USDA Includes Renewable Energy Expansion in Farm Bill Proposal

Agriculture Secretary Mike Johanns outlines the Administration's renewable energy proposals.

Published on: Mar 22, 2007

Speaking at Purdue University, Agriculture Secretary Mike Johanns discussed the role of renewable energy in USDA's 2007 Farm Bill proposals Wednesday.

"We heard during our Farm Bill Forums real excitement about renewable energy and our proposals reflect that enthusiasm by providing $1.6 billion in new funding for renewable energy research, development, and production – targeted to cellulosic ethanol, which creates fuel from switchgrass, wood chips and other biomass," Johanns says. "The cellulosic research being conducted is very exciting and I'm confident we are on the right path to meet President Bush's goal to reduce gasoline consumption by 20 percent in ten years. Our proposals will help our nation to expand beyond corn ethanol toward cellulosic ethanol, which could be produced in virtually every state."

The $1.6 billion commitment includes funds to support $2.1 billion in guaranteed loans for cellulosic projects, $500 million for bio-energy and bio-based product research and $500 million for renewable energy systems and energy efficiency grants.

The USDA proposals include:

  • Reauthorize the Renewable Energy Systems and Energy Efficiency Improvements loan guarantee program. The Administration proposes a loan guarantee program funding level of $210 million, which would support $2.17 billion in guaranteed loans over 10 years. The loan cap for funding cellulosic ethanol projects would increase to $100 million per project, and these cellulosic projects would be exempt from the cap on loan guarantee fees. Further, the Administration recommends incorporating these programs into Rural Development's Business and Industry Loan and Loan Guarantee Program. Funding would be prioritized for the construction of biorefinery projects in the Business and Industry loan guarantee program.
  • Reauthorize the Renewable Energy Systems and Energy Efficiency Improvements grant program. The grant program would be funded at $500 million over 10 years. This program will continue to support smaller alternative energy and energy efficiency projects that directly help farmers, ranchers, and rural small businesses. The goals would be consistent with those contained in the Biorefinery Development Grants program, which include providing diversified markets for agricultural and forestry products, increasing the country's energy independence, and enhancing rural development opportunities.
  • Revise the Biomass Research and Development Act of 2000 to increase the annual competitive grant funding for biomass research, focusing on cellulosic ethanol, with $150 million in mandatory funding over 10 years.
  • Initiate a new Cellulosic Bioenergy Program, which would provide $100 million in direct support to producers of cellulosic ethanol.
  • Reauthorize the BioPreferred program, revise provisions to improve its effectiveness, and invest $18 million to expand and improve the program.