converted into fuel using special processing equipment. Pellets are a byproduct of the conversion and can be used as livestock feed and to generate electricity.

Farmers receive a price based upon each feedstock’s net-energy value and moisture content. According to FarmEnergy.org, 1 ton of pellets contains as much energy as 190 gallons of propane.

The Biomass Crop Assistance Program (BCAP), instituted in the 2008 Farm Bill, was designed to stimulate new crops for renewable energy feedstocks. It demonstrates the importance of this emerging ag market.

“Farmers are the foundation to drive [the new biomass energy] technology — not technology driving farmers,” said Steve Flick, president of Show Me Energy’s (the first U.S. producer-owned biomass cooperative) board of directors.

The Biomass Crop Assistance Program (BCAP), administered by the Farm Service Agency, provides financial assistance to owners and operators of agricultural and non-industrial private forest land who wish to establish, produce, and deliver biomass feedstocks. BCAP provides two categories of assistance:

• Matching payments may be available for the delivery of eligible material to qualified biomass conversion facilities by eligible material owners. Qualified biomass conversion facilities produce heat, power, biobased products, or advanced biofuels from biomass feedstocks.

• Establishment and annual payments may be available to certain producers who enter into contracts with the Commodity Credit Corporation (CCC) to produce eligible biomass crops on contract acres within BCAP project areas.

BCAP-qualified producers are eligible to receive up to 75 percent of the cost of establishing and planting biomass crops within a BCAP project area. The USDA provides annual payments to compensate for lost opportunity costs until these crops are established and provides financial assistance for the collection, harvest, storage and transportation of biomass crops by matching the amounts paid to producers by the biomass conversion facility, up to $45/dry ton.

Not only does feedstock farming impact the farmer, it significantly impacts the entire economics of the business supply chain. Biomass conversions creates hundreds of direct and ancillary jobs in rural economies.


“Hauling massive amounts of feedstock long distances has a tremendous effect on the economy,” said Steve Carter, director of Iowa State University’s Research Park in Ames.

Some farmers are participating in feedstock farming to power their own equipment. This may become an increasing trend as oil prices continue to escalate.

A farmer interviewed for a recent Herald-Review story, said that he’s found using 1 ton of biomass pellets to cost $165, compared to 149 gallons of propane for $387.40 and 101 gallons of fuel oil for $383.80.

In Ohio, Aloterra Energy develops biomass conversion facilities by handling both feedstock development and its conversion to fuel using advanced biofuel production. One biomass conversion facility is currently in operation in Conneaut, Ohio, and the company is in the process of expanding its network of farmers for energy-crop production.

As fuel and other energy costs continue to increase, so too will the interest in feedstock farming. It will be interesting to witness how farmers react to this emerging new-income opportunity.

Photo obtained from: farmenergy.org

Government funds biorefinery developments

To increase the production and use of renewable-energy sources, the United States Department of Agriculture (USDA) is soliciting federal grants for biorefinery projects.

One such project, the Biorefinery Assistance Program, provides guaranteed loans for the development and construction of commercial-scale biorefineries or for the retrofitting of existing facilities (including, but not limited to, wood-products facilities and sugar mills) for the development of advanced biofuels.

“Renewable-energy production is a key to sustainable economic development in rural America,” said U.S. Agriculture Sec. Tom Vilsack. “We must rapidly escalate production of biofuels to meet the 2022 Federal Renewable Fuels standard goal, and much of this biofuel will come from feedstocks produced by America’s farmers and ranchers. This will be an increasing source of income for rural America and it represents an opportunity to increase the number of green jobs available not only to farm families, but also to residents of rural communities.”

Vilsack specifically mentioned feedstocks – crops or products that can be used as or converted into biofuels and bioenergy. Common feedstocks include soybeans and rapeseed while alga and ethanol byproducts are emerging feedstocks.

Farmers of these and other sources of feedstock can benefit from biorefinery developments because of increased market opportunity. However, the advancement of this renewable energy comes with a price tag.

According to a blog at Biofuels Digest, “Because biofuels projects cost in the hundred of millions, the “family member” guarantor of choice in the U.S. is Uncle Sam – the one with the balance sheet and the policy interest to make commercial biofuels happen.”

But programs such as the Biorefinery Assistance Program expand the promise for biofuels in America.

Program Information:

• Eligible applicants: Individuals, tribal entities, state-government entities, local-government entities, corporations, farm cooperatives, farmer cooperative organizations, associations of agricultural producers, national laboratories, institutions of higher education, rural-electric cooperatives, public-power entities and other groupings of any of the previous entities

• Loan limits: Maximum of $250 million; no minimum requirement; maximum loan will be reduced by the amount of other direct federal funding the eligible borrower receives for the same project

Eligible projects:

• Projects must be located in a rural area (50,000 or less population)
• Projects must use “eligible technology,” which is defined as either:

1. A technology that is being adopted in available commercial-scale operation of a biorefinery that produces an advanced biofuel; or
2. A technology not described in the previous paragraph that has been demonstrated to have technical and economic potential for commercial application in a biorefinery that produces an advanced biofuel

In 2009, this initiative, and other provisions within the overarching program to stimulate energy development, funded 1,557 projects in 50 states, the territory of Puerto Rico and the Western Pacific Islands, expecting to reduce greenhouse gases by 1.5 million metric tons of carbon. These investments will generate a projected equivalent of 1.5 million kilowatts of electricity.

As America works to develop a clean-energy economy, the use of programs like the Biorefinery Assistance Program, is vital. This program, and others modeled like it, provide rural, green jobs and propel us toward energy independence. They also provide more economic incentive for American farmers to continue the production of feedstock crops.

*Photo obtained from www.clear.certh.gr/img/bio-refinery%201.jpg

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?










Biofuels: Finding an Answer to the Energy Problem

The search for alternative fuels and energy sources has moved from a unique scientific pursuit to an economic and global necessity in the last decade. Immersed in controversy due to the soaring costs of fuel, food and other living expenses, the biofuel and ethanol industries are scrambling to find new and better ways to power our homes, cars and tractors.

Currently, the most common and widely produced biofuel is corn-based ethanol. However, even supporters of the industry realize that it is not the final answer to our energy needs. Corn ethanol is helping us reduce dependence on oil, but most agree that the future lies in using cheaper non-food material.

There are dozens of solutions in the works, but one of the most promising sources of cellulosic ethanol is switchgrass, a perennial that can thrive on poor soil with little water, fertilizer or pesticides.

Jeffrey Bennetzen, a professor of molecular genetics at Franklin College studying biomass energy, said that the advantages of using a cellulosic approach are that switchgrass captures carbon dioxide very effectively. It also reduces runoff from fields and does not take valuable acreage away from food production.

Sunflower stalks, sugar cane and sweet sorghum are all being studied for their use in creating cleaner and more efficient bioenergy. Their ability to grow quickly in conditions where corn and soybeans cannot, allows these energy sources to yield 250 percent more ethanol per acre than corn.

Other creative sources of fuel are pond algae, certain fruits and animal food wastes.

“Any kind of relief or help we can get from a cheaper source of oil could impact the agriculture industry tremendously throughout the country, throughout the world,” said Florida citrus farmer Bryan Beer. During peak harvesting, his tractors consume 120 gallons of fuel a day.

Many of America’s best minds are working to create what many believe will be one of the keys to a truly renewable energy system in this country and around the globe. It is projected that the impact of these research developments won’t be seen for about five to 10 years, but we do know that whatever the solution, farmers will have major roles to play.

There are still many questions that need to be answered, and many seem to directly influence the American farmer. Do you believe that cellulosic fuel is the answer? Is moving away from corn and soy-based fuel – products that many in the industry are finally catching up with – a wise decision? Could you see yourself growing these new crops? Let me know your thoughts. Please comment below.